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Commons Chamber

Volume 891: debated on Monday 28 April 1975

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House Of Commons

Monday 28th April 1975

The House met at half-past Two o'clock

Prayers

[Mr. SPEAKER in the Chair]

Oral Answers To Questions

Prices And Consumer Protection

Price Code

1.

asked the Secretary of State for Prices and Consumer Protection when she next intends to review the Price Code.

I have no plans for a general review of the stage 4 Price Code. I am consulting appropriate representative organisations on the proposals announced in the Budget Statement for amendments to two paragraphs of the code.

In the light of the proposed improvements in the investment relief, and given the increase in the rate of inflation, surely this is merely running hard to stay in the same place and will make little practical difference. Given the time needed for investment decisions and given that the power of the legislation expires next spring, surely this will not influence anyone to take any new decisions about investment, although it will be of help to people who have already made those decisions. Surely the right hon. Lady must give some indication of the Government's intention next spring.

The hon. Gentleman must appreciate that it would be rather foolish for me to say a year ahead what the Government's intention can be next spring, because none of us can be sufficiently clear about the circumstances that can arise. Because investment relief is stated in percentage terms and in terms of categories, it is true that inflation is not affected, and this will bring fresh relief of the kind we want to those who are genuinely engaging in investment, growth and jobs.

Would not the right hon. Lady agree that the Chancellor's measures added 2.75 per cent. to the price index and that as the CBI estimates that the total removal of price restraints under the code would add another 1 to½per cent. it will not be worth while?

I am not at all sure that I accept the CBI's estimate. It should be pointed out that the CBI's estimate of the effect if the Price Code restraints were removed would apply to the prices of all sorts of goods, essential and less essential, whereas the Chancellor's measures applied above all to the less essential goods.

14.

asked the Secretary of State for Prices and Consumer Protection what recent consultations she has had with the food industry with regard to the operation of the Price Code.

15.

asked the Secretary of State for Prices and Consumer Protection what progress has been made in the consultations between the Department and the food industry with regard to amendment of the Price Code.

Following the statement on the Budget made by my right hon. Friend the Chancellor of the Exchequer on 16th April, I have circulated to interested parties a consultative document, which is available in the Vote Office, setting out the changes I propose to make to the Price Code. Among other changes, I propose to extend investment relief to commercial vehicles. This measure will, I believe, be of particular benefit to the food manufacturers as well as to distributors. My proposals take account of recent discussions between my Department and representatives of the food manufacturing industry.

Is the right hon. Lady aware that the Budget did nothing of any significance or relevance and that this absurd bureaucracy is strangling the profitability of the industry? Why not take some direct measures to ease the code in its operation? Why is the Department being so rigid over the discounts which bakers are prepared to offer to wholesalers—I put a case to the right hon. Lady recently—so that a supermarket chain can reduce the price of a loaf by 2p or 3p?

The hon. Member is on very weak ground. In the first place, the Government introduced a specific tied investment relief because we were concerned about growth. If the hon. Gentleman's own administration had done this earlier, we might have had more growth this year. [Interruption.] All I can say is that the industry itself very much welcomed this, and it will not do for hon. Members opposite to fool about in a situation in which the industry itself has pressed for investment relief of this kind.

With regard to the point about the use of the Price Code and bureaucracy, in my view it would be irresponsible in a situation of rapid inflation not to recogise that sacrifices have to be made by all sections of the community, including industry.

While accepting that any relief, be it in investment on vehicles or in any other way, is acceptable in relation to the profitability of food manufacturing companies, may I ask why it is that in the last week we have seen a report from the Spillers Group indicating a loss of £7 million on the baking side of which it attributes £6 million to the restraint of the Price Code?

There is a very difficult technical position in respect of the baking industry. The hon. Gentleman at least will recognise that it would have been irresponsible of me as Secretary of State for Prices and Consumer Protection to allow the subsidy to be used to widen discounts so that there would be no effective control over public expenditure. Of course, it is the case that we have introduced controls over discounts for the purpose of protecting the taxpayer.

Will the right hon. Lady recognise that, given that the reliefs which she has given are welcome, they have only marginally affected the food industry, which still has special problems? Does she not accept that it is in the interests neither of consumers nor of the people employed in the industry for such companies to go bankrupt? With regard to the meeting she had in her Department and the information she has given that the Department would have new criteria in relation to the interpretation of those provisions of the Price Code that the food manufacturers were complaining about, her Department cannot do such a thing. Such an interpretation must be judicially recognisable. Will she issue orders?

We are very happy to discuss at any stage with the food industry any ways in which we can assist in making orders as clear as possible. I accept what the hon. Lady says. It is fair to say from the point of view of the general public that there has been a fairly dramatic fall in the margins of retail food and drink prices from 2·8 per cent. in the third quarter of 1973 to 1·9 per cent. in the third quarter of 1974. It is worth pointing out to the public that there is no profiteering in the retail margins of food at the present time.

European Community

3.

asked the Secretary of State for Prices and Consumer Protection if she will list the ways in which British consumers will continue to be protected from price rises whilst the United Kingdom remains a member of the European Community.

The Under-Secretary of State for Prices and Consumer Protection
(Mr. Robert Maclennan)

As members of the European Economic Community we are free to act on prices as we think best and my right hon. Friend will continue to implement the Counter-Inflation and Prices Acts in the interests of the British consumer.

While I thank the Minister for that statement, I wonder whether he can give the House an idea of what little effect our membership of the European Community has had directly on prices generally in this country.

It is true that at present the effect is broadly neutral. It should be emphasised that British consumers are major beneficiaries of the tariff cuts which have already been made between the United Kingdom and our Community partners in respect of nonfood items—for example clothing, on which tariffs have come down from 20 per cent. to 8 per cent.; furniture, from 10 per cent. to 4 per cent.; carpets, from 25 per cent. to 10 per cent., and radios, from 15 per cent. to 6 per cent. Taking food and other goods together, broadly the effect of our membership of the Community on the level of prices has been to restrain it. The effect has not been very great, but every help in dealing with inflation is good to have.

I think my hon. Friend will accept that I doubt almost all he has just said. Would he not agree that far from our having power to deal with our own prices, especially of food, we are compelled to put an import levy on them if they fall below Common Market prices? Therefore, we are on a compulsory ladder in which every rung is pushing up our prices whether we wish them to go up or not.

I hope that my hon. Friend is not doubting the accuracy of the tariff cuts to which I have referred. As a former Agriculture Minister he will know that we had levies and import quotas under our agricultural system even before entry into the Community and that the Community export levies have positively held down the price of cereals during the past year and have enabled us to keep the price of bread lower than it might otherwise have been.

Is not the whole system based upon keeping prices of food up in the Common Market? Would it not be more sensible if the money that we have to pay to the Community for keeping prices up could be spent on keeping food prices down in this country?

No, the hon. Gentleman is quite wrong. The objective is to keep prices stable.

The hon. Gentleman will know, for example, that by a direct Community subsidy worth £40 million in recent months we have been able to keep down the price of sugar to the British consumer.

4.

asked the Secretary of State for Prices and Consumer Protection what she estimates will be the effect on the average family's weekly food bill of Great Britain leaving the EEC.

6.

asked the Secretary of State for Prices and Consumer Protection what effect she estimates withdrawal from the EEC would have on the housewife's weekly budget.

Membership of the Community is at present having no significant effect on food prices overall.

Does the right hon. Lady share my concern that the price of food as measured by The Guardian shopping basket went up by 5 per cent. in March alone? Bearing in mind that the official Labour Party propaganda machine will be using that fact, what opportunities will she have in the coming weeks to point out that only a small part of that rise was due to our membership of the EEC?

One of the main effects on the increase in the food index arose from the decision taken in our own Annual Farm Price Review with respect to the price to be paid to dairy farmers in the light of their soaring costs. One must therefore make clear the reasons for this increase in the index, which had virtually nothing to do with the EEC, although I must repeat that there was some effect on butter and cheese prices in consequence of the April transitional step.

Is it not the case that the EEC has decided to apply value added tax to food prices next year? In view of the policy of harmonising these taxes as a result of our membership, will that not also mean that VAT will be applied to food prices in the United Kingdom?

No, there is no question of this country having to accept VAT on food or on children's clothing unless we decided as a national Government to do so.

Would the right hon. Lady agree that the ultimate harmonisation of food prices within the EEC could mean ultimately that food costs could take as much as one-half or two-thirds of the average weekly family income in the United Kingdom?

If so, it would be different from the experience of all other countries in the Common Market, some of which have been members for almost 16 years and in none of which is anything like that proportion of income spent on food. Such a situation would require a number of circumstances which seem to me to be extremely improbable.

Would the right hon. Lady be concerned about the future supplies of food if we were to withdraw from the EEC?

None of us, whatever our views on the EEC, can make any final statement about supplies outside the Community. What we can say is that the degree of self-sufficiency in temperate products in the Community offers some stability which we cannot be equally sure would be paralleled in the outside world. The recent experience over sugar and even more the experience of New Zealand, which was unable to meet its own quotas of butter and cheese permitted in 1974, suggest that there is some uncertainty about supplies in the world outside.

My right hon. Friend said that the present net effect of our membership of the EEC on food prices was zero. Can she say how much the net effect has varied since we became a member?

First, I should not like my hon. Friend to assume that the effect has been zero. I cannot say that it has been. I can say that there is no significant effect, the problem being quite simply that no one can precisely ascribe the sugar subsidy, amounting to over £40 million, to any particular person's purchases of sugar. If people buy EEC or world sugar, that sugar is subsidised to the extent of 20p on a 2-lb. bag. If they buy Caribbean sugar under the CSA, it is not subsidised to the same extent. I hope the House appreciates that we are trying to give the clearest picture we can and that there is some difficulty about presenting precise figures. Broadly speaking, there is no significant effect; if we include sugar, there is a mildly favourable effect; if we exclude it, there is a mildly unfavourable effect.

Secondly, in 1974 as a year there is no doubt that there was a favourable net effect in terms of food prices. My hon. Friend will appreciate that we are having to give from week to week the most up-to-date figure we can.

Food Subsidies

5.

asked the Secretary of State for Prices and Consumer Protection what is her latest estimate of the total cost of food subsidies for the financial year ending 5th April 1976.

Is it the case that more than half of that £550 million will go in the current year to families with an income of more than £50 a week? Secondly, does the right hon. Lady agree with the Chancellor's policy of reducing food subsidies by £150 million next year? If she does, why can the reduction be right next year but not right this year?

On the second part of that question, the hon. Gentleman will recall that as long ago as the Prices Act 1974 I made it clear that the food subsidy was a response to the high level of raw material food costs which we were facing at the time. For evidence of that statement, I refer the hon. Member to Hansard, 10th February 1975, col. 24–25. As for his perpetual view that the subsidies largely benefit the better off, recent research has indicated, taking into account the expenditure on food as a proportion of household budgets and the expenditure on subsidised foods within the amounts spent on food overall, that the broad benefit to families with under £20 a week income is nearly four times as great proportionately as to families with incomes of £80 or over.

Would my right hon. Friend agree that, as we have moved forward from the cheap food policy that we have had under successive Governments since the end of the war to the dear food policy that we might have to pursue as a member of the EEC, food subsidies have kept prices down, that housewives in Britain can buy German butter far cheaper than it can be bought in Germany and that a housewife in Northern Ireland can buy Kerrygold butter cheaper than it can be bought in Southern Ireland? Have not food subsidies helped a great deal, transitionally at any rate, to keep down prices?

I welcome my hon. Friend's support for the food subsidy policy. I hope he will take heart from the fact that, judging from the most recent statement by the Commissioner for Agriculture, M. Lardinois, it appears that we are beginning to persuade the Community of the benefits of a food subsidy policy. Perhaps the Opposition will notice that already it seems that, if we remain in the Community, it will adopt the system of food subsidies, as I hope it will.

Despite the fact that she seems to be taking heart, is the Secretary of State aware that the difference in the increase in food prices under the Conservative administration and under the present Government is startling, even allowing for transport costs and the other factors that she quoted? During the last three months under this Government food prices have risen by 10 per cent. In our last three months they rose by 5 per cent. This is a basis of comparison which both the Secretary of State and the Minister of State are fond of using. Taking the comparison on a six-monthly basis, under this Government food prices have risen by 17 per cent. compared with 11 per cent. under the previous Conservative Government. Is it not therefore nonsense to claim any noticeable significance for food subsidies?

It all depends what months one chooses. I was not going to pursue this question, but if I were asked to do so I would point out that, on the basis of a three-months average, the highest increase in food prices that we have ever had was in the period immediately at the time that the last administration left office.

On a point or order. I beg to give notice that, in view of the right hon. Lady's unsatisfactory reply, I shall seek to raise the matter as soon as possible on the Adjournment.

Unit Pricing

7.

asked the Secretary of State for Prices and Consumer Protection what action she is taking to encourage a wider use of unit pricing in shops and supermarkets.

18.

asked the Secretary of State for Prices and Consumer Protection what progress has been made towards the introducing of mandatory unit pricing.

Following the favourable reception to our initial price marking orders we are pressing on with our plans for extending mandatory unit pricing to other fresh and frozen foods. In particular we are holding discussions with the interests concerned on meat, poultry, fish, fruit and vegetables to consider the most suitable methods of so doing. My right hon. Friend hopes to be able to make a further batch of orders before the Summer Recess.

I am grateful to hear of the progress that is being made. Would not my hon. Friend agree that the bewildering array of prices, sizes and brands on supermarket shelves makes it virtually impossible for the housewife to exercise intelligent value-for-money choice unless she carries a slide rule or a pocket calculator? Does not my hon. Friend agree that the introduction of unit pricing is the best way of enabling the housewife to make intelligent choices? Will he therefore press on firmly with this policy?

I am grateful to my hon. Friend for his support. We attach considerable importance to making as rapid progress as possible in this rather difficult area. There are very complicated problems which my hon. Friend will understand, particularly in respect of unit pricing of meat. There are other areas in which we hope to be able to provide better information—for example, by prescribed quantities.

Does not the hon. Gentleman agree that two of the problems involved here are, first, indecision about whether we are part of the Community —a definite decision on this point would help manufacturers to unit-price packages which are constant—and, secondly, the position with regard to metrication?

To be fair, we must proceed with unit pricing whether or not we decide to remain within the Common Market. We are bearing the metrication issue very much in mind.

Hearing Aids

8.

asked the Secretary of State for Prices and Consumer Protection how many representations she has received on the sale by commercial firms of hearing aids.

The Minister of State, Department of Prices and Consumer Protection
(Mr. Alan Williams)

Three.

Is the Minister aware that there appear to be some firms in Britain engaging in high-pressure sales techniques for hearing aids and directed principally at elderly people? Does he not think that, just as spectacles must be prescribed by an optician and dentures by a dentist, there is a strong argument for moving towards a situation in which those with some professional qualification are involved in the business of supplying hearing aids?

