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Orders Of The Day

Volume 897: debated on Saturday 16 August 1975

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Sex Discrimination Bill

Lords amendments considered.

Clause 4

Discrimination By Way Of Victimisation

Lords amendment: No. 1, in page 2, line 32, after first "person" insert" (the discriminator)"

4.18 p.m.

I beg to move, That this House doth agree with the Lords in the said amendment.

I understand that it is convenient, with this amendment, to consider the following Lords amendments:

No. 2, in line 38, leave out "him "and insert
"the discriminator or any other person"
No. 3, in line 41, leave out "him" and insert
"the discriminator or any other person"
No. 4, in line 44, leave out "him" and insert
"the discriminator or any other person"
No. 5, in page 3, line 1, leave out "him" and insert
"the discriminator or any other person"
No. 6, in line 5, leave out "he" and insert "the discriminator".

These amendments are the result of the consideration which the Government undertook to give to points made on Report in this House by my hon. Friend the Member for Barking (Miss Richardson) about the scope of the definition of "victimisation". As Clause 4 stood, a person, X, victimised another person, Y, where he treated Y less favourably than other persons on the ground that Y had done any of the things specified in subsection (2); for example, instituted proceedings under the Act against him. However, the clause did not define as victimisation the less favourable treatment of Y by X on the ground that Y had done any of the things specified in subsection (2) against a third person, Z. The amendments to Clause 4 secure that the definition of "victimisation" is extended to cover such a situation.

I suppose that at this stage of the Bill it is rather hopeless to oppose these amendments, but I think some words should be said against them because these things tend to slip through, particularly in the later stages of a Bill, without their significance being considered by the House. One feels grateful that the alphabet ends with Z, otherwise this sort of thing could go on and on in ever-increasing circles.

The amendments strike at someone who treats less favourably, in employment for example, a person on the grounds that he has done or intends to do anything by reference to this Bill in relation to that first person. The "anything" that is done by reference to this Bill does not refer to proceedings under the Bill, to giving evidence or information under the Bill or to allegations of a contravention of the Bill. One could understand all that, whatever one thoughth of it, but that is not referred to. That is all dealt with under Clause 4(i)(a), (b) and (d).

The "anything" must be the holding or expressing of disagreeable opinions about this measure. There is nothing else it can be, and that is the significance of this extension of the clause. It does not just mean the person who is guilty of the conduct, if I may be allowed to use that expression; it is now widened from X and Y to Z. In the comparable provisions of Clause 13(2), it is laid down in the most explicit terms that where an authority or body is required to take into account or assess the character of a person for the purposes of employment, then the fact that someone disagrees with this Bill is to be evidence of bad character. Somebody who says to another: "You are the sort of person who agrees with this Bill. I do not think I like you" will be guilty of discrimination under the Bill. This is a dangerous path on which to tread. The expression of opinion about the policy of an Act will be treated as evidence of a bad character, and a person who, like me, thinks this measure is bad and wrong in principle will be struck at by the extension proposed in the amendment.

I realise that I speak in vain. Even if I spoke with the tongues of men and of angels, there is hardly anyone here to listen, so I could not persuade them, but before this Bill becomes an Act it is right that one voice should be raised to point to the dangers in the way the law is increasingly being used to stigmatise and, in a sense, outlaw the expression of certain opinions about matters of controversy.

Question put and agreed to.

Subsequent Lords amendments agreed to.

Clause 7

Exception Where Sex Is A Genuine Occupational Qualification

Lords amendment: No. 7, in page 5, line 6, leave out from "for" to "different" in line 7 and insert:

"a man for reasons of physiology (excluding physical strength or stamina) or, in dramatic performances or other entertainment, for reasons of authenticity, so that the essential nature of the job would be materially".

I beg to move, That this House doth agree with the Lords in the said amendment.

This amendment is a rewording of the first genuine occupational qualification criterion, and is an attempt to meet some of the criticisms made at an earlier stage. Some people thought that preconceptions about a woman's rôle would cloud the interpretation of our intentions. We do not think the amended wording differs significantly in effect from the wording as it left this House, but it has the additional merit that it makes the intention rather clearer.

Once again I feel it necessary to say some words of dissent on this proposal. The wording that is being replaced was inevitably and naturally the subject of some fairly astringent comment in the earlier stages of the Bill and I do not consider that any improvement has been made. On the contrary, the faults of the Bill are brought into focus rather more sharply by the proposed change.

The extraordinary words "excluding physical strength or stamina" in the amendment underline the absurdity of this Bill. I heard the hon. Member for Isle of Ely (Mr. Freud) mention physiognomy at one point. As I understand it, physiognomy might get past as a necessary characteristic, particularly if one wanted a character with a beard. At least we have got away from the attitude of a former Home Secretary who said that, if necessary, a woman could have a beard stuck on in order to avoid discrimination. If there is one thing which validly differentiates men and women it is physical strength and stamina, yet they are expressly excluded.

I choose this amendment for an intervention at this late stage because in it is distilled, in the purest form, the phrenetic absurdity which underlies the whole Bill. To me it is sad to see the House of Commons lending its grave attention to proposals which spring from nothing better than a shrill and peevish militancy of a sectional lobby. The Bill, of course, will not work. No one thinks that it will. It is offensive and objectionable in principle.

4.30 p.m.

I can give two illustrations on the question whether it will work. One of them I raised on Report, and it concerns the police. I asked how, if physical strength and stamina were excluded, it would be possible to ensure a police force which could deal with disorder in the streets, with holding back crowds and with all those occasions where physical strength of relatively young men is regularly engaged. I raised this point in the hope of getting an answer, and in the end I was told that somehow or other the police would make sure that they got an adequate number of men, as distinct from women. That can mean only that this kind of thing is to be a broad principle in the Bill but that in practice it will be winked at where convenient. The Forces are excluded, and they have to be. The police should be excluded, but they are not, and so these things will be done in a covert way.

I saw in the daily Press that the fire service is worried over securing the proper recruitment of men. The Chief Fire Officer of East Sussex has said that the fire service should be excluded from the Bill. I wonder, if physical strength and stamina are not to be matters of differentiation, how it is proposed to get an adequate number of male firemen without discriminating on the ground of sex.

My hon. and learned Friend is raising an important point, and I hope that the Minister will be able to reassure us about it. I hope that my hon. and learned Friend is not right in saying that physical strength and stamina may no longer be grounds for discrimination. It may be that one would want to choose a woman precisely because she was strong and had more stamina, but it is important that we should be reassured that my hon. and learned Friend is not right and that we are not disallowing the factor of physical strength and stamina as a basis for discrimination.

The Lords amendment in the new phrasing of the exemption, which before referred to authentic male characteristics, now uses a form of words which speaks of

"physiology (excluding physical strength or stamina").
That explicit and express exception must mean something, and I should be very glad to know what it means. When I raised this question on Report in relation to the police I was told that somehow the police would manage to get the number of men, as distinct from women, that they wanted. I suppose that the fire service will also—by breaking the law—recruit the number of men it wants.

I can imagine that the Minister will give us a wildly impractical answer. He will probably say that it is necessary to have a mainly male police force and fire service. The police will have to hold back crowds, deal with fighting and arrest people, and therefore, they will say that they need 90 per cent. of strong, large constables. Those are the sort of constables they will interview. Of course, the only strong and large ones will be men, and that is how the objective will be achieved. That is the nonsense that we shall have arrived at. The Minister must give an answer, and there is no other which can be thought of.

I do not intend to go through the Lords amendments restating the different facets of my opposition to these proposals because basically I am opposed to the principle of this kind of legislation at all. If one gets involved in the details of a Committee or Report stage or in consideration of Lords amendments one is, before one knows it, embroiled in the whole issue and is subject to inferences of partial acceptance, which would not be correct in my case. I therefore propose to intervene on these two groups of amendments and then to leave the matter to the inevitable course of nature, if I may so describe it.

It is only a matter of regret to me that when important issues like this reach the House, almost invariably on a Friday but at other times, too, they are greeted by empty benches. I say that regardless of which side of the argument I am on. I have seen it through the years. On Fridays we have gone through proposals about divorce and abortion, and quite often I have been on the same side of the argument as some Labour hon. Members on these subjects, surprising though that may seem, but nearly always the House is empty. Our colleagues seem to be locked in their economic dogfights, almost to the exclusion of all other considerations. When these matters, which go far deeper and are far more pervasive and go much further in shaping the development of society, are discussed no one is present to listen to the arguments and perhaps be persuaded by them.

Is the hon. and learned Gentleman not aware that women always have had to take second place in this House? The situation arose in which a dogs Bill came before women, and the Lotteries Bill came before women, both of them before quite a full House. That is the situation today. Not even male members of the Committee can be bothered to turn up for the debate.

That is no doubt true but it does not have much to do with women taking second place, which is not the case in my experience during my time in the House. It would be ungracious to say that they have hogged the time—I must find a more elegant expression than that—but they have had their fair share of the time and there may be those who would say that matters relating to women are always something of a lottery anyway.

I feel that my duty in this matter is not in any way to hold up the procedural progress of the Bill. It is to make my own position on it perfectly clear over this extension of the use of legislation which I regard as wrong in principle and thoroughly dangerous. Having made that position clear, I must say that if people have to learn from painful experience rather than precept at least the responsibility is not mine.