Indeed, I agree. I advise the hon. Gentleman to look at the work of the Hearing Aid Council and the code of practice which has been produced. We have received only three specific examples in the Department. If the hon. Gentleman has any which have been broueht to his attention, I shall be glad to ask the Hearing Aid Council Investigating Committee to look at them.

Fuel (Pricing)

9.

asked the Secretary of State for Prices and Consumer Protection whether she is satisfied with the powers of her Department in controlling the pricing of fuel.

Yes. The Price Code applies to the production and sale of fuel in both the public and the private sectors. While we have no direct powers to control the price of fuel, the Government have asked the gas and electricity industry to restructure tariffs in favour of the smaller consumer and phase in increases with social security and pension upratings.

Is my hon. Friend able to do anything concerning complaints from consumers about coal merchants raising their prices by an unjustifiable amount? Does he not consider that it is rather unfair on consumers, particularly those with low incomes, that they have to bear the brunt of the withdrawal of subsidies from the nationalised industries and at the same time must suffer further increases imposed by coal merchants which appear to be out of proportion to the merchants' real increase in costs?

Yes, we share my hon. Friend's concern. We appreciate that all too often it is the poorest consumer who is the coal consumer. It is for that reason that only recently my right hon. Friend announced that the distributors' margins on coal are to be examined in one of the processes of special review undertaken by the Price Commission.

What part does my hon. Friend or his assistants and servants play in the committee which the Chancellor of the Exchequer told us just before the Easter Recess was to be set up to look after the interests of the poor in the matter of inflation? What representations did the Department make about the division in the electricity increases between the increase in the industrial tariff, which was very small, and the increase in the domestic tariff, which was very large?

We are represented on that committee and our aim has always been to protect the consumer as far as we can.

Petrol (Retail Margins)

10.

asked the Secretary of State for Prices and Consumer Protection whether she will make a statement about her future intentions for legislation, following publication of the Price Commission's report on petrol retail margins.

I have not yet received the Price Commission's final report. The interim report published in March did not suggest grounds for legislation.

Does my right hon. Friend recollect that at the time of the November Budget garages and oil companies were saying that they had to have an increase on top of the VAT increase for their very survival? Has she noticed that we now have garages offering up to 6p a gallon discount and even sixfold stamps in some places?

Is my right hon. Friend aware that I am told by garages that they have been pressurised by oil companies to give these discounts? As they were very loud in asking for the last increase and as they can now afford to give large discounts, should not the Price Commission be asked to re-examine this whole question?

The Price Commission's interim report suggests that one of the reasons for price cutting and for the offer of stamps many times over —I take note of what my hon. Friend the Member for Newcastle-upon-Tyne, East (Mr. Thomas) said—is mainly that a price war is going on in garages against a situation of falling demand. However, I add that in so far as this price cutting may be due to pressure from oil companies on solus tied garages this is a matter that I have asked the Director General of Fair 'Trading to look at again in connection with the report of the Monopolies Commission which concerned itself with solus trading.

Will the Secretary of State give an assurance that the Government will adopt no policies the object of which is to keep petroleum prices up?

The right hon Gentleman can accept our assurance on that. He will know that one of the reasons why my right hon. Friend withdrew the maximum prices order at the end of last year was that in the face of rising supplies there were indications that prices would fall rather than rise.

Food Prices

11.

asked the Secretary of State for Prices and Consumer Protection what has been the change in the last three months in the price of imported foodstuffs; and what has been the change in the same period in the retail price of food in British shops.

Between December 1974 and March 1975 the unit value of imported food and feeding stuffs rose by 7 per cent. Over the same period the retail food index rose by 10·1 per cent.

Do not those figures show that the myth that inflation of food prices is caused either by overseas suppliers or by the Common Market can now be totally discarded and that indeed our inflation is entirely caused by the Government's own domestic economic policies and nobody else is to blame?

I am glad that the hon. Gentleman has recognised the minimal effect of the Common Market upon the direction of prices in this country. If what he is referring to is his traditional preoccupation with the money supply as a contributory factor to inflation, I would simply point out that on either definition the money supply is growing more slowly than the national income in money terms.

Is the hon. Gentleman satisfied with the sources of his statistics on retail prices? Is he aware that in my constituency of Romford a weekly shopping survey based on the local branch of the London Co-op and published in a local newspaper has shown that in the last three months a sample basket of 33 standard items has increased in price at an annual rate in excess of 50 per cent.?

I recognise that there are some variations, and it is partly with this in mind that my right hon. Friend has recently made a special reference to the Price Commission. Our own calculations are based upon figures provided by the Department of Employment which, I think, are highly reliable and are a better guide than selective localised information.

Has my hon. Friend seen the comments by Robin Pooley, the Vice-President of the EEC Beef Consultative Committee, that the cost of keeping the beef mountain is likely to be the

"biggest financial scandal of the century"?
If we want to try to keep down import prices, why cannot we do something about the ½million tons of beef which are now stored in the Common Market and are deteriorating rapidly?

My hon. Friend will know that one of the major successes by my right hon. Friend the Minister of Agriculture, Fisheries and Food in the renegotiations was in respect of the departure from the old system of intervention support to the new variable premium system. This is a most important return to the deficiency payment system which this country has operated effectively and which should preclude the likelihood of similar beef mountains being accumulated in the future. It is important to stress that the stocktaking of the common agricultural policy emphasises the Commission's view that these stockpiles in the future must be disposed of by means of selling in the Community and. if necessary, at subsidised prices for the benefit of consumers.

Consumer Affairs (Publicity)

12.

asked the Secretary of State for Prices and Consumer Protection what information she provides in respect of the broadcasting of consumer matters.

My Department provides the fullest information to the broadcasting organisations and the programme companies as it does to all other communications media, and we arc grateful for the constructive use they make of it. We arc always glad to discuss with them any ideas for improvement.

Can the Minister say how he considers that our consumer programmes compare with the consumer programmes of the European Community and whether he thinks there is any help that his Department can give to increase the standard of our programmes to the standard of the best within the Community?

My impression is that the consumer programmes in this country are superior to those elsewhere, and we have sought to bring to the attention of the Commission recently the good work done in this country on this matter. The Consumer Information programme of the Community, however, has recently been approved by the Council of Ministers, and the Community is moving rapidly in the matter.

Will my hon. Friend look at the excellent consumer services provided by the London borough of Lambeth which makes it unnecessary for housewives to stay at home listening to the radio? All they have to do is to go to the appropriate department of the town hall where they can get all the information they want about everything.

I very much welcome the local initiative of the London borough of Lambeth and, indeed, of a number of local authorities. We fully recognise that the most helpful information is that provided locally, close to where people actually shop.

Trade Descriptions Act

13.

asked the Secretary of State for Prices and Consumer Protection when she expects the review of the Trade Descriptions Act to be completed.

The interdepartmental committee which is reviewing the working of the Trade Descriptions Act 1968, under the chairmanship of the Director General of Fair Trading, will shortly publish a consultative document. The committee's report, which will take account of the comments received from a wide range of industry, trade and consumer bodies, is expected by the end of this year.

Does the Minister agree that at a time of rapidly rising prices there is potentially more confusion in special offers? Does he further accept that one of the greatest sources of confusion is the combination of coupons with special prices? Can he assure the House that this aspect will be given special attention and, one hopes, early recommendations?

Yes, I fully understand the difficulties to which the hon. Gentleman refers. Indeed, probing the work of price comparison, which is what the hon. Gentleman is concerned with, will be more effectively dealt with under Part II of the Fair Trading Act than under a revision of the Trade Descriptions Act. It could certainly be dealt with more quickly. I believe that the Director General will be coming forward with a consultative document in this sector in the near future.

In view of the outrageous claims made by the various Common Market organisations, such as the claim that the EEC keeps down food prices, would it not be a good idea to refer the EEC for investigation under the Trade Descriptions Act?

I am hardly answerable for all the claims made by either side, but I detect occasionally certain touches of extravagance, particularly from those opposed to the Market.

Retail Price Index

16.

asked the Secretary of State for Prices and Consumer Protection what is the current rate of price increases based on the last three months of the retail price index expressed at an annual rate.

17.

asked the Secretary of State for Prices and Consumer Protection what has been the increase in the retail price index during the past 12 months.

20.

asked the Secretary of State for Prices and Consumer Protection, what is the current rate of inflation, based upon a grossing-up to an annual rate of the last three months increase in the Retail Price Index.

The increases in the retail price index over the 12 months to March 1975 was 21·2 per cent. The change over the three months to March 1975, expressed at an annual rate, was 25·6 per cent.

Does the right hon. Lady agree that those figures indicate that the only effect of the elaborate mechanism of price control is temporarily to suppress the symptoms of inflation? Does she not now openly agree with what her colleague the Chancellor of the Exchequer said in many passages of his Budget Statement that the only long-term and effective way of controlling inflation is by controlling the supply of money?

No, I do not agree with that. What we can say clearly is that the annual rate of increase, where there are neither food subsidies nor a Price Code, would be about four or five points higher. It would not be responsible to allow that situation to arise. The hon. Gentleman would make a mistake if he were to put too much reliance on a three months' figure. As I said earlier to the hon. Lady the Member for Gloucester (Mrs. Oppenheim), in the three months to April 1974 which were indexed in that period part of which came during the administration of the hon. Lady's party and part during ours, the annual rate on a three-month basis was 26·7 per cent. while in the summer it fell to 8.4 per cent. It is a great mistake to base too many assumptions on those three months' figures.

Does my right hon. Friend agree that even on the figures put forward by Opposition Members the end of the Price Code would mean an acceleration of the inflation rate? Does she further agree that it ill behoves hon. Members opposite, who belong to a party which has no economic policy to speak of, to abuse the efforts of the present Government who are trying to combat inflation?

Yes, I accept that. It is true. We are taking steps to modify inflation so far as we can. It would be fair to add that the reasons for British inflation lie very deep in other spheres as well as in the increase in raw material prices, which have markedly slowed down. One cause is an increase in incomes. Ours is a low wage economy basically, and one reason for this is the failure over many years to invest adequately.

Why is our rate of inflation so much higher than that among our European partners—indeed four times that of Germany? Could it be that our European partners have competent Ministers prepared to exercise firm policies against inflation whereas the right hon. Lady's Cabinet colleagues have surrendered responsibility, decision-taking and sovereignty to the TUC?

That is a good political remark from the hon. Gentleman but it is a long way from the truth. One element of the truth was expressed in Sir Don Ryder's report about British Leyland, when he pointed out that car workers in British Leyland were using machinery far older than that behind any of their competitive workers in the countries of Europe. That also has a great deal to do with the current situation.

As we have now crossed the hyper-inflation threshold under the present Government, and as our rate of inflation is nothing short of a national disaster, if the right hon. Lady does not approve of the taking of three-month inflation rates, as she says, why did she and her right hon. Friend the Chancellor of the Exchequer at the time of the last election take a three-month inflation rate of 8·4 per cent—it now being nearly 300 per cent. higher? As a consequence, will the right hon. Lady rename her department the Department of Higher Prices and Consumer Deception?

The hon. Lady will recall, if she can remember that far back, that I based my remarks at the time of the election on the statement of the Price Commission, that statement being that in the summer the rate of inflation was running at approximately 12 per cent. I quoted that in my statement at Transport House, and it was absolutely accurate.

No responsible person on either side of the House, faced with the sort of inflation which we now have, should be unaware that this situation is to some extent within our control. I have already said that incomes, on the one side, and a failure to invest, on the other side, have a great deal to do with it, regardless of the Government's colour.

Will not falling bonus and overtime earnings and the rising level of unemployment mean that consumers' expenditure is likely to fall well behind the rate of increase in real earnings? Will my right hon. Friend therefore make sure that every pressure is maintained to keep down the cost of living so that there is not an undue deflationary effect?

What my hon. Friend says is well taken, but he will appreciate that it is important that the cost of living and the level of earnings should be kept broadly in line with one another in the situation which we as a country face, given our balance of payments difficulties. I assure my hon. Friend that it will be very much in our interests as a country to see the cost of living fall, and I have some reason to believe that that will happen towards the end of the year, assuming no increase in the rate of income supplements.

Price Commission Index

19.

asked the Secretary of State for Prices and Consumer Protection what has been the increase in the Price Commission Index since November 1974.

The index for the period since November 1974 will not be available until the Price Commission's report covering 1st December 1974 to 28th February 1975 is published tomorrow.

As the Price Commission's last report confirmed that one man's pay rise is another man's price rise, and as wage rises over the past 12 months have averaged more than 30 per cent., how could the hon. Gentleman's right hon. Friend claim only six months ago, at the time of the election, that there was no evidence whatever of price increases stored up in the pipeline?

I think that the hon. Gentleman's supplementary question relates to a report not yet forthcoming. Therefore, it does not arise.

Director General Of Fair Trading

21.

asked the Secretary of State for Prices and Consumer Protection if she will seek powers to alter the responsibilities of the Director General of Fair Trading in relation to his availability to the public.

No, Sir; but if the hon. Member has any particular problems in mind I shall be glad to consider them.

As it is important that the public should know that the Director General of Fair Trading has been appointed as the consumer's ombudsman, will the Minister ask him and his Office of Fair Trading to start a publicity campaign to encourage the public to approach him and his office direct if they feel that they have cause to complain in the matter of fair trading?

With respect, I think that that would be unhelpful, and I believe that the hon. Gentleman's own Front Bench would agree with the thinking here. Both Front Benches took the same view throughout the whole process of the fair trading legislation: that the räle of the Director General was to be at the top of a pyramid of a consumer advice service feeding processed information to the Government so that we could devise legislation. In other words, his is essentially a policy räle. Consumer protection for the individual should start at local level, and if we encouraged the public to do as the hon. Gentleman requests we should so flood the Director General with detailed cases that he would be unable to get on with his policy work.

Garages (Code Of Practice)

22.

asked the Secretary of State for Prices and Consumer Protection what representations she made to the Office of Fair Trading regarding the discussions it is having with garages on a code of practice, following publication of evidence relating to malpractices in the trade.

I asked the Director General in August 1074 to take account, in his discussions with the motor industry on a code of practice, of the Automobile Association's findings that a high proportion of new cars are handed over to purchasers by motor dealers without adequate pre-delivery inspection.

I thank my hon. Friend for that reply. Did he see the report over the weekend that motorists are now spending more on their cars than the average owner-occupier spends in buying a house? In view of the increase in petrol and other motoring costs, is not the need for consumer protection for the motorist greater now than ever before? Did my hon. Friend see in the recent issue of the Consumers Association publication Motoring Which? that the person seeking service from a garage is not getting a fair deal—in fact, he is getting a raw deal—and that many cars are leaving garages in such a condition that they may well be involved in accidents because inadequate care is taken.

I saw those reports, and motor vehicles are among the goods about which we have most complaints in the Department, as I imagine my hon. Friend would expect. However, the Director General assures me that he is receiving co-operative assistance from this industry at present, and he has now issued a consultative document to the industry in the hope of establishing a code of practice. I hope that perhaps later in the year, or early next year, we may be able to produce something meaningful and helpful to the motorist.

Is the Minister aware that the survey to which reference has been made showed that two-thirds of garages were doing inadequate maintenance and one-third were doing dangerously inadequate maintenance? Is not this a matter of some urgency? Apart from a code of practice, ought there not to be some inspections by trading standards officers?

One has to have proper follow-up procedures and enforcement procedures if a code is to operate. However, as I said, in the summer of last year I asked the Director General to undertake an investigation, and he has assured me that he is receiving no obstruction from the trade asociations involved and none of them is in any way blocking or opposing his investigation. We must now, I think, use the existing machinery under the Fair Trading Act to allow the Director General to fulfil his commission.

Will my hon. Friend make representations to the Director General about the service industry sector, since in the absence of legislation—he must be aware of this—many service industries provide contacts with wide-ranging exclusion clauses which are a detriment to any legal action which subsequently occurs, this applying in particular to organisations such as travel firms, Laker, Pontins and so on? Will my hon. Friend make representations to ensure adequate consumer protection until we have legislation?

I doubt that that would necessarily produce worthwhile results either. As my hon. Friend is aware, the Law Commissioners are now in the process of completing a rather long-drawn-out inquiry into exclusion clauses in the service sector. Legislation has already been implemented in regard to goods. We expect that when the Law Commissioners produce their recommendations some time this year, they will, as previously, produce a draft Bill, which in turn will be the subject of consultation and then legislation.

Reverting to the question of garages, is my hon. Friend aware that it is not just the garages themselves which need investigation but their relationship with the oil companies and with the motor manufacturers? Does not my hon. Friend consider that the time has come for further investigation of the sort of tripartite system which exists in Sweden, for example, between the garages, the insurance companies and the State?

I am quite willing to consider the point which my hon. Friend puts.

Fireworks

25.

asked the Secretary of State for Prices and Consumer Protection when she hopes to make public the consultative document concerning fireworks; and if she will make a statement.

Copies of the consultative document on firework safety have today been sent to all the bodies whom we know to be interested. They have been invited to submit views to my Department on any aspect of the sale and use of fireworks and the possible need for altering or extending the existing controls. Copies of the document have been placed in the Libraries of both Houses of Parliament and are also available on request to any other bodies or persons who may wish to comment.

I have not yet had time to study the document. Is my hon. Friend aware that only a small minority of nations have passed any fireworks legislation in the past 20 years and that we are functioning under the fireworks legislation of 100 years ago? We of all the civilised nations do what the uncivilised nations do. Is my hon. Friend aware that we have more accidents during the Guy Fawkes period than are incurred by any other nation? In view of this, will he be kind enough to give an assurance that he will receive a deputation of hon. Members and interested parties?

I am grateful to my hon. Friend for imposing upon himself the unusual constraint in this House of saying that he wants to read the document before seeking to comment on it. I trust that other hon. Members will do the same. I accept his point and I am sure that he will take as an indication of our good faith the fact that I announced the intention of producing this consultative document literally within days of my Department's assuming responsibility for safety. I appreciate my hon. Friend's comments about the number of accidents and I would welcome deputations consisting of Members from either side or both sides of the House if hon. Members wish to discuss this matter with me.

Will the Minister confirm that there has been a welcome improvement in the accident record? Can he say whether the manufacturers would agree to an age limit on sales, and will he assure the House that there will be the fullest consultation before any changes in regulations or legislation are introduced?

There will certainly be the fullest consultation. I think the hon. Member will find that the document and the covering letter 1 have sent with it show that we are quite willing to look at any possibility which, if practical and sensible, will ease the situation and reduce the number of accidents. The decline in accidents is most encouraging. Last year the decline in total accidents and in serious accidents was approximately 25 per cent., but of course we should like the level to be even lower.

Will the Minister assure us that the time taken in consultations will not be simply an excuse for yet further delay before a decision is finally made?

The hon. Lady amazes me. In all the time that the Conservatives were in office, no meaningful moves were made on fireworks legislation. Within days of assuming responsibility I took action, and now she is accusing me of dilatoriness. I shall make sure that there is no unnecessary delay. We have put a time limit on the consultation and ask for all reports to be made to me by 16th June.

Trade

Tourism

26.

asked the Secretary of State for Trade what steps he has taken to consult commercial interests in the travel, transport, hotel and catering industries, in his current review of Her Majesty's Government's policy for tourism; and what further consultations he plans to have.

The Development of Tourism Act 1969 established the British Tourist Authority and the English Tourist Board to advise us on matters relating to tourism. Accordingly our consultations on policy are conducted through them. Such consultations are naturally on a continuing basis.

Is the Minister aware that in his absence his hon. Friend indicated in reply to me that he would be prepared to receive representations from the industry, and not only from the tourist bodies? Does he understand that if he is talking only to the people on whose patronage he depends and who in their turn depend on him, he is likely to get only the answer he is looking for? Will he take positive steps to talk to people who work in the industry so that the review of tourism can be meaningful?

Now that the guidelines nave been announced and we are having discussions on them it is up to the industry to make such representations as it wishes. We drew the matter to the attention of the trade and the rest of the country in a Press notice dated 21st November last year, and we are always open to receive representations from the industry. So far we have had representations from only one particular organisation representing the commercial interests.

Is the Minister aware of the considerable difficulty felt in many parts of the tourist industry on account not only of the increasing cost of rates but of the capital burden quite rightly placed on them by safety precautions and such things as fire escapes? In these circumstances will he consider amending the Development of Tourism Act to give additional help over this difficult period?

We do not intend to amend the Act. We have announced the new guidelines, and the basis of them is that there will be no increase in the real resources of Government expenditure devoted to tourism in the next few years. Within that static total there are various ways in which money can be allocated for the various purposes of tourism, including those which the hon. Gentleman mentioned, but it is up to the tourist authority and the tourist boards together with the Government and the interests concerned to decide on the best allocation in the national interest.

There is the gravest dissatisfaction among restaurant and hotel proprietors not at the fact that there are fire regulations, which are accepted, but because they are imposed wholly at the whim of the local fire officer. There is no appeal, and different fire officers say different things. In the case of one West Country hotel there have been four fire officers in succession each demanding different things, and this is becoming something of a public scandal.

Responsibility for the Fire Precautions Act belongs to the Home Secretary. I shall make sure that the hon. Member's observations are brought to my right hon. Friend's attention.

Airports (Development)

28.

asked the Secretary of State for Trade if he will make a statement about the future development of Teesside Airport.

30.

asked the Secretary of State for Trade what representations he has received on the airport development recommendations made by the CAA, in particular on the future of Teesside Airport; and if he will make a statement.

I would refer to the reply given to my hon. Friend the Member for Stockport, North (Mr. Bennett) on 16th April.—[Vol. 890, c. 131.] It would not be appropriate to make a statement about Teesside Airport in advance of the consultation document on regional airports to which I referred.

Is my hon. Friend aware of the very strong feeling on Teesside at the rejection by the Civil Aviation Authority of the findings of the Northern Airport Study, which cost £25,000, that Teesside Airport should be developed? Is he aware that the growth of the steel and petrochemical industries on Teesside will provide a vast demand for an airport of the size recommended by the independent study? Will he bear these points in mind when considering the findings of the Civil Aviation Authority?

My hon. Friend will appreciate that the recommendations of the CAA are persuasive and not conclusive. The other factors to which he has adverted will be taken into account when we make our final decision on the matter. If my hon. Friend is suggesting that an application for assistance is to be produced, I must tell him that we could consider that only if the criteria are satisfied that the airport must be indispensable to the national air transport system and that the burden of running it is more than the local community can reasonably be expected to bear.

Will my hon. Friend make those comments to the Conservative-controlled Bradford Metropolitan District Council, which is about to embark upon £7 million expenditure on the Leeds—Bradford Airport? Will he dissuade it from embarking on this expenditure, which will be a very heavy burden for the ratepayers of the area?

That local authority, just as any other, is well aware of the fact that we are engaged in a review. It is not for me to deflect it from its course by any order or power I may invoke. It is aware of the situation, and if it seeks to embark upon its course before a national airports policy is promulgated that is a matter for the council itself.

The views expressed by the hon. Member for Thornaby (Mr. Wrigglesworth) will command wide support throughout the region on an all-party basis.

There are many people outside the hon. Member's constituency who will very much hope that the factors he has put before the Minister will be taken fully into account when the matter comes finally to be decided.

The hon. Member has made his constituency point. I have nothing to add to the answer I have already given.

Will my hon. Friend accept that the references by the hon. Member for Cleveland and Whitby (Mr. Brittan) to the views of the region are contrary to those of many of us in the North-East? Some of us are extremely concerned at the threat posed in the report, about which I was delighted to hear my hon. Friend's sceptical comments, to the airport of the regional capital, Newcastle. Many of us would be anxious if anything that his Department did prejudiced the development of the city's airport.

My hon. Friend has made a similar point in principle to that made by the hon. Member for Cleveland and Whitby (Mr. Brittan) a few moments ago. I can add nothing to what I have already said. All these considerations will be taken into account.

Wales

Welsh Assembly

32.

asked the Secretary of State for Wales what progress he has made in regard to building accommodation for the proposed Welsh National Assembly.

Consultations are proceeding with a view to identifying and preparing suitable accommodation for the Assembly in Cardiff.

Is the Minister aware of the statement by the Leader of the House the week before last that there may be a White Paper on devolution in the autumn? Is he aware that this has led to worry in Wales about further delays in the setting up of the Welsh National Assembly? Does he not feel that if the Assembly is to be set up in line with the Government's original proposals the building aspects of it should already have been sorted out?

I do not think they need to have been sorted out, but they are being urgently considered and we are looking at the various possibilities. On these practical matters we shall be well up to timetable.

British Steel Corporation

I beg to ask leave to move the Adjournment of the House under Standing Order No. 9 for a specific and important matter that should be given urgent consideration, namely,

"the attempt of the Secretary of State for Industry to interfere with the commercial freedom of the British Steel Corporation as enshrined by statute and the right of its chairman to free speech."

Order. The hon. Member appreciates that he is out of order. If he wished to raise that matter, he should have given me notice by 12 o'clock today. That is clearly laid down in the Standing Order.

Petition (Rates)

I hope that you will allow me, Mr. Speaker, to make use of a point of order to draw attention to an error that has appeared in the Supplement to the Votes and Proceedings. On 21st March my hon. Friend the Member for St. Marylebone (Mr. Baker) and I presented a petition on behalf of the ratepayers of the City of Westminster. The ratepayers of Westminster were complaining about the burden of rates imposed by the Greater London Council and the Inner London Education Authority.

When the terms of the petition were published in the Supplement to the Votes and Proceedings on 24th March, an additional and quite imaginary authority, the Inner London Council, was added to the list. I should have picked this up at the time, but I did not read it as carefully as I should have done. I assumed that when it appeared in the Votes and Proceedings, it would be correct. When the Department produced its reply, it, too, picked up Inner London Council "and made it appear as though the ratepayers were complaining against the City of Westminster, which was not their intention.

We have therefore had a catalogue of errors in the proceedings of the House, and I should be grateful if it could he placed on the record that both the original report and the ministerial reply were in error. I do not know whether it is possible to do anything about it at this stage, but I hope that at least my statement of this correction will appear in Hansard.

I will consider the matter and see whether it is possible for me to unscramble this dish.

Bill Presented

Child Benefit

Mrs. Secretary Castle, supported by Mr. Secretary Ross, Mr. Secretary John Morris, Mr. Joel Barnett, Mr. Brian O'Malley, and Mr. Alec Jones, presented a Bill to replace family allowances with a new benefit to be known as child benefit and, pending the introduction of that benefit, to provide an interim benefit for unmarried or separated parents with children; to repeal paragraph 5 of Schedule 2 to the Supplementary Benefit Act 1966; and for purposes connected with those matters: and the same was read the First time; and ordered to be read a Second time tomorrow and to be printed [Bill 147].

Welsh Development Agency Bill

Motion made, and Question put, That the Welsh Development Agency Bill be referred to the Welsh Grand Committee. —[ Mr. John Morris.]

Whereupon not less than twenty Members having risen in their places and

signified their objection thereto, Mr. SPEAKER declared that the Noes had it pursuant to Standing Order No. 72 (Welsh Grand Committee).

On a point of order. Mr. Speaker. The Welsh Development Agency Bill was to have been referred to the Welsh Grand Committee as a matter of exclusively Welsh interest. Is it in order for Members representing non-Welsh constituencies to object to that?

On a point of order, Mr. Speaker. As there is a heavy legislative programme before the House and as there is objection to the Welsh Development Agency Bill, is it possible that the Bill will not now go through this Session, with the result that the people of Wales might not benefit from it?

Orders Of The Day

Employment Protection Bill

Order for Second Reading read.

3.34 p.m.

I beg to move, That the Bill be now read a Second time.

My right hon. Friend the Secretary of State has asked me to convey his apology for his absence from the debate today. Having personal knowledge of the great extent to which the Bill is the result of his efforts and his commitment, I deeply regret that he is in a hospital bed instead of at the Dispatch Box.

The Employment Protection Bill is the second stage of the Government's programme of industrial relations legislation. The first stage was the Trade Union and Labour Relations Act and the Trade Union and Labour Relations (Amendment) Bill repealing the controversial features of the 1971 Industrial Relations Act. This we intend to follow with an industrial democracy measure that will make a logical extension in this field.

The two main themes of the Employment Protection Bill are the strengthening of collective bargaining and the establishment of new rights for individual employees, especially in regard to job security. Before describing the individual provisions, I want to comment briefly on these themes.

The collective bargaining theme is reflected in many of the Bill's provisions, notably those dealing with trade union recognition, disclosure of information and the reform of wages councils. Equally if not more important is the establishment of the independent Advisory, Conciliation and Arbitration Service on a statutory basis. Within the area of individual rights the Bill introduces provisions that include guarantee payments, remuneration on suspension on medical grounds, maternity pay, the right to return to work after maternity leave, and time off for public duties.

These individual rights are attacked on grounds of added cost to industry at a time when it can least afford it and, in the terms of the Liberal amendment, as taking no account of the problems of small firms and small businesses. I am ready to concede to hon. Members opposite that that may be part of the case contained in the amendment tabled by the right hon. Lady the Leader of the Opposition and her hon. Friends.

The cost argument can be and has been exaggerated. Many items in the Bill involve little or no extra cost for employers. Changes proposed in the law on unfair dismissal will affect only a minority of employers who fail to maintain generally accepted standards of reasonable behaviour towards their employees. Most of the extra cost will result from the guarantee payments and maternity provisions.

If all the provisions of the Bill had been in force last year, we estimate that the extra annual cost to employers would have been about £100 million to £120 million. This is approximately equivalent to £5 a head or lop a week for employees. Of that about 8p would be accounted for by the guarantee payments.