I think I should start by paying a compliment to the hon. and learned Member for Beaconsfield (Mr. Bell). Throughout the proceedings about equality for women, whenever he has made a contribution on the subject, he has strengthened the backbone of the lobby for women's equality, and to that extent he has pushed the legislation along.

I deal with his point by reference to an example concerning the fireman. If there is an advertisement for people to become firemen, both men and women can apply. It will be unlawful to discriminate against a woman making an application for that kind of job. However, of course, the fire authorities can impose a requirement about stamina or strength, because that is an essential condition for carrying out the job. Therefore, the amendment does not prevent recruitment, and recruitment conditions which include requirements about stamina or strength.

I turn to the second example which is the one that we intend to cover in the Bill. If one advertises for somebody to play the part of Juliet, in our view it makes sense that the person inserting the advertisement or contacting an agent can require that a woman performs that part. I should have thought that that was fairly obvious. That is the exception where one can specify that only a woman is wanted for the job. That is why we have introduced this particular qualification into Clause 7.

How will one assess the stamina? Will it be at the interview or by filling in questions on a form? This is not plausible. We all know that there are physical differences of strength as well as other differences between men and women. Surely, the only way is the practical way. As to the theoretical way, if it were applied one could advertise not for a woman to play the part of Juliet but for someone with female characteristics, and there are plenty of such people around. It is not altogether easy in these days to know at whom one is looking in the Underground. Some men could pass quite well for Juliet. Does not the Minister think that it is all a little fanciful?

No, I do not think that it is fanciful. It would bring the legislation into disrepute if there were not some occasions on which one would specify that only a man or a woman was required for the position. Therefore, we thought it right to introduce this genuine occupational qualification for carrying out, for instance, a dramatic part. That is why we have the exception.

I shall now explain why we further amended the exception. There are certain jobs where there might be a different opinion whether one needed authentic male characteristics to carry out the job at all. Let us take as an example the job of a waiter. Some of my hon. Friends feared that a job such as that of a waiter might be considered by some people to be one which required authentic male characteristics of physique, appearance and so forth. We disagreed with that proposition and wanted to make it clear that the condition that had to be fulfilled in order to obtain the exception was that there was only to be a requirement as to physiology and gave the example of entertainment and dramatic performances. I hope that I have made the distinction clear.

Question put and agreed to.

Lords Amendment: No. 8, in page 5, line 21, after "available" insert

"for persons holding that kind of job".

I beg to move, That this House doth agree with the Lords in the said amendment.

The need for the amendment arises in connection with communal accommodation available on ships. We have been advised that the words
"the only such premises which are available"
in Clause 7(2)(c)(i) must relate to the totality of the living accommodation on a ship and that, therefore, the requirements of subparagraph (i) cannot be met by any ship which has more than one unit or block of sleeping and sanitary accommodation for its crew.

By definition, such a ship is equipped with separate sleeping and sanitary accommodation which could be used by women in privacy from men, although, in fact, it may not be available for this purpose. Where, for example, a ship which was recruiting a crew for a voyage had three units of communal living accommodation, one for deck crew, one for engine room crew, and one for catering ratings, and a woman applied to join the ship, it would not be possible even to attempt to claim that Clause 7(2)(c) applied because the ship would fail to meet the requirements of subparagraph (i), as it would have separate sleeping and sanitary accommodation which could be used by women. This would be so whether the woman was the first applicant or the last.

The effect of the amendment is to restrict the reference to "premises" in Clause 7(2)(c)(i) to premises which are available for persons holding the job in question.

Question put and agreed to.

Clause 9

Discrimination Against Contract Workers

Lords amendment: No. 9, in page 8, line 10, leave out "female" and insert "woman who is a".

4.45 p.m.

I beg to move, That this House doth agree with the Lords in the said amendment.

With this we may take Lords Amendment No. 13, in page 15, line 29, leave out "female" and insert "woman".

A point was raised in another place by my noble Friend Lord Gardiner about the use of the word "female" instead of "woman" in Clause 22. It was suggested that though Clause 2 provided for "man" to be read where appropriate for "woman", it did not allow "male" to be read for "female", with the result that Clause 22 does not deal with discrimination against men in the area of education. The analysis is equally relevant to Clause 9, which speaks of a "female contract worker". We think, therefore, that the word "woman" in place of the references to "female" will avoid any possible argument on the point.

Question put and agreed to.

Clause 13

Qualifying Bodies

Lords amendment: No. 10, in page 11, line 12, leave out "agents or associates" and insert "or agents".

I beg to move, That this House doth agree with the Lords in the said amendment.

Clause 13(2) is based on a precedent in the Consumer Credit Act 1974. There was some criticism of the inclusion of the word "associates", and the Government now accept that the word "associates", although appropriate in the Consumer Credit Act, would not be appropriate in the Bill. The amendment is made for that reason.

Question put and agreed to.

Clause 19

Ministers Of Religion Etc

Lords Amendment: No. 11, in page 14, line 41, leave out "any" and insert "a significant number".

I beg to move, That this House doth agree with the Lords in the said amendment.

With this we may take Lords Amendment No. 19, in page 22, line 34, leave out "any" and insert "a significant number".

It has been clear from the debates on these clauses both in this House and another place that many hon. Members and noble Lords have taken the view that the phrase "any of its followers" was too wide and open to misinterpretation. The amendments, therefore, replace the word "any" by the words "a significant number". We believe that, while safeguarding the position of those Churches in which there exist genuine disagreements as to what are or should be the received doctrines, these amendments should go some way to reassure those who fear that change might be held up by a single objector.

Will the hon. Lady give some indication of what "a significant number" means?

It certainly would be for them to decide, but there must be some reason for inserting the words. The Government must have some idea what they mean, otherwise they would not have made the alteration.

Although the religious susceptibilities test has been modified by these amendments, it is still an essential one to avoid placing on courts and tribunals the difficult and invidious task of making decisions on questions of religious doctrine, and also to give sufficient flexibility so that genuine religious feelings which fall short of religious doctrine may be respected.

Question put and agreed to.

Lords amendment: No. 12, in page 14, line 41, at end insert:

"(2) Nothing in section 13 applies to an authorisation or qualification (as denned in that section) for purposes of an organised religion where the authorisation or qualification is limited to one sex so as to comply with the doctrines of the religion or avoid offending the religious susceptibilities of a significant number of its followers."

I beg to move, That this House doth agree with the Lords in the said amendment.

The amendment ensures that in so far as ordination to the ministry—and its equivalents in the case of the non-Christian Churches—amounts to the conferring of a professional qualification under Clause 13, the Clause 19 exception will apply to such ordination as well as to employment under Clause 6.

Question put and agreed to.

Subsequent Lords amendment agreed to.

Clause 25

General Duty In Public Sector Of Education

Lords amendment: No. 14, in page 17, line 35, after "performance" insert:

"by a body to which subsection (1) applies of the duties imposed by sections 22 and 23 and shall also apply to the performance".

I beg to move, That this House doth agree with the Lords in the said amendment.

With this we may take the following Lords amendments: No. 15, in page 17, line 37, leave out from "Act" to end of line 38.

No. 16, in page 18, line 4, leave out from "Act" to end of line 5 and insert:
"(4) The sanctions in subsections (2) and (3) shall be the only sanctions for breach of the general duty in subsection (1), but without prejudice to the enforcement of sections 22 and 23 under section 63 or otherwise (where the breach is also a contravention of either of those sections)."

These amendments are drafting amendments. It is the Government's policy that enforcement of the education clauses should rest in the first place with Education Ministers. The amendment ensures that the Secretary of State's power under Sections 68 and 69 of the Education Act 1944 can be used in cases where the obligation imposed by Clauses 22 and 23 has been breached, as well as in enforcing the duty imposed by subsection (1).

Question put and agreed to.

Subsequent Lords amendments agreed to.

New Clause A

Discrimination: Consent For Assignment Or Sub-Letting

Lords Amendment: No. 17, in page 21, line 3, at end insert the following Clause A—

"A.—(1) Where the licence or consent of the landlord or of any other person is required for the disposal to any person of premises in Great Britain comprised in a tenancy, it is unlawful for the landlord or other person to discriminate against a woman by withholding the licence or consent for disposal of the premises to her.
(2) Subsection (1) does not apply if—
  • (a) the person withholding a licence or consent, or a near relative of his ("the relevant occupier") resides, and intends to continue to reside, on the premises, and
  • (b) there is on the premises, in addition to the accommodation occupied by the relevant occupier, accommodation (not being storage accommodation or means of access) shared by the relevant occupier with other persons residing on the premises who are not members of his household, and
  • (c) the premises are small premises as defined in section 31(2).
  • (3) In this section "tenancy" means a tenancy created by a lease or sub-lease, by an agreement for a lease or sub-lease or by a tenancy agreement or in pursuance of any enactment; and "disposal", in relation to premises comprised in a tenancy, includes assignment or assignation of the tenancy and sub-letting or parting with possession of the premises or any part of the premises.
    (4) This section applies to tenancies created before the passing of this Act, as well as to others."

    I beg to move, That this House doth agree with the Lords in the said Amendment.

    The purpose of this new clause is to deal with what I think the House will agree is a lacuna in the provisions of the Bill dealing with the disposal of premises. Subject to the small dwellings exceptions in Clause 31, Clause 30(1) makes it unlawful to discriminate in the disposal of premises. This would deal with the situation in which a landlord refused to grant a woman a lease on the ground of her sex, and it would also make it unlawful for a tenant to discriminate by refusing to assign the lease or sublet the premises to a woman on the ground of her sex.