This clearly does not fall evenly on all employers. Those with no lay-offs or short time are not affected at all by the guarantee payments. In many industries where there are lay-offs and where short-time working occurs there are already voluntary schemes that are better than the modest proposals in the Bill. Where these operate, there is no need to fear additional costs being imposed as a result of the Bill.

It is said that the Bill will bear heavily on small firms and businesses. I must make it clear that I do not in any way underestimate the problems of small firms and businesses, but I think that those problems must be tackled in other ways.

Merely to get the record straight: I should be grateful if the hon. Gentleman would tell me which part of the Liberal amendment refers to the pressure on small businesses. I have read it three times since this morning and I cannot find it mentioned anywhere.

I am very sorry and I apologise deeply to the hon. Member. I have accused him of words that are in the Conservative amendment, not in his. That is a terrible thing to do to any man and he has my unreserved apology. Now that I have been very properly corrected, I can address myself to the correct quarter.

There is a serious problem for small firms and businesses, but it must be tackled in other ways. I cannot believe that it is right to give the employees of small firms lower standards of statutory protection of conditions than those in large firms. It would be wrong on the grounds of equity and appreciation of the important räle that small firms have in our economy to make their employees second-class citizens for the purpose of employment protection.

Can the Minister tell the House whether he accepts that there are serious problems for small firms and that they must be dealt with? Can he say when the Government intend to deal with those problems and when will such a programme be announced?

The Government are giving serious consideration to the problem of small businesses. My hon. Friend the Under-Secretary will be saying something about this when he replies to the debate.

Dealing with those points in the Bill which strengthen collective bargaining, I note the reference in the amendment tabled by the Conservative Opposition to making
"no attempt to establish a fair balance between … management and unions".
What the Bill does is propose changes in the law to make it appropriate to the good management—trade union relationships that have been developed within the United Kingdom. Good management does not refuse information for negotiation. It does not fail to consult on mass redundancy. It does not refuse to recognise trade unions or seek to discriminate against employees on grounds of membership of an independent trade union.

These are not the practices of good management in its relationships with trade unions. There is no requirement which can sensibly be laid upon us to say that we must, because these things are being required by law, deny trade unions something of their power in relation to management.

The Bill is proposing to change our law from legal support for management by managerial prerogative to legal support for management by consultation. It requires management to inform, consult and in some cases to negotiate. It does not create a legal obligation on management to agree, nor does it prescribe the outcome of those consultations and negotiations.

Part I of the Bill establishes the Advisory, Conciliation and Arbitration Service on a statutory basis and defines its functions. It charges the service with the duty of promoting the improvement of industrial relations, encouraging the extension of collective bargaining machinery and, where necessary, the reform of such machinery. The service has a key räle to play in promoting the peaceful settlement of disputes by conciliation or by securing agreements to refer disputes to arbitration. Since the service started last September it has made good progress under the direction of Jim Mortimer and has gained the confidence of unions and management.

In the first six months of its existence the service dealt with 50 per cent. more requests for conciliation than did the Department of Employment in the previous six months. The number of cases dealt with by arbitration in the same period increased by 100 per cent. This leads us to have confidence in this service and its ability to undertake the wider responsibility and greater räle which the Bill prescribes for it.

Clause 10 and Schedule I provide for the establishment of a Central Arbitration Committee with an independent chairman and members drawn from the trade unions and employers' associations. It is to this body that a trade union may ultimately go to obtain a right to recognition if this cannot be resolved by negotiation or conciliation. This part of the Bill is intended to deal with the problem of the employer who refuses to recognise any union or, as is more common, the employer who recognises manual but not staff trade unions. Here I ought to declare an interest since I am a sponsored member of the technical and supervisory section of the AUEW. Although I have not discussed this with it, my union may well seek to use this provision.

This part of the Bill has another function which has not been generally appreciated. Recognition issues for the purpose of the Bill cover questions of the area of negotiation. Under these provisions the issue of whether a union which can negotiate wages and hours should be able to negotiate on other matters such as pensions or training can also be determined. It also raises within its provisions the possibility that a union which already has a negotiating agreement and is recognised for certain grades of workers may seek through this vehicle to extend that negotiating right to cover other grades of workers. Part I of the Bill also requires employers to disclose to recognised unions the information they need for collective bargaining.

Part II covers new rights for individual employees. These include the guaranteed payments, intended to ensure that workers laid off because of shortage of work will receive certain income from their employer for a limited time. Initially it is proposed that the guaranteed payment should be a daily payment calculated from the employee's weekly pay as defined in Schedule 3. This is limited to a maximum of £6 a day and to five days in any calendar quarter. The limits can be raised by order subject to the affirmative procedure in both Houses.

Under Clause 76 the Secretary of State is under an obligation to review these limits, and it may well be that what we are now considering will lead to a series of debates on affirmative orders in future years with this House having control of what are the minimum protections for people laid off or who start short-time working in industry. I must make it clear that this guarantee does not extend to those laid off as a result of a dispute occurring within the area of their employment or a dispute within the premises of their employer.

The maternity provisions in Clauses 38 to 46 contain important benefits for women who leave their job on account of pregnancy and wish to return to work after childbirth. They will be entitled to six weeks' paid maternity leave if they work continuously for two years for an employer. A woman would also have the right to return to work in the occupation in which she was previously employed.

Does the Minister not appreciate that, while this has much to commend it, those firms which employ only a small number of women will have the greatest difficulty in keeping a job open for a woman who has left to have a baby? Further, what is to become of those people who are recruited temporarily to fill the vacancy? What will their position be? Will it not be unfair to them?

We appreciate that there are certain difficulties not only for small firms but for large firms, too, which may be required to give maternity leave to women carrying out a highly specialised job which no one else can perform. We do not think that such difficulties are confined to the small firm. We recognise that an employer must be protected against an unfair dismissal claim by someone whom he has employed on a temporary basis to fill the job of a woman on maternity leave. That is covered by the Bill.

We also recognise that in some cases it will not be possible for employers to give exactly the same job back but rather a job in the same occupation. There are many problems attached to this. We do not deny that. We expect to debate them at length in Committee. What we are anxious to establish at this stage is that there should be, as a fundamental right of working women, the ability to take maternity leave and return to work afterwards.

(Hemel Hempstead): Will my hon. Friend confirm that in the small number of firms which currently have provisions either for full or for part paid maternity leave the problems to which the hon. Member refers have been overcome in practice?

I can confirm that employers voluntarily operating such schemes who have discussed their problems with me have not raised this point. They have raised other problems. None of them has suggested that the problems they have faced have been such that they would wish to return to the earlier situation.

Can the Minister confirm that there is no minimum size laid down in this instance and that this will apply to a Member of Parliament and his secretary? Can he explain how that will work?

To the best of of my understanding we do not define minimum sizes of employer or the size of staff for the purpose of this part of the Bill. In order to establish the right of reinstatement a woman normally will have to notify her employer before she starts her maternity leave if it is her intention to return, and normally it will not be possible for maternity leave payment to start more than 11 weeks before confinement. Those are some of the conditions which attach to it.

I want to refer to the proposals about insolvency in the Bill. These are designed to give protection to employees of firms which go bankrupt. In recent years about 30,000 to 40,000 employees a year have been affected by this problem. The Bill makes it possible for arrears of wages, holiday pay and pension fund contributions to be met from an extended redundancy payments fund. These claims will be met to a limit of £80 a week. We hope that as a result of these provisions those faced with the problem of working for a firm which goes bankrupt will be able to obtain prompter payment and will suffer less financial hardship in a way which will not damage the position of other creditors of the company.

Part II of the Bill establishes many other rights, including protection against victimisation for trade union membership or activity, time off for trade union duties and certain types of public duty, and guaranteed payments for employees who are suspended from their normal occupation on medical grounds under a statutory requirement and for whom no alternative work is available.

The improvements proposed in the unfair dismissal provisions of the Trade Union and Labour Relations Act are mainly to facilitate reinstatement or re-engagement rather than financial compensation for dismissal. The Government are particularly concerned about cases in which employees are dismissed for trade union membership or activity, especially because such dismissals are more likely to give rise to industrial dis putes than most other reasons for dismissal.

The 1971 Act put such dismissals in a special category in that they were to be treated as automatically unfair. We propose to strengthen that protection. Suitable amendments will be introduced in Committee so that an employee who considers that he has been dismissed or given notice of dismissal on account of trade union membership or activities, whether or not that is the reason given by the employer, may apply, with the support of his trade union, for a preliminary hearing by an industrial tribunal. If the tribunal is satisfied that the employee has a strong case, it will be able to give a ruling that he should be suspended on full pay. His contract of employment will then continue until his complaint of unfair dismissal has been resolved by conciliation or by a full tribunal hearing.

I apologise to the hon. Gentleman for intervening because the question which I shall ask relates to Part I which, I appreciate, he has passed. My reason for asking it now is that I do not propose to trouble the House with a contribution to this debate because I hope to catch Mr. Speaker's eye in tomorrow's debate.

Is there any definition in the Bill of a trade dispute? There does not appear to be one in the interpretation clause, Clause 112, and there is no independent interpretation clause to Part I. The reason I ask is that several hon. Members, including myself, pressed the Secretary of State to refer the signalmen's dispute to the Advisory, Conciliation and Arbitration Service and he declined to do so on the ground that it was not an appropriate dispute for that purpose. Will the position be more general and wider under the Bill? I should be grateful for any information which the hon. Gentleman could give. If it is not convenient for him to answer now, perhaps the Under-Secretary of State will refer later to the point.

I am sure that the definition of a trade dispute is the same as that which we used in the Trade Union and Labour Relations Act. I think that there is a cross-reference from a schedule of this Bill to that Act. But I shall check on that and if I am incorrect in any way I shall write to the right hon. and learned Gentleman.

Part III contains provisions ***or the reform of wages councils, to widen their powers and stimulate progress towards voluntary collective bargaining in those areas of industry where statutory control of wages and conditions is still necessary. My hon. Friend the Under-Secretary of State will want to say more about this subject, but the levels established by wages councils certainly give me no confidence in reliance on this form of statutory protection as a means of solving the problem of low pay.

It is my hope that the special provision for wages council industries—Clause 88 and Schedule 10—will be extensively used by independent trade unions to raise the standards of their members in wages council industries. This provision will enable them to make a claim to ACAS if an employer is paying less than the minimum negotiated with other employers in similar circumstances.

Clause 88 and Schedule 10 also contain provisions about the extension of terms and conditions which form an important part of the Government's measures to help the low paid and to extend collective bargaining. These provide for claims to be made to ACAS where an employer has workers employed on terms and conditions less favourable than the general level observed by other employers in the same industry, in the same district, and whose circumstances are similar. This is in essence the same right that the fair wages resolution gives to employees on Government contracts.

(Brentford and Isleworth): Can the hon. Gentleman give the estimate made of the cost to industry of Schedule 10? He gave a global figure and broke it down a little. Will he give the breakdown for Clause 88 and Schedule 10?

No, I cannot give a breakdown, but I can tell the hon. Gentleman —I know of his deep interest in the matter—that we have discussed this provision with the CBI and the TUC with a view to finding out their ideas about its impact. I will break confidence by saying that we had very different estimates about what its effect would be. We have not been able to give a break- down because it would involve a large number of assumptions being made about interpretations which will be given by tribunals and about the degree of confidence of trade unions in seeking to use this as a means of raising the standards of their members.

Part V of the Bill—

I am surprised that the hon. Gentleman has not mentioned, under Part IV, Clause 101, which transfers from local authorities to the Department of Employment the enforcement functions and licensing functions in the Employment Agencies Act. What is the reason for this? I understand that there has been no consultation on this matter with the local authority associations.

My hon. Friend the Under-Secretary of State wished to deal with that question, but we in the Department want to make this a centralised function because of other responsibilities which we believe will fall on the Government in relation to employment agencies.

On the aspects of the Bill which deal with the question of the handling of redundancies, the Bill requires employers to consult representatives of recognised trade unions about all redundancies and to provide them with all relevant information. Consultations must begin at least three months in advance of redundancies which involve 100 or more employees over a period of three months and at least two months in advance of redundancies which involve 10 or more workers over a period of one month.

Employers must also give similar periods of notice to the Secretary of State so that necessary plans for redeployment or retraining can be made by the Manpower Services Commission and its agencies. If there are special circumstances which make it impracticable for an employer to comply with the requirements, he has a duty to take whatever steps are reasonably practicable in the circumstances.

The Government attach the greatest importance to these provisions, particularly in the present circumstances, when redundancies are unfortunately all too common. They implement, and indeed, go well beyond, the recent EEC Directive on Collective Dismissals, in the shaping of which United Kingdom representatives played a full and constructive part during the discussions in Brussels.

Quite apart from our EEC obligations, we think it right and necessary to legislate on these lines. Advance consultation with the unions and advance notification to the Department are good employment practices and are already accepted as such by many employers. However, there are still some who apparently think it right to declare redundancies at very short notice or even with no notice at all, with little regard to the hardship and worry that this inevitably causes.

Now that the proposals have been published in the Bill, I hope that employers will not wait for them to become law but will put them into practice at once if the need arises. By doing so they will ensure that the problems of redundancy are fully explored in advance and dealt with in a sensible and humane way.

Before leaving the subject of redundancies. there is one other point to which I should refer. In the course of his Budget speech the Chancellor of the Exchequer mentioned that the Government propose to take powers to pay a temporary employment subsidy. The scheme would be used to alleviate some of the effects of high unemployment in the worst hit areas. We hope that in the event its use will prove unnecessary. It is, however desirable to provide for a short-term subsidy to be offered to a firm which is prepared to defer redundancies in order to provide an opportunity to initiate arrangements for retraining or for other possible action to facilitate employment.

The Government intend that the scheme should apply only in respect of workers who would otherwise be unemployed or who would displace other workers. It is therefore proposed to restrict the subsidy to development areas. Therefore, we shall bring forward in Committee a provision which will amend the Employment and Training Act 1973 so as to empower the Government to operate the scheme. Consultations are already in progress with the CBI and the TUC to work out the details.

I turn to Clause 99 which deals with people picketing. This is a declaratory provision. In other words, it does not alter the existing law as established by the House of Lords in the recent case of Broome v. Director of Public Prosecutions. It does, however, put it beyond doubt that the rights of pickets include the right to exercise persuasion on other people by peaceful means short of obstruction, as well as the right to attend for that purpose at any place other than a person's home. This clause makes no change in the position as regards the stopping of vehicles. That position is not entirely satisfactory, because whereas pickets usually have a reasonable opportunity to communicate with people who approach on foot, it is much more difficult. if not impossible, for them to do so in case of people in vehicles. Consequently the right of people picketing may be made ineffective in a way which can hardly have been foreseen when the law on picketing was first framed.

We have given a good deal of thought to the possible ways of dealing with the problem. There have been discussions both with the TUC and with the police organisations. However, it has not so far proved possible to find a solution which meets the legitimate needs of pickets without causing serious difficulties for the police. Clause 99 goes as far as the Government think is right at present, although we shall continue to study the problem and keep it under review.

The Minister has said that Clause 99 was designed to clarify the law. Can he tell us what it means? Can he give us an example of conduct which might be said to be in doubt now and which will be made clear by the Bill? I am blessed if I can. Can he give us an example of something each side of the line supposed to be drawn by these provisions?

I am certain that this is a matter which will be debated in Committee. My understanding is that the case to which I referred established quite clearly that there was the right to attend at a place for the purposes of picketing and peacefully communicating. What was thrown into doubt was the extent to which there was the right to carry out peaceful communication. I assure the hon. and learned Gentleman that the intention of the clause is to do no more than to make it absolutely clear that there is a right peacefully to communicate, short of obstruction. That is the aim of the clause.

(St. Helens): I am not asking my hon. Friend to interpret the law as he intends it to be when the Bill passes on to the Statute Book. However, I wonder whether the Bill will clarify the position of the farmers who caused an obstruction on the highways and the fishermen who obstructed the free passage of shipping into our ports.

I do not believe that the Bill will clarify the position in any way whatsoever. One may have views whether an attempt to stop a vehicle for two minutes can be regarded as an obstruction and whether holding up the entrance to a seaport for 24 hours may be similar action. As I understand the position, the Bill does not help us to solve that problem. We shall have to continue to examine the way in which we can reconcile our law on obstruction with the right to picket and peacefully to communicate.

I should like to draw the attention of the House to the position of staff employed in Parliament. Parliamentary staffs have not previously been covered by legislation of this kind. I am sure, however, that the House will agree that it would be indefensible if, in matters covered by this legislation, parliamentary staffs were in any less favourable a position than staff employed by a Government Department. We have been giving special consideration to their position, in consultation with the authorities of both Houses. I am able to give the House a firm assurance from the House authorities that they will ensure that, as far as is constitutionally possible, the staff here are treated similarly to civil servants in these matters. If it were the wish of the House that this undertaking should be embodied in a formal way, we would see how this might best be done.

When examining this problem I was deeply concerned to find that the 1812 House of Commons (Offices) Act still applies. That Act gives the Serjeant at Arms and the Clerk of the House power to dismiss staff without notice, with no redress or appeal. I am certain that it will not be the wish of any hon. Member of this House that that position should continue if it is within our power as legislators—as I am sure we shall find it to be—to deal with it.

Clause 100 tackles the problem of those denied unemployment benefit because of the grade, class and financing rules, when they are laid off due to a strike at their place of work. At present, if somebody is laid off as a result of a strike at his place of work, he has to prove that he is not participating in the strike, is not financing the strike, is not directly interested in the strike, and is not of the same grade or class as somebody who is participating, financing or directly interested. He has to prove all that in order to obtain unemployment benefit. This has resulted over the years in a growing number of cases in which great resentment is felt by people who are laid off, due to a strike, through no fault of their own, and are denied unemployment benefit. The abolition of the financing test and of the grade or class test was recommended by the Donovan Commission and has been the policy of the Labour Party for many years.

Many hon. Members will have examples from their own constituencies of many labourers who have been laid off and have received no benefit because one of their number had retained dual membership of a skilled union to retain benevolent fund rights and where it was held that because he was financing a strike, by paying trade union contributions, all others of the same grade or class —that is, all labourers—should also be denied unemployment benefit. We propose to remove these tests from our law, and I believe that by doing so we shall solve a long-standing problem, which has caused great resentment and a great sense of injustice.

Finally, I draw attention to Clause 113, which makes it possible for the protection afforded by the Bill to be extended by order in council to oil rigs and other offshore installations. I know that a number of hon. Members who are conversant with the conditions and the industrial relations position on oil rigs are anxious that this provision should be in the Bill.

Although the Bill is primarily concerned with employment protection, it has wider significance. It is the clearest possible evidence of the Government's firm commitment to the social contract, which in our view remains the only realistic policy for containing inflation. Like the legislation on sex discrimination and pensions which is already before the House, the Bill is designed to remove inequities between different groups of workers. Many of the rights which it proposes to extend to all employees have been taken for granted by most of those in white-collar employment.

Another of the Bill's aims is to extend collective bargaining to areas other than pay. This is entirely consistent with the guidelines for the social contract.

Finally, the provisions about disclosure of information complement those in the Industry Bill, while the development of planning agreements will combine with the proposals in this Bill to give workers, through their chosen representatives, a more effective say in decisions which vitally affect them.

In all these ways the Bill fits in with the Government's social and economic policies, and forms an essential part of them. It derives from the experience, problems and needs of the men and women who work in the industries and services of our country. By the Bill we can render a service to those whose labour creates the wealth of the country. For that reason above all others I commend it to the House.

Mr. Speaker has selected the amendment in the name of the official Opposition.

4.13 p.m.

I beg to move to leave out from "That" to the end of the Question and to add instead thereof:

"this House whilst recognising that parts of the Employment Protection Bill give legislative effect to good industrial practice, declines to give a Second Reading to a Bill which makes no attempt to establish a fair balance between the rights of management and unions, adds a heavy burden of cost without proper consideration of how it should be shared by employer, employee and State, and takes no account of the particular problems of small businesses."
I wish to start by saying how sorry we are that the Secretary of State for Employment is not here and, on behalf of the whole House, to wish him a complete and speedy recovery. As the Minister of State pointed out, the Secretary of State is the author of the Bill. I hope that he will find some enjoyment, if not complete enjoyment, in reading in his bed the Official Report of this Second Reading debate.

In introducing the Bill, the hon. Gentleman has shown his customary good manners and helpfulness. I hope he will not take it amiss if I say that I hope his right hon. Friend will be back for the Committee stage, when I hope he will take account of what we say.

The Bill is very complicated. The only people who should be congratulated on it are the parliamentary draftsmen, because, although it shows signs of hasty drafting, it must have been a mammoth task to produce a Bill containing 115 clauses and 16 schedules. My right hon. and learned Friend the Member for Huntingdonshire (Sir D. Renton) would know all about that task.

One example of hasty drafting concerns matters for the Industrial Tribunal, which are spread over 10 different clauses. It would have been greatly for the convenience of those who have to interpret the Bill if those matters could have been consolidated in one clause.

The Bill has been introduced very late in the Session. I cannot remember a Government introducing a Bill of this importance and size so late and expecting to get it through by the end of July, with perhaps a little left for the spill-over after the recess. As the hon. Gentleman pointed out, amendments are now necessary as a result of the Budget proposals on retraining and keeping in employment those who would otherwise be put out of employment over the next few months. There will be amendments to Clause 47. and the hon. Gentleman has already said in answer to my hon. and learned Friend the Member for Southport (Mr. Percival) and Basingstoke (Mr. Mitchell) that there will have to be lengthy discussions in Committee. When my hon. Friend the Member for Basingstoke talked about the maternity clause, I wondered whether we should spend nine months in Committee considering it if we are to bring some sense to these matters.

Have we the time to do all this? What are the Government's proposals in this respect? It brings Parliament into disrepute when we cannot give proper consideration to such a Bill. We shall not want to filibuster on it, but it lends itself to enormously long discussions on intricate matters. Parliament does not do itself justice if it just skips through a number of clauses because it wants a Bill completed by, say, the beginning of July so that the Bill can go to another place. That is not the right way to tackle such legislation.

The Bill could have formed a number of Bills of reasonable length. That would have been a much more suitable way to introduce the measures that it embodies.

Our amendment says that no attempt is made
"to establish a fair balance between the right of management and unions".
The Bill is throughout concerned with the rights of trade unions and not enough with the responsibilities that they must shoulder as well. As trade unions are now such an important part of our economy and State, they must accept responsibilities as well as rights. That is well brought out in the Liberal amendment, which points out that they should honour their obligations under the social contract before the Government introduce further legislation as part of their undertakings under the social contract.

When the hon. Gentleman asks what obligations we wish to see imposed, our reply is that at present there are no obligations on unions to avoid strikes, keep to contracts, respect the public interest, and promote greater efficiency through increased productivity, more flexible trading methods, greater mobility of labour, and so on. None of those is an obligation which automatically flows from what is in the Bill.

A well-known labour correspondent, John Elliott of the Financial Tunes, described the Bill as—
"a bonanza for the unions with hardly one measure which pleases any employer."
When we discussed the article at Question Time on Tuesday, the Secretary of State for Employment tried to make out that that comment was contained in a headline and was not necessarily a reflection of what John Elliott felt. As no doubt the right hon. Gentleman has since discovered, the comment was firmly contained within the article.

Clauses 11 to 16, which deal with recognition rights of unions and which allow unions to refer a recognition dispute to ACAS, whereas an employer cannot, are one example of the balance not being fairly struck between employers and trade unions. We shall wish to change that in Committee to make it possible in those circumstances for an employer to consult. We shall also wish for ACAS to have a time limit within which to finish it, and we shall try to write into the Bill that there shall be no industrial action whilst an inquiry is going on. Those are constructive measures that we shall try to write into the Bill.

Another matter of great concern to the Opposition and to many people outside relates to Clause 103 and Schedule 13, in which the right to appoint safety representation is given only to the recognised trade unions. The Opposition and many people who are members of trade unions, as well as the 50 per cent. of workers who are not members of trade unions, feel particularly strongly about the clause. We all feel that safety is too important a matter to be used to assert sectional interests. That is the only way in which one can interpret what is behind the Government's attitude. If I had to find a more suitable name for the Bill, I should call it not the Employment Protection Bill but the Trade Union Benefits (No. 2) Bill.

We should take a moment to discuss what happens when we shift the balance of power between employer and employee and between the House and people outside the House. That is an important matter for the country to think about. There is no doubt that power has shifted from this place and from the employers and into the hands of trade unions. I do not mind power shifting from employers to trade unions provided that there is a balance, but I object to power shifting from this place, because this is where real power must always reside if we are to preserve democracy.

All the actions that are being taken by the Government result in the shifting of power to the trade unions and away from Parliament. The shift in the balance of power from Parliament must concern us all. It is a shift of power resulting not only from legislation but from inflation. With inflation running at 21 per cent., 22 per cent., 25 per cent. or 27 per cent., combined with the Government's legislative action, there is not much chance of our keeping the freedom of which the House has for so long been the main centre in the world.

We were told by the Minister of State that the Bill is a further instalment in the social contract. If I have his words down correctly, he said that the social contract was the only realistic policy for containing inflation. For anyone to go on saying that the social contract is containing inflation when inflation is now at a higher level than it has ever been and is known to be going higher as the year proceeds, is to perpetrate a cruel deception on the public. Anything which makes the public believe that the social contract is working can only be a deception which is bound to have a reaction. Such an attitude suggests a doom-laden complacency because it prevents the Government from taking action which they should, and know they should, be taking.

With unemployment rising at a seasonally-adjusted rate of between 30.000 and 40,000 per month, and prices going up at the rate they are, for a Minister to say that the social contract is the only realistic policy for containing inflation shows that he and the Government do not live in the same world as the rest of us.

I shall now say a word on the subject of unemployment. None of us in Opposition wishes to see unemployment go higher by one man or woman. The attitude which we have adopted towards unemployment is a good deal more responsible than was the attitude adopted by the Labour Party when it was in Opposition in 1971–72. We accept that in so far as inflation is allowed to continue unchecked and increased wages are allowed to be granted unchecked, as they are at present, unemployment is bound to go higher. It is true that one man's wage increase is another man's unemployment, and that is now being brought home to many people throughout the country. It is a policy that we deplore.

Looking back over the years, with all the difficulties with which the previous Conservative Government were faced, I make no apologies for the stand we tried to take in February 1974. If the country had come with us in February 1974 we should not have got into the mess that this lot have got us into. [Interruption.] Before hon. Gentlemen get too excited about what they know to be true, I will continue my speech.

The amendment refers to the Bill adding a heavy burden of cost. The Minister of State told us that the cost would be about £100 million plus. He broke that down into £5 a year or lop a week per person—I am not sure which figure he chose. He implied that the figure was not much—£100 million. The question is whether we can afford that in addition to everything else for which we are having to pay as a nation. Is this the right time? Can we afford to make universal nearly all the benefits which are accepted practice by the biggest and best of our industrial firms? I do not doubt that in time we should all wish to see many of these benefits brought in —the maternity benefit, the guaranteed week payments and so on—but there is a case for saying that these should be met by the State and not by the employer or the employee. In many Common Market countries those benefits are the responsibility of the State. The House has not at this time decided what is the responsibility of the employer, the employee or the State in these matters, and we should do that before we decide to put the responsibility on to the employer, as the Bill does.

Members opposite must understand that the angry reaction of employers to the Bill stems not so much from one particular item or one particular increase in cost, but from an accumulation of irritations with the Government over a period. I think that that irritation goes back and extends to more than one Government. Government legislation is now pouring through the House. It is ill digested and ill thought out. Whether it be capital transfer tax or the measures in the Bill, a great deal of legislation is proving too much for a large section of industry to digest. Small firms, which my hon. Friend the Member for Basing stoke has already mentioned, are of particular concern in that respect. I am glad that we have referred to small businesses in our amendment. I think that the Liberal Party would agree with that approach.

I think that it would be right at this stage to set a limit to the number of employees so that under a given number the Bill will not operate. It may be argued that it would be wrong, as it were, to make second-class citizens. However, I do not believe that by adopting that approach we would be making second-class citizens. There are an enormous number of people who prefer to work for small firms and to work for a boss who knows all the men and women by their Christian names. They can leave work when they have to and they can work extra hours when necessary. In small firms there is a different relationship between employee and employer and a great many people are employed in that way. A great many people prefer to be employed in that way. We need to increase the number of small businesses and small firms and not to discourage them.

I suggest that my hon. Friends and myself should table an amendment in Committee to exclude small businesses. By such an amendment we would seek to exclude small businesses with 100 or fewer employees from the operation of this measure at this stage. I think that would meet with the approval of all employees in small businesses as well as employers.

Would the right hon. Gentleman advocate a similar lower limit for the Redundancy Payments Act and for the unfair dismissal provisions of the Trade Union and Labour Relations Act?

No, I would not do so for those measures. Both those measures—and I am glad that the hon. Gentleman pays tribute to them—were introduced by Conservative Governments. The Redundancy Payments Act and the unfair dismissal provisions were both the result of Conservative Governments. I am pleased to support that.

No, not again. I must get on. The Redundancy Payments Act 1965 was introduced as the result of Conservative Government action in 1964 for which Lord Blakenham was responsible.

Will the right hon. Gentleman correct that statement? Does he recall that the Redundancy Payments Act 1965 was introduced by a Labour Government?

It followed the White Paper that was introduced by a Conservative Government. The only trouble was that we did not have the time to put the White Paper into operation. The Act was entirely based on the proposals put forward by Lord Blakenham when he was Minister of Labour.