    The new clause is designed to deal with the situation in which a tenancy agreement in respect of provisions covered by the Bill provides that the landlord's licence or consent is required to assignment or subletting and in which the landlord withholds his licence or consent on the grounds of the prospective assignee. It is right that this kind of discrimination should not escape the Bill. I commend the new clause to the House.

    Question put and agreed to.

    Clause 34

    Further Exceptions From Ss 29(1) And 30

    Lords amendment: No. 18, in page 22, line 27, leave out "prison" and insert

    "reception centre provided by the Supplementary Benefits Commission"

    I beg to move, That this House doth agree with the Lords in the said amendment.

    This is a technical amendment to correct an oversight in the drafting of the Bill.

    The difficulty about the use of "prison" as an example in this clause is that that which is provided in prison cannot properly be said to constitute goods, services or facilities to the public or a section of the public, except in so far as the facilities are those which are afforded to visitors. In other words, prison is a bad example for the purposes of Clause 34(1)(a) because that which is provided in prison is not caught by Clause 29(1) of the Bill. Therefore, there is no point in providing an exception for it in Clause 34.

    The words which this amendment would substitute,
    "reception centre provided by the the Supplementary Benefits Commission ",
    give a different example, which does not suffer from the same defect as "prison", of a single sex establishment for people requiring special care, attention or supervision.

    I am not sure that I have followed the hon. Lady's argument entirely clearly. I am not certain why the reception centre should be that of the Supplementary Benefits Commission. I cannot understand why it should not cover, and why there should not be specified in the drafting, reception centres provided by other voluntary organisations like the Salvation Army, the Church Army, and so on. Are we to understand that they fall into the category of

    "other establishments for persons requiring special care"
    and are, therefore, covered already, or is it an omission that voluntary organisations providing reception centres are net mentioned?

    The words,

    "reception centre provided by the Supplementary Benefits Commission",
    are chosen as a good example of a place which makes provision whereby persons without a settled way of life may be influenced to lead a more settled life. This example was chosen because most people are acquainted with it. I think that the hon. Gentleman's example would be equally reasonable.

    So the hon. Lady can, therefore, categorically say that "reception centre", although the Bill specifies the Supplementary Benefits Commission, will also include voluntary reception centres provided by the Church Army, the Salvation Army, and so on?

    Question put and agreed to.

    Subsequent Lords amendment agreed to.

    Lords amendment: No. 20, in page 23, line 17, column 2, leave out "paragraph" and insert "paragraphs 1 and 1A".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this amendment it will be convenient to take the following Lords amendments: No. 79, in Schedule 4, page 66, line 11, at end insert—

    "1A. Until 1st January 1978, section 12(2) does not apply to any organisation of members of the teaching profession where at the passing of this Act—
  • (a) the organisation is an incorporated company with articles of association, and
  • (b) the articles of association restrict membership to persons of one sex (disregarding any minor exceptions), and
  • (c) there exists another organisation within paragraphs (a) and (b) which is for persons of the opposite sex and has objects, as set out in the memorandum of association, which are substantially the same as those of the first mentioned organisation, subject only to differences consequential on the difference of sex.
  • 1B.—(1) Until a date specified by order made by the Secretary of State the courses of training to be undergone by men as a condition of the issue of certificates to them under the Midwives Act 1951 (1951 c. 53) or the Midwives (Scotland) Act 1951 (1951 c. 54) (as amended by section 20) must be courses approved in writing by or on behalf of the Secretary of State for the purposes of this paragraph.
    (2) Until the date specified under sub-paragraph (1), section 9 of the Midwives Act 1951 and section 10 of the Midwives (Scotland) Act 1951 (regulation of persons other than certified midwives attending women in childbirth) shall have effect as if for the words from the beginning to (but not including) "attends a woman in childbirth" where they first occur there were substituted the words—
    "If a person other than—
  • (a) a woman who is a certified midwife, or
  • (b) in a place approved in writing by or on behalf of the Secretary of State, a man who is a certified midwife".
  • The amendment made by this sub-paragraph shall be read without regard to the sections 35A and 37A inserted in the said Acts of 1951 by section 20(4) and (5)
    (3) On and after the said date the words to be substituted for those, in the said sections 9 and 10, mentioned in sub-paragraph (2) are—
    "If a person who is not a certified midwife".
    (4) An order under this paragraph shall be laid in draft before each House of Parliament, and section 6(1) of the Statutory Instruments Act 1946 (Parliamentary control by negative resolution of draft instruments) shall apply accordingly."
    No. 83, in Schedule 6, page 67, column 3, leave out from beginning of line 7 to end of line 8.

    No. 84, in page 67, leave out from beginning of line 11 to end of line 12.

    This group of amendments deals with two somewhat controversial matters—single sex unions in the teaching profession and male midwives. Both were the subject of reversals between Committee and the Bill coming back on to the Floor of the House.

    On the single sex unions, we have given consideration to anxieties which have been expressed and have come to the conclusion that it would be right to give the Joint Four teaching unions, which appear to be the only ones involved, a period of two years' exemption from the provisions of the Bill. That is the same concession as is made in respect of arrangements for multi-sex trade unions. I hope that these provisions will be welcomed.

    I turn now to male midwives. The Government are aware of the strong feelings in some quarters that men may not be acceptable to some women as mid-wives, even though there has been general acceptance of the principle of eliminating discrimination here. One problem is that there is no real evidence—there cannot be any evidence without experience—about the difficulties which may arise from admitting men to midwifery training and practice. It has always been the Government's intention to proceed carefully in this sphere and, as hon. Members will be aware from previous debates, the Bill contains wide safeguards.

    The Government's amendments made during the passage of the Bill in another place have the aim of making further safeguards and at the same time paving the way for obtaining evidence on the practical problems. The amendments introduce a transitional provision for a limited entry of men into midwifery under carefully controlled conditions before any general relaxation of the barriers is made.

    The effect of the second half of Amendment No. 79 and Amendments Nos. 83 and 84 is to allow the present legal barriers to male midwives to be removed on the coming into force of the statute, but at the same time to impose fresh transitional restrictions which could only be removed by a statutory instrument which would be laid before Parliament in draft.

    The effect of the transitional restrictions is to confine the training of men to become midwives to courses approved for the purpose by the Secretary of State and, similarly, to restrict the employment of men who qualify as midwives to particular places. Our intention is to approve courses initially at only two midwifery training schools, selected in consultation with the Central Midwives Board and the health authorities. Employment would be only at hospitals associated with the training schools. Progress would be carefully monitored and firm evidence on which to base discussions on a general relaxation of barriers should emerge.

    These have been matters of controversy. I hope that, although the amendments will not entirely remove the controversies, at any rate they will take some of the edge off them.

    The Under-Secretary of State said that it had always been the Government's intention to proceed with care in these matters. That was not the impression that we gained at the outset of the discussions, but I am glad to learn that that is the intention.

    These amendments are welcome. I still think that the teaching unions and the midwives should have been left out of the Bill. A certain amount of time and trouble would have been saved. The situation now would have been better for both of them. However, the Government have come some way to meeting us and we, therefore, accept that improvement.

    The fact that only two midwifery training schools will be used is encouraging news. I already had that information from the midwives, but it is good to have it confirmed by the Minister. I suggest that to use more would seem to be an unnecessary waste of money at this time when the National Health Service is in a more critical condition than when we discussed these matters in the summer. Are these courses ready, or will they be affected by the inquiry to which the Leader of the House referred during business questions this afternoon? If the Minister can give any information about that I shall be grateful, but the amendments are welcome in that they are an improvement on what was there before.

    Question put and agreed to.

    Clause 36

    Discriminatory Practices

    Lords amendment: No. 21, in page 24, line 14, leave out "or could result".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this we are to take the following Lords amendments:

    No. 22, in page 24, line 17, at end insert:
    "or which would be likely to result in such an act of discrimination if the persons to whom it is applied were not all of one sex".
    No. 23, in page 24, line 22, leave out "can" and insert "would".

    These amendments arise from an undertaking that I gave to the hon. Member for Barkston Ash (Mr. Alison). When we discussed Clause 36 on Report, the hon. Gentleman expressed reservations about "could result" or "would be likely to result" or "can", and I gave an undertaking to consider the matter. These amendments were made in another place as a result of that consideration.

    Clause 36 deals with discriminatory practices, and we are invited to consider Lords Amendments Nos. 21, 22 and 23 to that clause. I intervene only to point out that before the measure has been passed British Railways have started to remove "Ladies Only" notices from railway carriages.

    I am taking the matter up with Mr. Richard Marsh. He tells me that this was done in anticipation of the Bill becoming an Act. Having further considered the matter, British Railways' solicitor has advised them that the measure is not as restrictive as they thought it was. I seek an assurance from the Minister that there is nothing under this heading of discriminatory practices that will prevent British Railways from doing what they have been doing on certain lines for a long time, and that is to provide "Ladies Only" compartments, a practice that is much valued by ladies who travel on certain lines where there have been instances of attacks on females. I hope that the Minister can give such an assurance and confirm that the solicitor to British Railways has got in right for once.

    I hope that the hon. Gentleman will accept the spirit in which I reply. I should like notice of that. There is nothing in the law that prevents or compels British Railways from having "Ladies Only" compartments. The hon. Gentleman has raised a point about safety and security. Perhaps I may undertake to examine the matter and write to him about it.

    Question put and agreed to.

    Subsequent Lords amendments agreed to.

    Clause 37

    Discriminatory Advertisements

    Lords amendment: No. 24, in page 25, line 3, after "publication" insert "of the advertisement".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this we are to take Lords Amendment No. 25, in page 25, line 4, leave out "it was effected" and insert "the advertisement was published".

    These are drafting amendments, designed to clarify the meaning of subsection (4). They were prompted by comments in another place by Lord Drumalbyn.

    Question put and agreed to.

    Subsequent Lords amendment agreed to.

    Clause 42


    Lords amendment: No. 26, in page 26, line 30, at end insert—

    "(3) In the application of this section in England and Wales—
  • (a) "charitable instrument" means an enactment or other instrument passed or made for charitable purposes, or an enactment or other instrument so far as it relates to charitable purposes;
  • (b) "charitable purposes" means purposes which are exclusively charitable according to the law of England and Wales.
  • (4) In this application of this section to Scotland "charitable instrument" means an enactment or instrument passed or made by or on behalf of a body of persons or trust established for charitable purposes only."

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this we are to take Lords Amendment No. 62, in Clause 77, page 47, leave out lines 9 to 14.

    These amendments are largely technical and clarificatory. They transfer the definition of charitable instrument from Clause 7, the definition clause, to this clause, which deals with charities. They also effect a small change in the Scottish definition to bring it into line with the English one.

    Question put and agreed to.

    Clause 45

    Communal Accommodation

    Lords amendment: No. 27, in page 27, line 32, leave out subsection (5).

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this we are to take Lords Amendment No. 28, in page 27, line 44, at end insert—

    "( ) Neither subsection (3) nor subsection (6) is a defence to an act of sex discrimination under Part II unless such arrangements as are reasonably practicable are made to compensate for the detriment caused by the discrimination; but in considering under subsection (6)(b) whether the use of communal accommodation could lawfully be refused (in a case based on Part II), it shall be assumed that the requirements of this subsection have ben complied with as respects subsection (3)."

    The effect of the two amendments is to correct a defect in the drafting of the clause. It is intended that where a woman is refused a benefit in the employment field under this clause reasonable steps should be taken to compensate her for the detriment not only where the accommodation consists of communal accommodation but also where other benefits are refused because they are necessarily associated with communal accommodation. The amendments ensure that the clause has that effect.

    Quest/on put and agreed to.

    Subsequent Lords amendment agreed to.

    New Clause B

    Discriminatory Training By Certain Bodies

    Lords amendment: No. 29, after Clause 45, in page 28, line 4, at end insert the following Clause B—

    "B.—(1) Nothing in Parts II to IV shall render unlawful any act done in relation to particular work by a training body in or in connection with—
  • (a)affording women only, or men only, access to facilities for training which would help to fit them for that work, or
  • (b)encouraging women only, or men only, to take advantage of opportunities for doing that work,
  • where it appears to the training body that at any time within the 12 months immediately preceding the doing of the act there were no persons of the sex in question doing that work in Great Britain or the number of persons of that sex doing the work in Great Britain was comparatively small.
    (2) Where in relation to particular work it appears to a training body that although the condition for the operation of subsection (1) is not met for the whole of Great Britain it is met for an area within Great Britain, nothing in Parts II to IV shall render unlawful any act done by the training body in, or in connection with—
  • (a)affording persons who are of the sex in question, and who appear likely to take up that work in that area, access to facilities for training which would help to fit them for that work, or
  • (b)encouraging persons of that sex to take advantage of opportunities in the area for doing that work.
  • (3) Nothing in Parts II to IV shall render unlawful any act done by a training body in, or in connection with, affording persons access to facilities for training which would help to fit them for employment, where it appears to the training body that those persons are in special need of training by reason of the period for which they have been discharging domestic or family responsibilities to the exclusion of regular full time employment.
    The discrimination in relation to which this subsection applies may result from confining the training to persons who have been discharging domestic or family responsibilities, or from the way persons are selected for training, or both.
    (4) In this section "training body" means—
  • (a) a person mentioned in section 14(2)(a) or (b), or
  • (b) any other person being a person designated for the purposes of this section in an order made by or on behalf of the Secretary of State,
  • and a person may be designated under paragraph (b) for the purposes of subsections (1) and (2) only, or of subsection (3) only, or for all those subsections."

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this we are to take Lords Amendment No. 30, in Clause 46, page 28, line 17, leave out subsections (2) and (3).

    New Clause B consists mainly of provisions from Clause 46 allowing a limited degree of positive discrimination in training which have already been agreed by the House. Only subsection (3) of the new clause is entirely new to the Bill, and it results from the Government's view that there is one more area where training bodies should be able to make special provisions for providing benefit to women without any fear of a breach of the terms of the Bill. This is the area of special training for persons who, for domestic or family reasons, have been out of full-time employment for some considerable time.

    A woman—or a man—coming back to the labour market may find that her old skills are no longer in demand or they need modifying. It could be that the ex-housewife could benefit from a more general course which would enable her to readjust to a pattern of working life after a long time away from employment In any case, she will have special problems which result from her absence from the labour market.

    Under the Bill as it left this House, a course confined to women returning to the labour market would have been un-lawful, and a training body confining a course to women and men who had been out of the labour market for domestic reasons might have been challenged to show under Clause 1(1)(b) that this was "justifiable".

    I hope the House will recognise that there is merit in providing special courses for mothers or fathers who have had family responsibilities to help them train for a return to the world of employment and widen their opportunities. For that reason, I commend the new clause to the House.

    The worrying thing about the original Bill was the suggestion that there could not be positive discrimination. For that reason, I am sure the House will welcome the introduction of this new clause, which will help considerably in an area where women often find the greatest discrimination, and that is when they return to work after having raised their families or undertaken a domestic responsibility and find that they cannot get a suitable type of training. I am sure that many women will be pleased to see these provisions included in the Bill.

    Question put and agreed to.

    Subsequent Lords amendment agreed to.

    New Clause C

    Trade Unions Etc: Elective Bodies

    Lords amendment: No. 31, after Clause 46, in page 29, line 27, at end insert the following Clause C:

    'C.—(1) If an organisation to which section 12 applies comprises a body the membership of which is wholly or mainly elected, nothing in section 12 shall render unlawful provision which ensures that a minimum number of persons of one sex are members of the body—
  • (a) by reserving seats on the body for persons of that sex; or
  • (b) by making extra seats on the body available (by election or co-option or otherwise) for persons of that sex on occasions when the number of persons of that sex in the other seats is below the minimum,
  • where in the opinion of the organisation the provision is in the circumstances needed to secure a reasonable lower limit to the number of members of that sex serving on the body, and nothing in Parts II to IV shall render unlawful any act done in order to give effect to such a provision.
    (2) This section shall not be taken as making lawful—
  • (a) discrimination in the arrangements for determining the persons entitled to vote in an election of members of the body, or otherwise to choose the persons to serve on the body, or
  • (b) discrimination in any arrangements concerning membership of the organisation itself."
  • I beg to move, That this House doth agree with the Lords in the said amendment.

    The clause provides that trade unions and other bodies to which Clause 12 applies may take special steps to encourage persons of one sex to become members or to train persons of one sex for posts of any kind within the organisation and encourage them to take advantage of opportunities for holding such posts, where that sex has in the past been under-represented among the members or officials of the organisation. In effect, this takes account of the fact that in many unions women may need some special encouragement if they are to overcome any diffidence and any assumption that union affairs are more naturally the preserve of men, and come to play a full and equal part within the bodies that represent them.

    New Clause C seeks to take this principle one step further by allowing the reservation or creation of places for persons of a particular sex on committees, delegate conferences and other elected bodies within the organisation. I think we have to accept that, for a multitude of reasons, those women who participate actively at all levels within their unions together with men are the exception rather than the rule. A number of unions have attempted to alter this pattern by steps designed both to encourage women to participate fully in union affairs and to ensure that women are seen to be working alongside men on the decision-making bodies of the organisation. The Government feel that for the Bill to force those unions which have chosen this means of encouraging women's participation to abolish those arrangements at once would be a retrograde step of no benefit to either sex. Should other unions choose to follow the example of the few who have made such arrangements, we feel they should be allowed to do so.

    Over time, we hope that it will generally cease to be necessary to take any special steps to ensure the representation of women, and a further amendment, which was agreed in another place and which we shall be considering shortly, will enable this new clause to be amended or repealed entirely when no longer needed. More and more a person's sex should become an irrelevance in the selection of representatives—men and women alike will put themselves forward and be chosen on merit. Until that day comes, and in the interests of speeding its arrival, I hope hon. Members will agree to the new clause contained in the Lords amendment.

    Question put and agreed to.