I now turn to the information clauses, to which we have no objection. They are the same clauses, with perhaps a little elaboration, as were contained in the Industrial Relations Act. I have in mind Clause 56 of that Bill. They were also set out in not very great detail in the disclosure of information clauses in the Code of Industrial Relations Practice. We should give employees every possible help so that they know what is going on in their firm or organisation. There has been a great change in the attitude of industry to these matters in recent years. I would like to see that change extended in every possible way and to the extent that the clauses guarantee security, where necessary, for employers. That also applies to employees or trade unions for the purposes of collective bargaining. I am delighted to go along with that.

I turn to what I believe is a contradiction in Government policy. As I understand it, Labour Members and some trade unionists outside the House wanted to destroy the Industrial Relations Act because they maintained that industrial relations and the law were totally different. They claimed that the law had no part to play in industrial relations. The Bill introduces the law in many areas where we have so far proceeded in a voluntary manner. I grant that it has a trade union bias, but it introduces the law in that respect.

I have come to the conclusion that it is not so much that Labour Members or trade unions dislike the law, as that they merely dislike some laws and that they dislike Tory laws—[HoN. MEMBERS: "Yes."] That is what it is. We now know the position from the reaction of those on the Government benches. We now know what it is they dislike. The hon. Member for Tottenham (Mr. Atkinson) has said that there are two sorts of law—namely, ordinary law and political law. He claimed that we do not have to obey political law. I think that the position is now clear.

The extension of statutory regulations into many areas reserved for free collective bargaining is in many respects a retrograde step. Many matters such as guarantee payments, maternity arrangements and time off for trade union activity would have been better introduced through codes of practice rather than through writing them into the law. Traditionally they are matters for voluntary arrangement and it would have been best to leave them for voluntary decision.

I have received a letter from a small business man about the maternity arrangements that are proposed in the Bill. He says that the reinstatement provision cannot be made to work in a small company where it is necessary to train only one order clerk or one wages clerk. He points out that if such a person goes on maternity leave it is necessary to train someone else, and that a small company cannot train someone for only a few months. It is necessary to have a continuity and regularity of employment and the Bill will militate against that as regards maternity arrangements. If the arrangements are left as they are, there is a good chance that large firms, where many women are employed, will react against the employment of women. That could decrease the number of jobs that are available for women. On this subject, I have received a good deal of information and many representations.

I turn briefly to Clause 1 and the Advisory, Conciliation and Arbitration Service. I say straight away that we support the service. We wish it well, and it will not be our intention to disband it when we return to office in the near future. We shall support the service but we think that the terms as laid down are much too narrow and much too concentrated on collective bargaining. We believe that the service should concern itself with the peaceful settlement of issues that arise between employer and employee, and the safeguarding of individual rights of employees who are threatened by employers, trade unions or fellow employees. The service is much too narrow and too much based on collective bargaining.

I hope that Labour Members will pay attention to the fact that an employer will not be able to submit a recognition dispute to the Advisory, Conciliation and Arbitration Service. That may well result in employers not wishing to use ACAS and not having a great deal of confidence in it. In trying to build up a proper conciliation and arbitration service the organisation involved must have the respect and full authority which only a totally independent authority can command.

In regard to the composition of that body, I am not certain we need three academics or three outsiders. The matter should be examined in Committee. I do not know whether it is a good practice to have its chairman appointed by the Secretary of State or indeed to have the the service appointing its own chairman. Again, we should like to examine that matter in Committee.

I hope that employers will put their weight behind ACAS and appoint top-grade people who are well known in industry and in the country generally. We shall give further attention to that matter in Committee. We wish ACAS to go ahead, and we hope that it will turn out to be successful.

I turn to the Central Arbitration Committee, which will replace the Industrial Arbitration Board. Clause 88 deals with the extension of terms and conditions and gives the right to a trade union to take a claim to the Central Arbitration Committee. The CAC can make an award and the employer must submit to it. But what happens if the union concerned fails to observe it? I see nothing on those lines laid down in the Bill, and we should like to hear the Government's views.

I should like to examine the relationship between the CAC and ACAS. Suppose the Government lay down a pay policy. Can ACAS tell the CAC what to do? What powers has ACAS over CAC in these matters? Perhaps the Minister will give us that information.

Many of the new benefits are to be enforced by the Employment Appeal Tribunal under Clause 77. That tribunal will have High Court status. My hon. and learned Friend the Member for Southport will be interested to compare the clause which sets up the new body with the clause in earlier legislation which set up the National Industrial Relations Court. The words have been juggled around a little, but they are absolutely identical. I presume the words have been juggled around to conceal something, although I am sure Labour Members would not be confused or misled by that.

In trying to insist that so many of these provisions favourable to the trade unions have statutory backing to ensure that they are enforced, the trade unions may be hoist with their own petard. In order to achieve that aim the Government are setting up almost the same pieces of machinery as existed in the Industrial Relations Act. From the Government's point of view it might have been wiser to have relied on codes of good industrial practice rather than to try to put so much into statutory form.

There are a number of useful measures for employment protection in the Bill, but the whole majesty of the law has now been invoked. We do not think that this is the right time to take that step, nor do we think that the Bill is the right way in which to act. However, I assure the Minister that we shall try to improve the Bill and that we shall be constructive in our discussions in Committee. But I feel that the Bill shows the wrong mentality. It is conservative with a small "c", in its worst possible form. The Bill contains nothing which will increase production or which will create a larger cake for the nation to share. There is nothing in the Bill which will make the rewards of hard work and greater production really worth while. There is nothing to deal with the great problems of job protection or with unemployment. There is nothing to deal with the problems of overmanning or with the problem created by school leavers—a problem which will be particularly severe this summer.

On Saturday the Secretary of State, commenting on the unemployment figures, said:
"I read these figures with horror and with shame. These are figures we have to have before us every day of our political lives. I want to see every instrument available at our command to deal with unemployment here and now."
Perhaps the greatest problem we face is that of overmanning—for example, how to get people out of industries such as the car industry and to put those people into other industries. We must learn how to carry out that process without causing bitterness and loss of dignity that comes from losing one's job. This cannot be done easily, but nor can it be done in the long run by pushing more and more money into an industry so that jobs can be maintained.

Looking back over the years, I believe that we had the same problem with Upper Clyde Shipbuilders. I believe we should then have said "We shall put more money into the setting up of new industries on Upper Clyde and shall train shipyard workers to go into those industries". We should then have gone on to say "We shall take a year or two, we shall go on paying you in your job during that time —but then we want you to move". That is a much more positive way of setting about the matter than by pushing out more money to prop up an old and dying industry or an industry which is suffering from an overmanning problem, as many of our industries are. I do not think we shall solve that problem by backing outdated industries or practices. The same considerations apply to the debate in the House recently when we discussed the Government's proposals for the docks.

I turn to the subject of school leavers. What is the alternative for them this summer? A further year at school kicking their heels because they cannot get a job will not make them into very good citizens. The alternative will be the dole queue or an unsatisfactory job. What are we doing about the situation? Although we are prepared to put £1 million a day into British Leyland, last year on Community Industry, which seeks to train only 1,500 young people, we spent £1·6 million for the whole year from Government resources.

It is not good enough to look at the problems of employment protection on the narrow, conservative lines which the Government have adopted in this Bill. The Government are spending £1 million a day to prop up British Leyland and will spend £100 million as a result of the provisions of this Bill—and yet nobody can say that the Bill will preserve a single job. We shall just make it less easy for the bad employer to sack somebody unnecessarily. The legislation will not create any new jobs, nor will it make the country a fitter or more prosperous place for our citizens.

Because we believe that the Bill is ill-timed and does not attempt to deal with the problems that face our society, we shall vote on our reasoned amendment this evening.

A very large number of hon. Members wish to take part in the debate, and I hope that accordingly hon. Members will be considerate in making their contributions.

4.50 p.m.

I shall not attempt to follow the right hon. Member for Lowestoft (Mr. Prior) in his wide-sweeping remarks about the general employment and industrial situation. Instead, I wish to concentrate on some of the practical details of how the provisions of two clauses of the Bill will affect the ordinary day-to-day affairs of the people whom we are sent here to represent.

I want to give a warm welcome to the Bill, especially to Clauses Nos. 57 and 58, which will give new rights to employees whose employer becomes insolvent. As my hon. Friend the Minister of State has said, under Clause 58(2) it is proposed that payments should be made out of the Redundancy Fund to meet arrears of pay due to employees of a bankrupt firm and also any payments in lieu of notice and holiday pay which are still due to them.

The urgent need for legislative provisions such as these was fully demonstrated to me by an incident which occurred in my consituency as recently as last December and which my hon. Friend the Under-Secretary of State will remember well, as he and I discussed it at that time. He is one of my geographical neighbours, and the incident to which I refer occurred within the Doncaster metropolitan borough at Thorne, a town in my constituency, where there is a light industrial estate in Coulman Street which has been developed through the efforts, over recent years, of local authorities, industrial development agencies and the regional offices of Government Departments.

In the middle of 1973 one of the factories on that estate was occupied by a firm called Humberside Frozen Foods Ltd., a food processing firm, which provided valuable employment for about 40 local people, most of them women. I note that this firm would, therefore, be regarded by the right hon. Member for Lowestoft as a small firm, and in his view the kind of problem which I shall describe is one that should not be tackled by the Bill. However, without any warning at all, on Wednesday 18th December 1974 all the employees of Humberside Frozen Foods Ltd. received summary notices of dismissal. I have one of those notices with me. It is very brief. It reads:
"It is with very great regret that we have to inform you that as from today's date this factory will cease activities owing to circumstances beyond their control. Arrangements have been made with the Social Security, you should report at the Job Centre, Thorne, tomorrow…with all your pay slips at 11 a.m. All assistance possible will be given through this office."
That happened exactly one week before Christmas Day. The 40 employees found themselves completely out of work. They had no pay in lieu of notice; there was no payment of holiday pay due to them; there was no payment of wages which were already outstanding. It had been the practice of the firm to pay wages in the week following the week to which they were related. Therefore, arrears were considerable. The total debts owing to one lady employee were £111·89. That money was cut off from her. Because wages were paid in arrears it was not possible for any employee to claim unemployment benefit for the week following dismissal. Most of the employees, who, as I have said, were married women, found that they had no entitlement to supplementary benefit because their husbands also were, happily, in employment.

However, this blow could not have fallen at a worse time of the year, with all the expenses arising for these families at Christmas time, particularly on presents for the children.

Many of the employees came or wrote to me, and I have here their letters asking for advice and assistance. It was distressing to have to tell them that as the law stood at that stage their only means of redress was to seek repayment of the debts due to them by notifying the liquidator of the firm and seeing that their names were correctly included on the list of creditors. As the first meeting of creditors was not until 14th January 1975 this advice was cold comfort.

I was later informed that the machinery which was owned by Humberside Frozen Foods Ltd. and operated at this factory had been hastily removed overnight from the premises. The premises were rented from, and, thereforefore, owned by, the local authority. There were therefore no assets at the factory for the liquidator to realise. I have not been able to find out exactly who was responsible for that situation, but I condemn the whole manoeuvre as sordid and disgraceful. It left the employees as the completely innocent victims.

If the proposals in Clause 58 are enacted, I am given to understand that the general intention is to meet the difficulties of people who were in the same sort of position as my constituents. There is the danger that the enactment of these provisions may encourage other unscrupulous employers to do this sort of thing, but at least we shall have some protection for employees who find themselves suddenly out of work in these circumstances.

I hope that in his reply my hon. Friend will say a little about how exactly these provisions would have operated in the case to which I have referred.

Clause 58 says that application has to be made to the Secretary of State by the employee. Does this mean that it will be possible for an employee to do this at any office of the Department, and will officers of the Department go out of their way to explain to employees in this sort of situation exactly what their rights are for making application?

I am also a little uncertain as to the exact meaning of Clause 58 (7), which refers to cases
"where a trustee in bankruptcy or liquidator has been or is required to be appointed …".
It also says:
"The Secretary of State shall not entertain any applications for a payment…unless he receives a statement from the trustee in bankruptcy or liquidator …".
I am a little worried that that subsection may lead to some delay before the kind of payments to be made in accordance with the clause may be made to the people who are applying for them.

I hope that when my hon. Friend replies he will be able to show exactly how it is intended that these provisions should operate. I hope that he, as I, will give all possible speed to the Bill so that the kind of situation which I have described in my constituency cannot occur again.

5.0 p.m.

I share the condemnation which the hon. Member for Goole (Dr. Marshall) so graphically outlined, but I am sure that he will forgive me if I do not follow him except to observe that there was a time in his political career when he strongly supported regional government. He has just demonstrated the need for it.

This Bill is peculiarly named—the Employment Protection Bill. No Bill was ever more wrongly named. If the Bill has an effect on employment at all, it will certainly not protect it but is more likely to do the opposite. If the Government wish to protect employment, they must do something about the ridiculous, excessive and highly inflationary wage settlements now being awarded and negotiated I appears that 30 per cent. is the order of the day this year, and I have read that one union leader is talking of claims averaging 50 per cent. next year. My comment on that type of suggestion is "How daft can we get?"

Much of the Bill is designed not to protect employment but to strengthen the hands of the already over-powerful trade union movement. One has only to look at Clause 100 and Schedule 13 to see that. This legislation is not likely to contribute to good industrial relations, and in many circumstances it may sour them.

The right hon. Member for Lowestoft (Mr. Prior) referred to the introduction of law into industrial relations as a consequence of the Bill. At that point in his speech, as indeed at others, I was saying "Hear, hear". I remember over the last 12 months some of the bitter crticisms by the Minister of State of the 1971 Industrial Relations Act. I remember his harsh and grossly unfair criticisms of the judiciary and his expressed hatred, almost to the point of eccentricity, of judges interfering or being involved in industrial relations. But Schedules 1 and 5 do exactly what he criticised. That is hypocrisy. It would serve the Government right if the judges, refused to serve in this instance. If they are called upon, as they are under the Bill, to serve in industrial relations matters and to arbitrate, I hope that on this occasion they may expect the support rather than the venom of some Ministers.

We need to get industrial relations on a firm, fair and proper footing. This implies worker participation. but I would stress as I have done many times before that there is a great difference between worker participation and union participation. The sooner the Government understand that they are not the same thing and reflect that understanding in legislation the better chance we shall have of getting industrial relations on a proper footing.

To do this, co-operation is required from management as well as from unions. To introduce, especially at this time, a Bill which is so one-sided, which gives help only to the unions, without any employer rights or protection, is ludicrous stupid, provocative and, it I may use the word again, daft.

Many employers, especially small firms, will soon have to consider appointing someone to ensure that they do not break the law. This is not a flippant remark; I speak as someone who employs 70 people. We are being inundated with so much legislation that small firms cannot cope. It is all right for companies with 200 or 300 employees, who have accountants and legal advisers, and I am not arguing that small companies should not have to comply with the law. But we should surely be able to absorb one new Act before another drops on our desks. We are required at times, to put up notices saying what our policy is, on health, and safety for example, to be followed by another the very next month.