    Clause 57

    Recommendations And Reports On Formal Investigations

    Lords amendment: No. 32, in page 34, line 20, leave out subsections (2) and (3) and insert—

    "(2) The Commission shall prepare a report of their findings in any formal investigation conducted by them.
    (3) If the formal investigation is one required by the Secretary of State—
  • (a) the Commission shall deliver the report to the Secretary of State, and
  • (b) the Secretary of State shall cause the report to be published,
  • and unless required by the Secretary of State the Commission shall not publish the report.
    (4) If the formal investigation is not one required by the Secretary of State, the Com mission shall cither publish the report, or make it available for inspection in accordance with subsection (5).
    (5) Where under subsection (4) a report is to be made available for inspection, any person shall be entitled, on payment of such fee (if any) as may be determined by the Commission—
  • (a) to inspect the report during ordinary office hours and take copies of all or any part of the report, or
  • (b) to obtain from the Commission a copy, certified by the Commission to be correct, of the report.
  • (6) The Commission may if they think fit determine that the right conferred by subsection (5)(a) shall be exercisable in relation to a copy of the report instead of, or in addition to, the original.
    (7) The Commission shall give general notice of the place or places where, and the times when, reports may be inspected under subsection (5)."—[Mr. John Fraser.]

    Read a Second time.

    I beg to move, as an amendment to the Lords amendment, after subsection (2), insert—

    '(2A) Without prejudice to other matters that may be included in any reports of the findings in any formal investigation, the Commission shall include in each report a statement of their findings regarding the relevance of the matters so investigated to the operation of the Equal Pay Act 1970'.
    I hope that this amendment to Lords Amendment No. 32 will be acceptable to the Government. However, I do not expect it to be because I believe that they will follow the pattern that they established during the Committee stage of the Bill, when nearly every amendment to improve the Bill and to make it a Bill that had real meaning to women, was opposed by them and supported by Opposition Members. Where are those hon. Members today? Is it not about time that we televised the proceedings of the House so that the empty benches in the House of Commons would be revealed to the British nation? It can be truthfully said that the Government obtained consent for this basically bad Bill in a coalition between Labour and Conservative Members. It is interesting that the only real opposition to the Bill was that of the four Labour women Members of the Committee. I hope that this message will go out from the House to women who genuinely care about feminism.

    On that basis alone this cannot be a good Bill. It is no good the Government constantly patting themselves on the back about it. There are vast areas of sexually discriminatory legislation—for example, pensions, taxation, and social security—which remain on the statute book.

    It should be made clear that not all women have been deceived by the grandiose descriptions given to the Bill by some politicians. In particular, the Women's Liberation Movement does not share this House's general satisfaction with the Bill. Until the question of equality of treatment is dealt with, to talk of equal opportunities and about the ending of sex discrimination in society is both hypocritical and illusory.

    Why do I and my hon. Friends believe that this amendment is important and significant? It is important because even at this late stage the amendment can go some way towards making the Equal Pay Act effective. Both measures are due to be implemented in 1975. The Equal Pay Act is to be fully implemented. Who better to monitor the workings of that Act than the Equal Opportunities Commission? It is an integral part of its job because there is no doubt that employers have found and are constantly finding ways and means of avoiding equal pay, for example by job evaluation schemes which place more importance on physical strength than on manual dexterity. However, many women's jobs have completely disappeared. One of the things that worries me about combating blatant discrimination under both these measures is that they combat only the blatant discrimination which results from and does not cause women's inequality. Legislation such as this will have only a limited effect on the rôles that women play in the economy.

    5.15 p.m.

    In the present serious economic situation, sexual rôles will, as in the past, be enforced even more strongly. There is no doubt that a clear sexual division of labour saves money for employers and the State, while fierce competition between men and women for a decreasing number of jobs weakens trade unions. There is no doubt also that sexual division of labour is at the root of women's inequality. Social conditioning maintains that division. Women today have two rôles to play in our economy. The first is that of housewife—unpaid labour. The second is that of cheap labour. In the words of the 1974 Government handbook,
    "Women form the only substantial reserve which can be employed or dismissed with relative ease according to economic fluctuations"
    More than half the women over 15 years of age go out to work and they receive approximately half the pay of men. The increase in the labour force over the past 15 years is accounted for by married women in unskilled and semiskilled jobs. If, for example, they received unemployment benefit in their own right or earned the same as men, a massive redistribution of income would be needed. I suspect that that massive redistribution will not happen unless we monitor the effects of the Equal Pay Act.

    Far from working for pin money, in 19 per cent. of the households women are the main breadwinners and it is essential that the Equal Opportunities Commission should monitor what will happen to women when the Equal Pay Act becomes fully operative. It would be unthinkable that that Commission should not do so. I cannot understand why it should be necessary at this late stage to table an amendment such as this, and why those who drafted the Bill did not think about this aspect in the first place and table a similar amendment.

    The Equal Opportunities Commission must have some such rôle to begin the important work that this House hopes will end discrimination. The Commission will be able to examine the trade unions and what they are doing about fighting for equal pay for their women members. It can look further into the blatant male chauvinist prejudice on the part of employers and even on the part of some members of trade unions. It will be able to issue reports and will have the people and machinery to do the job. Today, Parliament can give that Commission this job by law.

    For far too long women in our society have been big business to employers. It will be a new departure to monitor closely and carefully an Act of Parliament, for more often than not Acts of Parliament are legislated for and then forgotten. It would be tragic if that happened over the Equal Pay Act because 44 per cent. of all women who work are single, separated or widowed.

    I commend this amendment to the House and to the Government. I hope that the Government will not say that it is implicit that the Equal Opportunities Commission has the power to do this job. For once, let us write the powers in so that that Commission knows what its job is. At the end of the day let there be a reconciliation between the Government and the women members of the Standing Committee. I hope that during the last stages of the Bill the Government will have the dignity, the civility and the good common sense to accept what is, after all, a logical amendment.

    I wish to give my warm support to the amendment to the Lords amendment, because it has merit. I do not agree with my hon. Friend the Member for Northampton, North (Mrs. Colquhoun) that the Bill is totally bad. I have in the course of a number of speeches said many nasty things about the Bill, but I believe that it is a good Bill at the end of the day, the best that we could have secured in the circumstances.

    I should have been much happier if the Government had accepted all our amendments. However, they have gone some way towards meeting us by noting some suggestions which we made in the form of an amendment on Report in another place. I am very grateful for that.

    I am pleased—I think that I speak for my hon. Friend the Member for Ilford, North (Mrs. Miller) in this respect—that the Bill has reached this stage and is about to go on to the statute book because, limited though it is, it will do much to improve the general status of women.

    I welcome the extended provisions of Clause 47 which I believe arise directly from an amendment which we tabled on Report in this House. I am grateful to the Government for having taken up that amendment.

    The amendment to the Lords amendment has merit because, although the Equal Opportunities Commission is making formal investigations and although the Government may say that what we seek to achieve is implicit, anyway it would be sensible to make it explicit that the Commission will have the job also of monitoring the Equal Pay Act.

    We all know that the provisions of the Equal Pay Act by itself, without the sex discrimination legislation, and laudable though the intentions are of the Equal Pay Act are being evaded and have been evaded since 1970. Employers have been getting round the Act. They have been regrading staff. They have been creating new unisex grades into which to push women who were previously in a different grade so as to pay them less than men who do similar work.

    Conditions of employment have been deliberately, almost insidiously, changed over the past few years, often in a way which the women themselves do not appreciate, so that the provisions of the Equal Pay Act shall be evaded. Jobs have been reclassified. I know of many cases where male members of staff have been promoted, perhaps unnecessarily and not on merit, simply because of the firm's desire to avoid complying with the provisions of the Act.

    With the Equal Pay Act coming into full operation at the end of 1975, what better opportunity is there to see how the Act is working and whether some of the bigger private enterprise firms are operating it as it should be operated? As the opportunity will be afforded to the EOC to look into the matter when it is making a formal investigation, we should wherever appropriate lay upon the Commission the duty of carrying out this monitoring. I hope that the Government will consider the amendment in the spirit in which it is intended. Our only intention is to make the Act as workable and as strong as possible.

    As a male chauvinist beast I should like to add at least one fairly deep voice to the outcry which has emerged from our benches. I am desperately in favour of equal pay and against sex discrimination. Equally, I cannot agree with my hon. Friend the Member for Northampton, North (Mrs. Colquhoun) that this is a Bill cooked up by those who wish to see women sent back to the kitchens for ever.

    The Bill is a perfectly sensible start and, if it works properly, it can do much good. My worry is whether it will work as the promoters of the Bill hope that it will. I support the amendment to the Lords amendment because I think we are all entitled to see as often and as clearly as possible how the legislation is working in practice.

    I have two major worries. The first is that the effect of the Bill in the main will depend upon a complaints procedure that will be operated through industrial tribunals. It is right that these informal tribunals should deal with this territory along with unfair dismissals, employment protection, maternity pay, redundancy pay, and so on.

    It is wrong that those who wish to obtain rights under these various enactments should not have the benefit of legal aid. Unless a woman who seeks to enforce her rights and fights her employer has a pretty tough union behind her she is very greatly disadvantaged, because her employers will have legal aid to fight the case and she will not.

    In an ordinary case before one of these tribunals it does not matter much. Indeed, in some cases there is much to be said for there not being legal representation in what are essentially informal procedures, but when it comes to arguing a difficult point of law or considering whether a new Act of Parliament is being properly applied, it is grossly unfair that the claimant should not have the benefit of legal representation, although in practice the employer will always have that benefit.

    No doubt the chairmen will continue to do their valiant best to ensure that justice is done, but it is not possible for a woman applicant in a case such as this to present her case with sufficient accuracy; to quote the authorities; to compete with a man who is, after all, a trained, qualified, skilled advocate—or, indeed, a woman who is a trained, qualified, skilled advocate, that woman acting on behalf of the employers.

    The employee must too often appear on her own. The employer seldom does so. The Bill cannot change the legal aid rules, although I understand that the Lord Chancellor can do so without even coming to the House with new legislation. Meanwhile, for this, the first of my reasons, let us have the legislation and its effects monitored as carefully as possible.

    The second point is more subtle but, I believe, far more dangerous to women's rights. It is the fear that many of us have that the total effect of the Equal Pay Act, the Sex Discrimination Act and the Employment Protection Act maternity benefit provisions as they will be, will be to encourage employers to evade the new law en masse, on the same basis and with the same sorts of impropriety as employers in totally different circumstances evaded the anti-closed shop provisions of the Industrial Relations Act.

    In other words, when given the choice between a man and a woman to employ for a managerial or executive post, employers will tend to choose the man and to put against the name of the woman who is not employed the one word "unsuitable". Monitoring should take place.

    As the provisions of the Bill come into effect I fear that vast harm may be caused. The reason for that is simple. Women, at last, will get equal pay, but there will be difficulties. There will be those employers, as my hon. Friend the Member for Barking (Miss Richardson) correctly pointed out, who will attempt to evade their responsibilities by regrading. However, I believe that in the main most employers will seek to comply with the Act in due course. I note that my hon. Friend the Member for Barking shakes her lovely head, but I believe that that will happen. I believe that in 10 years' time people will look back on the days when there was not equal pay as an age of barbarism. I believe that they will be unable to understand how such a distinction was made. Further, I believe that maternity pay for six weeks will be accepted in due course.

    5.30 p.m.

    I know that my hon. Friend feels that that period is not long enough. I voted with my hon. Friend against the Government because I believed that that provision should have come in at an earlier date and that it should not be necessary to wait two years.

    The combination of equal pay, combined with its being more expensive to employ a woman of childbearing age and with the duty of an employer to take a woman back into the job that she left at any time within 21 weeks, and if necessary to dismiss the replacement—that being unfair dismissal if the replacement has been employed for six months or more unless he or she has been told that it would be necessary to go when mother returns—with the additional risks of trouble before industrial tribunals will induce employers to seek to evade these combined new statutes.

    Let me make my position perfectly plain. I support these combined new statutes. However, as my hon. Friends well know. I am concerned that the combination of these measures will destroy the very equality which they are designed to create. I am afraid that they must recognise that risk. If they do not recognise it they are closing their eyes to reality. Proper monitoring must take place so that we know what is happening. It is no good making laws and asking people to comply with them, giving people rights before tribunals which are not as real as they would appear to be because people cannot enforce them through lack of legal representation, and then not watching with the greatest possible care to ensure that such rights are implemented in a fair and proper manner.

    These are new laws. They are part of a vast assembly of much-needed employee protection. These are protections in addition to those given to men in industry. It is right that women should now be given this protection, but it is wrong that those who have campaigned for it so valiantly and for so long should fail to recognise the difficulties which will undoubtedly be created in implementation.

    The amendment seeks to set up a form of monitoring in connection with the investigations and inquiries which will be set up in any event. It would seem that the Government could accept the amendment as it would help in the monitoring of important rules. It would help in the initial stages at least to ensure that these real attempts to overcome the difficulties that have existed in the past will not die as a result of deliberate frustration by employers. That applies to both male and female employers. Indeed, some of the people most prejudiced against women are themselves women. We must ensure that the accusation cannot be made that women do not have the representation that they should have from the law. We must ensure that these measures are not misused by industry by any of the methods, however subtle, outlined by my hon. Friend the Member for Barking.

    Perhaps you will permit me, Mr. Deputy Speaker, to begin by saying something totally irrelevant. I was reminded of this matter by my hon. and learned Friend the Member for Leicester, West (Mr. Janner). On the last occasion when I replied to my hon. and learned Friend in the House I may inadvertently have suggested that the Wig and Pen Club was a discriminatory institution. I wish to correct that suggestion. In fact, it is not a discriminatory institution. I make that correction especially in view of the number of letters I have had from women on the subject.

    I turn to the points that have been raised in the debate. I hope that my hon. and learned Friend will not denigrate or devalue the effectiveness of the tribunals. During the time in which they have operated, notwithstanding the absence of lawyers, they have had a remarkable record of success, not least perhaps because they have the assistance of conciliation officers in the early stages of proceedings.

    I did not say that there was an absence of lawyers. I said that there was an absence of lawyers on the side of employees when lawyers are present on the side of employers. With respect, I do not denigrate the work of the tribunals, in spite of that unfairness.

    I am glad that my hon. and learned Friend says that. We must make it clear to those who intend to present their cases before the tribunals that their chances, on past performance, are fairly high. I do not dissent from the proposition that there may well be circumstances in which the assistance of a lawyer on behalf of the complainant is necessary. Of course, the Lord Chancellor's committee is considering legal aid before tribunals. I am not suggesting that there may not be some difficulties, but on the whole the tribunal system, even without legal aid, has been extraordinarily successful. I do not think that anything we say in the House should deter people from making use of the system when they present cases under the unfair dismissal provisions, under the Equal Pay Act, or under this measure.

    I hope I do not misunderstand my hon. and learned Friend's emphasis, but I think he was suggesting in one part of his speech that the Equal Pay Act, the operation of the Employment Protection Bill and the operation of this measure may reduce the chances of employment and promotion for women. It was implicit in what he said that employers might find it less attractive or too expensive to take them into their workforce. During the run-up to the Equal Pay Act there has been no evidence that that is the case. The country as a whole, and employers and unions in particular, have accepted the spirit of that legislation. I rebut any suggestion that this kind of legislation will reduce opportunities for women.

    My hon. Friend the Member for Northampton, North (Mrs. Colquhoun) said that this is a limited Bill. Indeed, it is a limited Bill. It does not deal, for example, with social security or taxation although it deals with pensions. However, the fact that it is a limited Bill does not mean that it limits the opportunities of women. The Bill deals with employment and the supply of goods, services and facilities, and to that extent it is a radical measure. It is a widespread measure, a measure equalled in only very few countries. My hon. Friend is right in saying that it does not extend to social security or taxation, but I do not believe that those are areas which limit the opportunities of women, although they are areas that must be considered. I hope that the Equal Opportunities Commission will consider them, but I must assert that the Bill is a radical measure which will do a great deal to improve the opportunities of women.

    I now turn to the matters raised in the amendment and the arguments behind them. The amendment seeks to provide that progress towards equal pay and the operation of the Equal Pay Act should be monitored by the Commission. We were well aware that there was a necessity for the Commission to interest itself in the operation of the Equal Pay Act. For that reason, in Clause 50(1)(c), there is placed upon the Commission the duty not the power,
    "to keep under review the working of…the Equal Pay Act 1970."
    That is a duty which is imposed upon it. It is not an option for a discretion but something that the Commission is obliged to undertake. We have imposed that duty upon the Commission. In Clause 64(1)(d) we give the Commission a power to serve a non-discrimination notice in respect of any act which is a breach of an equality clause. That is the phraseology which is taken from the amended Equal Pay Act. We are giving the Commission not only the duty to keep under review the working of the Act but the power to serve a non-discrimination notice in respect of non-observance of the Act.

    Finally, we recognise that there may be some women who are unable themselves to present their cases to the industrial tribunals. In Clause 72 we give the Commission the power to represent women before tribunals. It is a power that will be enjoyed in addition to a similar power to be exercised by the Department of Employment. Therefore, I hope that my hon. Friends will study carefully those provisions in the Bill.

    I turn to the technical effect of the amendment. There are circumstances in which the Commission might undertake an investigation into, say, the conduct of single-sex schools. It would be inappropriate for that body to add provisions relating to the Equal Pay Act 1970 since it would be entirely irrelevant to that type of investigation. The same argument would apply if the Commission were to conduct an investigation into the provision of banking and credit facilities.

    I ask my hon. Friends to consider another proposition. I hope that some investigations will be undertaken by the Commission into the working of the 1970 Act. If we were to be entirely logical and symmetrical in our thinking, we would need to give an obligation to the Commission to state its findings on the sex discrimination legislation. That would underestimate the sense and fail to recognise the duties of the Equal Opportunities Commission. In cases where equal pay was being investigated, it would be of the essence that any report should deal with those matters. If such a body were to investigate matters concerning equal pay and equal opportunity, it would address itself to matters relevant to the Equal Pay Act 1970. But the obligations and powers already exist and to include such a provision would add nothing to the situation. Indeed, it would be an unwieldy addition.

    I accept that the question of equal pay needs to be monitored. I have greatly concerned myself in monitoring the progress of equal pay, and indeed I have done so even before the legislation comes into operation. Where I have disc over discriminatory collective agreements, I have not hesitated to refer them to the Industrial Arbitration Board. There have been regular checks by my Department, including visits to individual firms, to check the progress towards equal pay. Indeed evidence has been published in the Department of Employment Gazette about progress in that regard. We have undertaken a widespread publicity campaign to ensure that people understand their rights under the Act.