We are reaching the stage at which we are frightened that unless we have a legal adviser we shall be sued for breaking the law when we had not known that we had broken it. This is the worry of small companies—not that they are opposed to the legislation or object to having to comply with the rules like employers who employ large numbers. They object simply to the speed and complexity of the process. I hope that the Government will understand that this is a real problem for employers with small numbers of employees—a phrase that I prefer to "small employers".

The Liberal Party believes that people should be given time off for public service as provided in Clause 53. I doubt whether that is so much of a problem as to require legislation, and I should like some convincing when it comes to my own part of the world. There is no shortage of Labour candidates in my constituency or in adjoining constituencies. However, if the Government can convince us of the need, we shall not oppose the clause. We simply question this provision on the ground that we should not legislate unnecessarily.

Of course we welcome the provisions for proper payments for periods of pregnancy and maternity, but we are entitled to ask whether this is the responsibility of the employer or of the State. What do married women in industry pay their insurance stamps for? What does the employer pay his proportion for? While I and my party welcome the idea of women being entitled to proper pregnancy leave and certainly to proper payment for the period of maternity, we question whether this should be the financial responsibility of the employers rather than the State. Clause 44 is, therefore, fraught with difficulties for employers, although on balance I commend it and I realise that it can be considered in Committee.

I have every sympathy with Clause 22, relating to guarantee payments in the event of lay-offs, but I should have more sympathy with it if I were satisfied that the Government intended to assist the textile industry. In its present circumstances, that industry must be particularly vulnerable under the clause. If people are prevented from working through no fault of their own, simply because the work is not available, they should be paid for the period when they cannot work, but we are entitled to ask whether, if the reason for the lack of work is Government action rather than the action of particular employers, the payments should not be the responsibility of the State.

If the Bill is given a Second Reading, we shall seek to press many amendments in Committee. We shall want to examine Clause 17 on the disclosure of information. I entirely accept, as did the right hon. Member for Lowestoft that on immediate reading the clause appears to be all right.

I should welcome a clause being introduced by the Government to cover House of Commons staff, because some of the orders and some of the rules which I see being applied here to staff as to Members of Parliament are Victorian in their concept. I am not surprised that the rules were drawn up in the time of Tchaikovsky's 1812 Overture.

My main criticism of the Bill is not merely for what it does but for what it fails to do. It offers little protection for the lower paid in that it fails to introduce a statutory minimum wage. I listened carefully to what the Minister of State said in introducing the Bill. I take his point. Tomorrow I shall read what he said more closely in Hansard. It may be that when we reach Committee I shall have to temper my judgment.

As I read the Bill, there is a disgraceful omission. The Government have not included any provision for a statutory minimum wage. The onus is still on people to establish a case rather than their being told "You are entitled by law to, say, two thirds of the national average wage."

It is disgraceful that a Government who try to kid people that they are concerned about the lower paid cannot do something about introducing a statutory minimum wage. By continuing to ensure a free collective bargaining system without a statutory minimum wage one supports the strong and deserts the weak. In our present inflationary system, the strong survive and the weak get weaker.

I understand that the Secretary of State has had correspondence with the Low Pay Unit about the possible introduction of a statutory minimum wage. We are entitled to ask the Under-Secretary to refer to the correspondence. I understand that the Secretary of State promised that problems such as those connected with home workers would be alleviated in the Bill and that he talked about the possibility of a statutory minimum wage, but ultimately had to reject it because the Government wanted to retain free collective bargaining and a statutory minimum wage would preclude that. As regards the problem of home workers, we are entitled to ask what happened to the promise the Secretary of State made to the Low Pay Unit.

The Minister of State agreed that the Bill is yet another instalment of the price that the Government have agreed to pay for what he calls "the social contract" but what I have heard referred to as "the social con-trick".

A contract implies a bargain between two sides, not one side alone. As the trade unions, or at any rate some of them, have manifestly not delivered their half of the contract, in that there have been excessive wage claims and wage increases have been negotiated more than once in a period of 12 months—the Minister of State said that there had been some wage settlements which he deprecated as going outside the social contract—we suggest that the House should decline to give a Second Reading to the Bill until the unions make their sessionary instalment and prove that they are prepared to meet their side of the social contract.

The Bill is like a curate's egg. In parts it is good. In others it is hopelessly misconceived. We have reached a stage in our social history where we need to consider where we are going as a nation. In industrial relations we need to unite the nation rather than divide it. Employers with small businesses, the self-employed, small shopkeepers and people like them are getting rather tired of being pushed around by successive legislation. The Bill is one more nail in the coffin. It is geared to increase the powers not of workers but of trade unions.

Because the Bill does nothing to help the weak, the lower paid and home workers, because it shifts the proper financial responsibility of the State on to the improper responsibility of the employer, because of its timing in relation to the national economy, this evening my colleagues and I will, because our own amendment has not been called—we do not question Mr. Speaker's right in that regard—either be supporting the official Opposition amendment or, alternatively, forcing a Division against the Second Reading of the Bill itself. I suspect that we shall choose to support the official Opposition amendment merely in order to save having two votes.

If none the less the House should approve the Bill, the House can rest assured that in Committee and on Report we shall be seeking to amend the Bill so that it will be a better Bill. We shall seek to ensure that it helps people rather than unions, that it makes a positive contribution to good industrial relations, and that it becomes what it certainly is not now—a Bill concerned with employee protection in those areas where protection is necessary, and that it concerns itself less with party dogma and far more with making a positive contribution to gettting the country back on its feet.

5.17 p.m.

Unlike the hon. Member for Rochdale (Mr. Smith), I wholeheartedly welcome the Bill. It is one of the most important pieces of legislation the House has considered for many years. It will be welcomed not only by the vast majority of the trade union movement but also by many of the most progressive employers. Many progressive employers have conceded more than the Bill sets out to secure for employees.

I declare my interest in the Bill. Like my hon. Friend the Minister of State, I am a sponsored member of the Amalgamated Union of Engineering Workers, and until February last year I was an hourly-paid shipyard worker on Tyneside. I was for many years a shop steward. Together with many of my colleagues in the trade union movement I fought hard for years to establish in our industry some of the things which the Bill sets out to secure.

It is incredible that in 1975 in this democratic country we are legislating for such fundamental things as the right to belong to a trade union and the right of a trade union to represent the interests of workers about their wages and their conditions of work at their place of work. It is nonsense to suggest that this will bankrupt industry. We seek to bring democrary into the work place.

It is of equal importance that we have the next Bill, to which my hon. Friend the Minister of State referred.

The Bill honours another pledge of the Labour Government. We said in our manifesto that we would repeal the Industrial Relations Act, which was responsible for so much of the bitterness and hatred which were engendered in industry under the last Tory Government. We repealed that Act. We did not often have the support of the hon. Member for Rochdale at that time, so we are not surprised that he will not be supporting the Bill tonight.

I am rather intrigued by that statement, and I should be glad if the hon. Gentleman could substantiate it. Throughout the election my party indicated that we would support the repeal of the Act. We voted at all stages for the repeal of the Act. What we did not do was support some of the amendments submitted by hon. Members opposite—not amendments to the Act which they were seeking to repeal but amendments to the position which existed prior to the introduction of the Act, such as, for example, on closed shops.

On the few occasions when the hon. Member was present in Committee he often voted against the Government and supported amendments which the official Opposition put forward. if he doubts my word, let him read the Official Report. It i, there for all to see.

I should like to comment on one or two issues arising from this Bill. The first one, and probably the most important, is the setting up on a statutory basis of the Advisory. Conciliation and Arbitration Service. Anyone who has ever had any responsibility on the shop floor for negotiating on behalf of his fellow workers learns very quickly that one thing that one must do is to settle disputes between employer and worker before they reach the stage of a strike, because it is when a dispute reaches the strike stage that the bitterness, anger and hatred creep in.

One thing that we have learned over the years, and certainly prior to the Industrial Relations Act, is that the trade union movement welcomed the arbitration service of the old Ministry of Labour. It is essential that we get the ACAS on to a firm basis, and I hope that there will be a wide expansion of this service. I know that the trade union movement will welcome it. I also hope that the employers will accept the words of the right hon. Member for Lowestoft (Mr. Prior) and that they also will support the ACAS. It is essential that we create a new feeling within industry about industrial relations. This Bill will not only protect jobs. If we can get that spirit of co-operation and conciliation which is so essential in industry, we shall promote employment. To achieve this, it is essential that both sides of industry work together with the ACAS.

The Bill refers to a guarantee payment to the employee, and I confess that I feel this does not go far enough. The principle is sound, and many firms have already agreed to some such arrangement. But I ask the Minister to give some consideration to the £6 a day clause. I ask him to withdraw the word "maximum" and to substitute "minimum". I ask him to bear in, mind the TUC policy of a £30 a week minimum wage. I also ask him to bear in mind that many employers have long ago conceded much higher payments than £6 a day. I suggest, therefore, that the word "minimum" is preferable in this context.

The other aspect of the Bill to which I wish to draw attention is the question of time off for those who wish to participate in local government and trade union business. I used to be an hourly-paid worker, and I served the local authority and my trade union. I suggest to the hon. Member for Rochdale that it is essential that statutory provision be made in this respect. More and more hourly paid workers find it increasingly difficult to serve on local authorities and public bodies, and this applies particularly to the Labour Party because it has the greatest number of hourly-paid workers in its ranks.

My only criticism is that the Bill is rather woolly in this respect. Clause 53(4) states:
"The amount of time off which an employee is to be permitted to take under this section …"
in that which is
"reasonable in all the circumstances having regard, in particular, to …
(c) the circumstances of the employer's business and the effect of the employee's absence on the running of that business."
With respect to the Minister of State, I say that a couple of buses can be driven through that provision. I suggest that we should insert a stated number of days, as is already done by many local authorities which have employees who serve on other bodies. That would be fairer than leaving this provision which could mean that an employer could say to somebody wishing to serve on a local authority or hospital board "I am sorry; I cannot allow you any time off work because of the effect it will have on my business.'

The clause on picketing is not good enough. We must tackle the whole question of the legal rights of pickets. We must accept that in an industrial country there must be pickets in industrial disputes when passions run high and tempers are roused. I ask the Minister to look again at the question of obstructing the highway. A picket must have the right to stop a lorry and put his views to the lorry driver peaceably. He cannot put his views to the lorry driver when the vehicles is going past at 30 miles per hour.

Does the hon. Gentleman mean that the picket should have the right to stop a lorry driver even if the lorry driver does not want to stop and does not want to listen to the picket?

Bearing in mind that the pickets will be at the factory gate, unless the employer goes along with blacklegging intentions and opens the gate so that the lorry can be driven it, it will not be too difficult for the driver to stop the lorry.

I am saying, yes, the picket must have the right to stop the lorry. He must have the right to put to the lorry driver his point of view about the cause of the dispute.

I ask my hon. Friend to consider this point. As we are speaking in terms of obstructing the highway, would this apply to a man on a bicycle who is attempting to drive to work and is blacklegging? Hon. Members opposite who have little knowledge of strikes may not know what is meant by the terms "blackleg" and "scab". To a man who works 40 or 45 hours a week those terms are very emotive, and a man who attempts to break a strike is rightly termed a blackleg and a scab. We must get this issue clear in the Bill. We should define what we mean by the word "picketing". I accept that we still have not correctly defined the law on picketing, and I should like that law to be clearly defined.

Most Governments have attempted to pass some form of legislation on industrial relations. The major mistake that most Governments have made is that they have not consulted, nor have they taken into account the feelings and the views of, workers with respect to whom they were seeking to pass legislation. This Bill does not make that mistake. We have taken cognizance of the views, the feelings and the fears of workers in industry.

I do not believe that this Bill is a gigantic step forward in industrial relations. The most important aspect of the Bill is that for the first time Parliament has got on to the right road concerning industrial relations. Politicians may find themselves in league with the men and women who work for a living. I hope so. The Bill has been sub-titled "In Place of Strike ". I think that is the best title for this Bill, which will go a long way towards bringing peace to industry—the peace that this country so desperately needs.

5.30 p.m.

As I am unable to share the euphoric approach to the Bill expressed by the hon. Member for Newton (Mr. Evans), it will probably save the time of the House if I do not take up each of his points in detail before coming to my own observations, though I shall deal with some of his remarks as I go along.

During the past 12 months the Government have presented a series of Bills with beguiling and totally misleading titles designed collectively to concentrate all power in the hands of the few while progressively destroying the enterprise of the many. All such legislation, whether it be the Trade Union and Labour Relations Act, as amended, the Industry Bill, the Community Land Bill, to come up for Second Reading tomorrow, or the present Employment Protection Bill, contains a sprinkling of "goodies"—I have in mind here what is referred to in the Opposition amendment as giving legislative effect to good industrial relations practice—but the "goodies" are intended to distract attention from the long-term objective of replacing our free collective bargaining system with a system which one can only describe as industrial totalitarianism.

The Bill purports to be an Employment Protection Bill, but it will contribute, as the hon. Member for Rochdale (Mr. Smith) said, not to an increase in employment but to an increase in unemployment by adding directly to the costs of many small businesses already reeling under the burdens of excessive taxation, high rates and heavy social security payments. In spite of the expressed concern of the Minister of State, every new impost puts further at risk the livelihood of a quarter of our working population currently employed in small businesses.

The proposals in Clauses 51 to 53 to give employees a legal right to time off for a wide variety of activities at the employer's expense will add considerably to unit costs, while the provisions in Clauses 22 to 29 for a mandatory guaranteed week will be a great stimulus to employers in some of the more seasonal industries to reduce their overall labour force rather than incur the high expense of periodic temporary lay-offs. As my right hon. Friend the Member for Lowestoft (Mr. Prior) pointed out, the right to maternity leave will lead to employment difficulties for women.

Thus, far from being a Bill for the protection of employment, it will create some unemployment. It will, of course, protect the employment of trade union officials by the provisions made for trade union recognition in Clauses II and 12, the guarantee of time off for union activities at the employer's expense in Clauses 51 and 52, and the strong statutory prejudice in favour of trade union membership in Clauses 47 to 50. As an alternative to my right hon. Friend's suggestion, I suggest that we call the Bill the Trade Union Officials Employment Protection Bill.

The confidence trick is not confined to the Short Title. In the Long Title it is claimed that the Bill will establish machinery for promoting the improvement of industrial relations. In fact, it will in parts restrict and confine, and ultimately destroy, free collective bargaining over a wide area. Many of the provisions are divisive and will create new tensions in industry.

Here is but one example. The provision in Clause 11 for any independent trade union to be able to apply to the Advisory, Conciliation and Arbitration Service for recognition, which the service may then make mandatory on the employer, is a negation of the collective bargaining räle. It requires no account to be taken of existing arrangements, perhaps with other trade unions, or of the wishes of the majority of employees. It leave the union free to accept or reject the recommendation but imposes it on the employer without the option and without right of appeal. It opens the door to a growing multiplicity of small unions and increases the hazard of inter-union dispute. It has been described as an open invitation to minority interests to create industrial disruption, and I agree with that assessment.