    The Department of Employment is very much better equipped to get at the details of the operation of the Act than is the Equal Opportunities Commission because of the information flowing into the Department dealing with wage rates and collective agreements. I give an assurance that my Department will continue that monitoring process, although I am not saying that I regard the Equal Opportunities Commission as having no part to play. Indeed it is given powers in the Bill to enable it to play an important part.

    I hope that my hon. Friends will not press the matter to a Division. I hope that I have given them some reassurance about the contents of the Bill and the responsibilities which I regard my Department as undertaking. I promise to bear these matters in mind as the legislation becomes a reality.

    Will the Minister confirm that up to the present time not one employer or employers' organisation has yet informed the Department that it will be unable to operate the requirements of the Equal Pay Act?

    Nobody to my knowledge has informed me that he will be unable to operate the requirements of the Equal Pay Act. Some concerns—although not very many—when we were considering the limitation of wage increases in the current year thought that they would get away with it then. That was the reason for our making equal pay the only significant exception to the £6 a week maximum.

    Question put and negatived.

    Lords amendment agreed to.

    Subsequent Lords amendments agreed to.

    Clause 59

    No Further Sanctions For Breach Of Act

    Lords amendment: No. 35, in page 35, line 19, leave out subsections (2) and (3) and insert—

    "(2) In subsection (1) "sanction" includes the granting of an injunction or declaration, but does not include the making of an order of Certiorari, mandamus or prohibition.
    (3) Subsection (2) does not affect the remedies available under section 63(2), notwithstanding that subsection (2) would prevent those remedies being obtainable in the High Court.
    (4) In relation to Scotland in subsection (1) "sanction" includes the granting of an interdict or of a declarator or a decree ad factum praestandum, but otherwise nothing in this Act shall affect any right to bring any proceedings, whether civil or criminal, which might have been brought if this Act had not been passed."

    5.45 p.m.

    I beg to move, That this House doth agree with the Lords in the said amendment.

    This amendment is primarily designed to correct two defects in Clause 59. The first defect was that the clause, as it stood, would have allowed a person to seek an injunction in respect of a contravention of the employment provisions of the Bill. Since only a court may grant an injunction, this would mean that a court could have found itself dealing with a "Part II case" without the matter ever having been referred to an industrial tribunal. The amendment corrects this defect.

    The second defect was that Clause 59 did not exclude the High Court's jurisdiction generally to make declaratory judgments. Thus, it would have been possible for an aggrieved person to bypass, say, a county court and go straight to the High Court for a declaratory judgment. The amendment ensures that the powers to make declarations are restricted to those expressly given to tribunals and county courts or sheriff courts by the Bill.

    Question put and agreed to.

    Clause 61

    Conciliation In Employment Cases

    Lords amendment: No. 36, in page 36, line 12, at end insert:

    "(2A) In proceeding under subsection (1) or (2), a conciliation officer shall where appropriate have regard to the desirability of encouraging the use of other procedures available for the settlement of grievances."

    I beg to move, That this House doth agree with the Lords in the said amendment.

    The amendment places a statutory duty on conciliation officers to encourage the use of voluntary grievance procedures, or any other appropriate procedures, in cases under this Bill and the Equal Pay Act. In practice, conciliation officers, who are part of ACAS, already do this in appropriate cases relating to unfair dismissals, but the amendment will give this practice a statutory basis. It will ensure that all parties to disputes will, where appropriate, be encouraged, but not compelled, to use voluntary procedures wherever these exist.

    I very much welcome the amendment which is very much in line with what some of us have been saying for some time. It is a considerable improvement.

    Question put and agreed to.

    Clause 63

    Claims Under Part Iii

    Lords amendment: No. 37, in page 37, line 42, leave out "four" and insert "two".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    The amendment will reduce from four months to two months the period between the submission of a complaint to the Education Ministers and the time when the complainant could take proceedings in the county court. The Government accept that it is reasonable to expect the majority of complaints to have been dealt with within the shorter time. If this does not prove possible in a number of cases, the Education Ministers will continue to consider the complaints after the two months period has elapsed, and to issue a direction if this is appropriate.

    Question put and agreed to.

    Clause 68

    Persistent Discrimination

    Lords amendment: No. 38, in page 41, line 1, leave out "72" and insert "63".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    This amendment corrects a printing error.

    Question put and agreed to.

    Clause 71

    Help For Aggrieved Persons In Obtaining Information Etc

    Lords Amendment: No. 39, in page 42, line 34, leave out from "manner" to "omitted" in line 6 on page 43 and insert:

    "the Secretary of State shall by order prescribe—
  • (a) forms by which the person aggrieved may question the respondent on his reasons for doing any relevant act, or on any other matter which is or may be relevant;
  • (b) forms by which the respondent may if he so wishes reply to any questions.
  • (2) Where the person aggrieved questions the respondent (whether in accordance with an order under subsection (1) or not)—
  • (a) the question, and any reply by the respondent, whether in accordance with such an order or not, shall, subject to the following provisions of this section, be admissible as evidence in the proceedings;
  • (b) if it appears to the court or tribunal that the respondent deliberately, and without reasonable excuse".
  • I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will be convenient to take Lords Amendments Nos. 40 to 45.

    We held a lengthy, slightly erudite debate on this matter during the Report proceedings. A number of constructive and useful criticisms were made. The purpose of these amendments is to take account of the criticisms made mainly by the hon. and learned Member for Southport (Mr. Percival). They were discussed in the House of Lords and I hope will prove acceptable to this House.

    Question put and agreed to.

    Subsequent Lords amendments agreed to.

    Clause 73

    Period Within Which Proceedings To Be Brought

    Lords amendment: No. 49, in page 44, line 28, leave out "three" and insert "six".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    This amendment increases from three to six months the period from the date when the act complained of was done, within which proceedings may be brought in a county or sheriff court in respect of that act. Industrial tribunal proceedings would remain subject to their normal three-month limitation, which is in fact prescribed in subsection (1).

    The institution of county or sheriff court proceedings however are rather slower, more formal, and more elaborate; and the potential litigant has to consider the question of cost and, possibly, apply for legal aid.

    Having considered the matter, the Government concluded that a three-month period would be an unreasonably short period within which to require county or sheriff court proceedings to be instituted and we therefore decided to recommend a six-month period.

    Question put and agreed to.

    Lords amendment: No. 50, in page 44, line 43, leave out from "if" to end of line 45 and insert

    "in all the circumstances of the case, it considers that it is just and equitable to do so".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    As it stands, Clause 73(5) enables a court or tribunal to entertain a complaint out of time if it considers that it was not "reasonably practicable" for the complaint to have been brought within the prescribed period. In this amendment we are proposing that courts and tribunals should have a rather more generous discretion to entertain complaints out of time than that which is allowed them by the "reasonably practicable" test.

    The principal argument in favour of extending this discretion is that because the individual complainant has to decide in which forum to bring her complaint, provision ought to be made for the complainant who institutes proceedings in one forum, only to discover that they should have been brought in the other, and that she is out of time in that other forum; that is, they should be able to entertain out of time complaints if it is "just and equitable" to do so.

    Question put and agreed to.

    Clause 74

    Validity And Revision Of Contracts

    Lords amendment: No. 51, in page 45, line 40, at end insert—

    "(4A) An order under subsection (4) may include provision as respects any period before the making of the order."

    I beg to move, That this House doth agree with the Lords in the said amendment.

    This amendment is largely clarificatory. Subsection (2) of Clause 74 provides that a term in a contract which is discriminatory against a party to the contract shall be unenforceable against that party; and subsection (4) that such terms are to be capable of revision by a county or sheriff court on the application of either party to the contract. There will be cases where justice and equity require that an order revising a term should make provision for the period between the time when the term became unenforceable and the date of the making of the order. The amendment makes it clear that orders may relate to this period.

    Question put and agreed to.

    Lords amendment: No. 52, in page 45, line 32, at end insert—

    "(4) Subsection (3) does not apply—
  • (a) to a contract settling a complaint to which section 60(1) of this Act or section 2 of the Equal Pay Act 1970 applies where the contract is made with the assistance of a conciliation officer;
  • (b) to a contract settling a claim to which section 63 applies."
  • I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it may be convenient to discuss Lords Amendment No. 53.

    These amendments are purely consequential on Lords Amendment No. 51. They do no more than adjust the order of the subsections in Clause 74.

    Question put and agreed to.

    Subsequent Lords amendment agreed to.

    New Clause D

    Educational Charities In England And Wales

    Lords amendment: No. 54, after Clause 74, in page 46, line 3, at end insert the following Clause D:

    "(1) This section applies to any trust deed or other instrument—
  • (a) which concerns property applicable for or in connection with the provision of education in any establishment in paragraphs 1 to 5 of the Table in section 22, and
  • (b) which in any way restricts the benefits available under the instrument to persons of one sex.
  • (2) If on the application of the trustees, or of the responsible body (as defined in section 22), the Secretary of State is satisfied that the removal or modification of the restriction would conduce to the advancement of education without sex discrimination, he may by order make such modifications of the instrument as appear to him expedient for removing or modifying the restriction, and for any supplemental or incidental purposes.
    (3) If the trust was created by gift or bequest, no order shall be made until 25 years after the date on which the gift or bequest took effect, unless the donor or his personal representatives, or the personal representatives of the testator, have consented in writing to the making of the application for the order.
    (4) The Secretary of State shall require the applicant to publish notice—
  • (a) containing particulars of the proposed order, and
  • (b) stating that representations may be made to the Secretary of State within a period specified in the notice.
  • (5) The period specified in the notice shall not be less than one month from the date of the notice.
    (6) The applicants shall publish the notice in such manner as may be specified by the Secretary of State, and the cost of any publication of the notice may be defrayed out of the property of the trust.
    (7) Before making the order the Secretary of State shall take into account any representations duly made in accordance with the notice.
    (8) This section does not apply in Scotland."