Did the hon. Gentleman ever read the Industrial Relations Act?

I am glad the hon. Gentleman raises that point. I find a distinct difference where there is a procedure which is used as a last resort for arbitration by a tribunal, where both sides may state the case fully and where, at the end of the day, if either side does not like the decision it may appeal to the High Court. There is no such appeal system in the procedure proposed here.

Good industrial relations depend above all on mutual understanding between the two sides meeting as equals in the free collective bargaining procedures. They cannot bloom in a climate of State compulsion. Neither can they prosper when one side is handed all the rights, all the privileges, all the patronage and all the power, while the other side is clobbered with all the responsibility, has none of the rights and has only the manoeuvrability of a tram.

Not all the Long Title is misleading. In places it admits more openly to its purpose of concentrating power in the hands of the few in so many aspects. For example, it refers to the transfer of the exercise of licensing functions under the Employment Agencies Act 1973 from local authorities to Whitehall. It refers to the proposal to amend the Health and Safety at Work Act 1974 as regards the appointment of safety representatives. The Under-Secretary of State will not have expected me to overlook that.

This last amendment makes a mockery of the whole concept of elected safety representatives and calls in question the Government's sincerity in their much publicised efforts to improve industrial safety, for there can be no safety reason for deleting from the Health and Safety at Work Act provision for the election by employees of safety representatives from among the employees. How does that improve safety? Certainly, it has nothing to do with the protection of employment. What is more, it removes what could be a fruitful area of consultation between employees and management, so it does not even help to improve industrial relations either.

The purpose of this apparent piece of folly is made clear not in Schedule 13, in which the amendment occurs, but in Clause 103, which refers directly to it. It is to restrict the appointment of safety representatives to those appointed by the officials of the big trade unions—in other words, again to concentrate all the power and patronage in the hands of the militant few.

The Bill is indicative of the muddled thinking of the Government, a Government who have failed to keep pace with the realities of the development of industrial relations techniques over the past 20 years. Full employment is not protected by putting shackles on management and giving power and privilege to those who carry no responsibility for the success of the enterprise. Full employment is protected and maintained by good commercial and industrial management, stimulated by the profit motive and backed by rising levels of investment.

Economic growth is the basis of prosperity, and it is on prosperity that the protection of employment depends. The Bill contributes nothing to either economic growth or national prosperity.

As regards improvements in industrial relations, these depend on the good will of both sides of industry, and on both sides, too, understanding their identity of interest. Both sides need patience, understanding and tolerance. The Bill is divisive and contributes nothing either to the needs of industrial relations or to the protection of full employment.

I hope that my right hon. and hon. Friends on the Opposition Front Bench will be in no doubt that on this occasion they and I are marching in step, and I shall certainly support their opposition to the Bill.

5.38 p.m.

In my opinion, the Bill should hold no fears for companies which work at their industrial relations. Unfortunately, even after a decade of parliamentary involvement in industrial relations matters, far too many firms do not give this subject proper consideration or the proper status which it should have in management structures.

Firms which are successful in industrial relations often have the personnel function represented at director and board room level, but there are too many British companies which still treat the personnel function, the industrial relations function, as a sort of industrial paternalism—I am reminded here of what was said by the right hon. Member for Lowestoft (Mr. Prior) opening for the Opposition—reminiscent of the "happy chappy" company in which people do not talk about wages and conditions so long as they get a bottle of sherry at Christmas. Equally, there is the company in which the personnel or industrial relations function is a place to ease out some fading management star—" He is no good at finance or manufacturing any more, so shove him into personnel. He cannot do much harm there, and we shall always be over him anyway." If half the thought that went into sales, marketing and accountancy was put into industrial relations before companies took actions many of which cause unrest, a positive step forward would be taken.

Two weeks ago I attended the annual luncheon of a local employer's association, and I sat beside the managing director of a large multinational engineering company. He spoke to me about problems that were current in his particular activities and described how he had to get together with his co-directors to discuss them. He was amazed that his directors, when challenged with a question, were so confined to their specific functions. The marketing man could only speak about marketing, the sales man could deal only with sales and the finance man was restricted to his sphere. But, he told me, a decision was taken and he then went to see the chaps on the shop floor. I asked him where the personnel man was, the man who could tell him what the reaction from the shop floor would be. I asked whether he was involved in the decision-making process. He told me that he was not; he came under the manufacturing director or perhaps it was the works manager who was responsible to the manufacturing director.

During the course of the lunch the Chairman of the National Coal Board, Sir Derek Ezra, addressed us for about 20 minutes and spoke for five minutes about industrial relations problems, and a very good speech it was. The reply to that speech was made by the Chairman of the Employers' Association, who reversed Sir Derek Ezra's priorities and spoke about the problems of the nation and the economy. He spent five minutes thanking Sir Derek and 15 minutes slamming trade unionists, the Labour Party in general, the Government and industrial relations in particular. I went over afterwards to speak to my managing director friend, and I said how marvellous it was that all the problems of the country were not centred around accountancy, finance, sales or marketing, but were about industrial relations. Yet the man who makes the decisions, the man who helps to try to formulate policy on industrial relations, could not even get into the boardroom or have his point of view made known before the decisions were taken. The managing director accepted my point, but he did not say what action would follow.

It is no good using industrial relations for fine "blood and thunder" after-dinner speeches and then going back to the company and using the same age-old procedures, the same age-old management structures, and making no attempt to implement modern structures, modern procedures, or to overhaul the systems to meet modern industrial relations pressures. It is no good ignoring the treatment, because if industry carries on in that fashion it may create gastronomic ulcers at the after-dinner speeches but it will certainly create industrial ulcers, as is now being proved. All those who mean business and have accepted the problems caused by industrial relations are overhauling their procedures and meeting the demand, and I congratulate them. For such people who take labour relations seriously the Bill holds no problems.

I wish to deal with the question of the wages councils. I declare an interest in being a member of the General and Municipal Workers' Union. My union, more than most, is involved with wages councils and is negotiating with the problems surrounding them. Those problems are generally related to industries which contain the lowest-wage earners in the country, and they create very great difficulty.

The proposals on the wages councils as contained in Clauses 79 to 84 are on the whole most welcome. They represent the first major improvement in wages council machinery and scope for half a century. This may well be the significant breakthrough in the eventual elimination of scandalously low-paid workers in whole sections of industry.

One reason for the laggardly progress in the wages council sector has been the long gaps between settlements. Proposals in Schedule 6 and Clause 79 to speed up the procedure by asking the Secretary of State to sanction orders is a major step in the right direction. In the past the lengthy, cumbersome procedure of wages councils has held up awards in many instances by 15 months or more with the delay between the application being made and the order being issued to notify the increase. The wages council sectors have fallen increasingly behind the increases in pay in the regular round of increases in the collective bargaining sector.

Another inhibition has been the lack of bonus schemes and plus payments in the wages council sector. The widening of the scope of the councils as contained in Schedule 6 also refers to these differences between the wages council sector and negotiated areas. Orders under the new legislation specify all terms and conditions, not just the basic wages, hours and holidays, and will enable the wages councils to close the earnings gap which has arisen between these industries. I share some of the feeling and some of the disappointment expressed by the hon. Member for Rochdale (Mr. Smith) that there has been no defined minimum wage, but this kind of legislation will help to put up the unofficial minimum wage which already exists.

Little will happen automatically without the organisation and development of bargaining and trade union membership in these areas. The interim stage between wages councils and free collective bargaining is now established by the statutory joint industrial councils in Clause 80 and 81. These follow very closely the proposals put to the Department by the employee-representative groups. However, the proposals and the functions specified do not go far enough. First, the SJICs should have powers to negotiate terms and conditions which are not statutorily enforceable like wages council orders. This will enable an agreement to be reached on an SJIC on a wider range of matters than before, but with the force of an ordinary collective agreement rather than a statutory imposition. I believe that this will make agreement easier and will ease the way to the translation of the SJICs into entirely voluntary collective bargaining bodies.

Secondly, the SJICs should have specifically as one of their functions the encouragement of voluntarly collective bargaining, and on establishment should have a limited life of three to five years extendable by the Secretary of State if he can see that the progress towards voluntary collective bargaining is not proceeding sufficiently well. The SJICs should also have the duty to report annually on their progress.

Thirdly, in those sectors where organisation and the development of voluntary collective bargaining is difficult and a long way off the penalties for ignoring wages council orders, or the SJIC orders, should be higher than at present. The maximum fine of £400 is insufficient. At least the persistent offender should be subject to higher penalties. More important, however, is the policing of the system and the imposition of penalties. In the short term the wages council inspectorate needs to be strengthened and the number of prosecutions should be increased. In 1972, the latest year for which I have figures, 11,000 substantive cases of breach of pay or holiday orders were established, yet only one case was brought. This is ludicrous.

In those areas where we still need statutory controls to avoid exploitation the means of enforcement must be effective and credible. In this area the legislation should explicitly provide for wages councils to cover, or be established to cover and make orders to cover, home-workers or outworkers. These are two of the most exploited groups in industry at the present time.

For the reasons that I have outlined I believe that there is nothing in the Bill to fear. If both sides of industry give it their concerted support and back the ideals embodied in the Bill, I am sure that it will come to be regarded as the foundation of good, forward-looking industrial relations.

5.50 p.m.

Every hon. Member is deeply concerned about the present employment position. As an employer, I suggest that if current rates of inflation are maintained, the outlook is potentially catastrophic. I believe that we all wish to look carefully at a Bill that promises any improvement in the employment situation. I have looked carefully at this, and I have found it wanting in its strategy, timing and much of its emphasis.

Clearly, the Bill seeks to protect employment by giving greater powers to trades unions. We are all aware of areas where the power of trades unions is too great, too great for their own good. One of the most dispiriting features of the Government's attitude to the social contract is that they continually give, give, give without showing that anything is obtained in return.

The Government have an important position as umpire. When society has a body that is too strong for the constitution, as some trades unions now are, it is necessary for the Government to act as a check, or even as a balance, and not to give added emphasis to that monopoly, which is what the Government are now doing. Otherwise the result will be that trades unionists will price themselves out of the market, as they are now clearly doing on the railways, in the Post Office and soon, I am afraid, in the steel and motor car industries. None of us wants that, but it will happen if the Government do not have the guts to stand up and resist.

We all wish to protect employment, and to do that we have to engender a totally new attitude. It must be understood that to keep a job men must be prepared to change it. I had thought that the Minister would say more than he did about retraining and monitoring obsolescence through the "little Neddies".

I should like to refer to manpower strategy. People feel it to be a stigma if they lose a job, but there should be a recognition that they are doing what society wants and they should be enabled to move house more easily and to transfer mortgages and pensions, and so on. Those are difficult problems, but they are the way to improve job prospects for everybody.

Unfortunately, far too much union thinking is still directed to maintaining the status quo. In the light of union history, that is understandable. But is it not suicidal for the Ford workers to be working more slowly than they can do in order to protect their jobs? Clearly, they will lose and the nation will lose.

It now seems to be axiomatic that nobody in the public sector should lose his job. The Bill seems to seek to extend that principle to the private sector. We must have greater mobility of labour, and to the extent that the Bill prevents that mobility it is not in the national interest. I would go so far as to say that labour hoarding in the nationalised industries, particularly over the past 10 years, has played a major part in investment failure, because far too often industries have found bottlenecks caused by the lack of skilled labour, or even of people to train.

My second criticism of the Bill is that its timing is wrong. It will plainly place upon industry burdens, burdens disproportionate between a company that employs many women and a company that does not, between a small company and a large company. I hope that the Government will assure us that increases in costs resulting from the Bill will be treated as allowable by the Price Commission. If they are, is this the right time to borrow money from companies and hand it back? Are we justified in transferring these charges from the State to the employer?

In my constituency one of the largest companies is having to cut the number of people it employs because of the operations of the Price Commission. I would guess that as a general rule the result of the work of the Price Commission is to reduce the number of jobs by between 5 and 10 per cent., and it would be interesting to have the Government's assessment.

We all know that inflation of 20 or 30 per cent. makes company forward planning impossible. This is at the heart of the terrifying prospect for unemployment. We all know that shareholders are being penalised. Of the income available to all companies, 6 per cent. goes to shareholders. This is at a time when one union is said to be claiming 50 per cent. If everything received by the shareholders went to salaries and wages, wages and salaries would be increased by only 6 per cent.

When there are wage claims of 50 per cent., is it surprising that there is not the money we want coming forward for productive enterprises? What is the effect on morale in industry of the activities of the Secretary of State for Industry, who is undermining the whole basis of industrial discipline by refusing to allow the forces of the market to work?

We all know that management is snowed under with legislation. This will be another measure on top of the two, three, four, five or six measures already on the desks of managers at a time when they are deeply worried about their ability to keep their companies going in the market place. The Government must give some thought to the effect of this legislation on managerial ability to run companies and to provide the necessary leadership.

There is one subject that has not been mentioned, but it is desperately important. If the market is not allowed to operate, the moderate and sensible trade union leader cannot get across to his membership the facts of his long-term interests. We are all familiar with the shop steward who says "I knew that 16 per cent. was the right figure, but the lads would not have it. They told me to come back and get 30 per cent." So research is cut and so investment is cut.

Is the hon. Member aware that the British worker is now among the lowest paid in Europe and is the cheapest labour in Europe? Is he suggesting that labour should be even cheaper and that wages should be even lower?

No, I am not suggesting that at all. I am saying that if wages exceed productivity there will be fewer jobs. We all want greater productivity and larger wages, but they must be related.

I shall come to agriculture in a moment.

My third criticism concerns emphasis. Clearly the Bill is biased. The hon. Member for Newton (Mr. Evans) spoke of management co-operation. Does he think that the right way to get management co-operation is to produce a Bill that is totally one-sided? I do not need to spell out the evidence of this bias.

My right hon. Friend the Member for Lowestoft (Mr. Prior) mentioned the composition of ACAS. It cannot be effective if it is biased. Clearly, there will be member companies in the CBI which, if they see codes of practice emanating from the ACAS that are totally one-sided, will want to withdraw, just as the trade unions objected to the Conservative Industrial Relations Act 1971.

It is reasonable to ask: why cannot employers refer inter-union disputes? Why should not union members be protected from union abuse? Contrast the situation of the man who is unfairly dismissed from a company and the man unfairly expelled from a trade union. If he is unfairly dismissed from his company his pay is preserved. He appears before a court and has judgment delivered to him. The Press can be present and he has a fair hearing which is obvious to all.

If he is unfairly expelled from his trade union he may not be able to get a job. His income is not protected. He has to wait for union procedures to be exhausted and then he has to wait for judgment through the union machinery. There is no Press access and no written judgment. That seems to be something upon which the Minister might reflect.

Sooner or later if free institutions are to survive the unions will have to accept settlements by arbitration and not by strikes. What would have happened if the miners had bankrupted Leyland? How long would it be before the national interest was admitted?

I turn to the problem of small businesses.

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