    I beg to move. That this House doth agree with the Lords in the said amendment.

    With this it will be convenient to take Lords Amendments No. 55 and 61.

    In response to an amendment moved during Report stage by my hon. Friend the Member for Welwyn and Hatfield (Mrs. Hayman), I said that the Government were sympathetic to the intention underlying the amendment which was concerned with charities, although for a number of reasons it could not be accepted as it stood. I said that the Government proposed to introduce an amendment relating to educational trusts, and the new clauses fulfil the undertakings that I then gave.

    The new clauses permit trustees of educational trusts whose objects are restricted to benefiting persons of one sex to apply to the Education Ministers for an order removing or modifying the restrictions so that the benefits can be made available to persons of the other sex. The Government believes that the new clauses are in accordance with the spirit of the Bill. They will enable, for example, trustees providing scholarships for men only to apply for approval to make them available also to women. They will also make it easier for the trustees of an independent single-sex school to move towards co-education.

    New Clause D relates to England and Wales. New Clause E is a separate clause relating only to Scotland and is designed to take account of the different legal framework governing educational charities in Scotland. Amendment No. 61 is consequential upon the new clause. The intention is that orders made under the new Clause D are not, with the exception of orders modifying enactments, to be subject to the procedural requirements of sub-sections (1) and (2) of Clause 76. In Scotland, schemes for the reorganisation of educational endowments under Part VI of the Education (Scotland) Act 1962 are normally made by statutory instrument unless they relate to a small endowment—that is, one with an annual value of less than £500—in which case a simplified procedure applies. Amendment No. 61 also ensures therefore that similar procedures apply to orders under new Clause E.

    Question put and agreed to.

    Subsequent Lords amendment agreed to.

    Clause 75

    Power To Amend Certain Provisions Of Act

    Lords amendment: No. 56, in page 46, line 7, leave out from "and (3)" to end of line and insert "( Discrimination: Consent for assignment or sub-letting) (2) 31, 33, 34, and 42 to 45 ( Discriminatory training by certain bodies) and 46"

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will be convenient to take Lords Amendments Nos. 57 and 58.

    These amendments have two main purposes. First, they update Clause 75 to take account of the new clauses which have been added to the Bill both here and in another place. The amendments add to the provisions already covered in Clause 75(1)(a): subsection (2) of new Clause A, the new clause relating to consent for the assignment or subletting of premises; Clause 33, the voluntary bodies exception; Clause 45, the communal accommodation exception; and new Clause B, the clause dealing with discriminatory training. These are all new exceptions which may need to be amended in the light of experience. The amendments also add new Clause A to the clauses specified in clause 75(1)(b).

    The second purpose of these amendments is as follows: Amendment 57 provides that four provisions will be subject to amendment or repeal by order made by the Secretary of State. Such orders, like the other orders which may be made under Clause 75, will be made by statutory instrument subject to an affirmative resolution of both Houses of Parliament.

    The four exceptions concerned are political parties—Clause 32, elective bodies of trade unions—new Clause C, the exception for provisions relating to death or retirement in partnerships—Clause 11(4) and the exception for provisions relating to death or retirement as they affect trade unions and other bodies in Clause 12(4).

    Question put and agreed to.

    Subsequent Lords amendments agreed to.

    Clause 76


    Lords amendment: No. 59, in page 46, line 24, leave out "46(2)( b)" and insert

    "( Discriminatory training by certain bodies) (4)( b)"

    6.0 p.m.

    I beg to move, That this House doth agree with the Lords in the said amendment.

    This is a drafting amendment consequential upon the amendments to Clause 46 which we discussed earlier.

    Question put and agreed to.

    Subsequent Lords amendments agreed to.

    Clause 78

    Transitional And Commencement Provisions, Amendments And Repeals

    Lords amendment: No. 63, in page 50 line 28, at end insert—

    "(5) An order under this section may make such transitional provision as appears to the Secretary of State to be necessary or expedient in connection with the provisions thereby brought into operation, including such adaptations of those provisions, or of any provisions of this Act then in operation, as appear to the Secretary of State necessary or expedient in consequence of the partial operation of this Act."

    I beg to move, That this House doth agree with the Lords in the said amendment.

    The amendment relates to the Secretary of State's power to bring in the Sex Discrimination Act by Commencement Order and seeks to empower him to make transitional adaptations of provisions in the Bill. This power is needed as a consequence of Lords Amendments Nos. 73 and 76 to Schedule 1, which are designed to incorporate the provisions relating to equal access to occupational pension schemes into the Equal Pay Act. The equal access provisions will not take immediate effect. They have to run in line with the Social Security Pensions Act and that is why the transitional power is needed.

    Question put and agreed to.

    Clause 80

    Application To Crown

    Lords amendment: No. 64, in page 50, line 40, leave out "Subject to section 17".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    With this it will be convenient to take Lords amendment Nos. 65, 66, 67, 68, 69, 70, 71, 72, 74 and 75.

    The main purpose of this group of amendments is to carry out the Government's intention to include in the Bill a clause creating a general duty on a Minister of the Crown or Government Department not to discriminate in considering persons for, and in making, public appointments. The Government intend by the new Clause F which would be inserted by Lords Amendment No. 70 to make an unequivocal declaration of public policy in this matter.

    The new clause applies to offices held by persons appointed by Ministers of the Crown and Government Departments where there is no relationship which is properly analogous with an employer/employee relationship between the person appointed and the appointing Minister or Department. Subsection (2) introduces a duty not to discriminate in the arrangements for considering and making appointments, and provides that this duty shall not extend to a case in which such discrimination would not be unlawful under Part II if the Crown were the employer. In the nature of things this kind of public duty is not capable of enforcement under Part II of the Bill, but there is the possibility of enforcement by prerogative writ under Clause 59.

    All the other amendments—except part of Lords Amendment No. 68 which I will come to in a moment—are in some sense consequential on the new clause. Lords Amendments Nos. 64 to 67 and 69 and that part of Lords Amendment No. 68 which deletes the existing subsection (3) clarify the application of Clause 80 so that it applies only to "service of the Crown" which in substance involves an employer/employee type of relationship.

    Lords Amendments Nos. 71, 72, 74 and 75 to Schedule 1 keep the Equal Pay Act in step with Clause 80, since both of these relate to employer/employee relationships.

    That leaves the part of Lords Amendment No. 68 which deals with armed services cadet forces. The purpose of this amendment is to enable the cadet forces to be opened to girls on a controlled entry basis.

    Question put and agreed to.

    Subsequent Lords amendment agreed to.

    Schedule 1

    Equal Pay Act 1970

    Lords amendment: No. 73, in page 53, line 19, leave out from "childbirth" to end of line 20 and insert—

    "(1A) An equality clause and those provisions—
  • (a) shall operate in relation to terms relating to membership of an occupational pension scheme (within the meaning of the Social Security Pensions Act 1975) so far as those terms relate to any matter in respect of which the scheme has to conform with the equal access requirements of Part IV of that Act; but
  • (b) subject to this, shall not operate in relation to terms related to death or retirement, or to any provision made in connection with death or retirement."
  • I beg to move, That this House doth agree with the Lords in the said amendment.

    With that amendment it will be convenient to take Lords Amendment No. 76.

    The purpose of these amendments is to incorporate into the Equal Pay Act 1970 provisions which will extend the requirement of equal treatment for men and women so as to include terms and conditions of employment relating to access to membership of an occupational pension scheme. The provisions were previously included in the Social Security Pensions Bill. This provision will come into operation at the same time as the corresponding provisions of the Social Security Pension Act, that is to say, in April 1978.

    Question put and agreed to.

    Subsequent Lords amendments agreed to.

    Schedule 2

    Transitional Exemption Orders For Educational Admissions

    Lords amendment: No. 77, in page 62, line 29, leave out from "Commission" to" unless" in line 30 and insert

    "on any application under paragraph 6 may if they think fit make a transitional exemption order, but shall not make such an order".

    I beg to move, That this House doth agree with the Lords in the said amendment.

    The amendment corrects an omission from the Scottish paragraphs of the schedule.

    Question put and agreed to.

    Schedule 3

    Equal Opportunities Commission

    Lords amendment: No. 78, in page 65, line 10, at end insert—

    " Proceedings and business

    10A.—(1) Subject to the provisions of this Act, the Commission may make arrangements for the regulation of their proceedings and business, and may vary or revoke those arrangements.

    (2) The arrangements may, with the approval of the Secretary of State, provide for the discharge under the general direction of the Commission of any of the Commission's functions by a committee of the Commission, or by two or more Commissioners.

    (3) Anything done by or in relation to a committee, or Commissioners, in the discharge of the Commission's functions shall have the same effect as if done by or in relation to the Commission."

    I beg to move, That this House doth agree with the Lords in the said amendment.

    The purpose of the amendment, which was prompted by an amendment tabled in another place by Lord Colville, is to make express provision enabling the Equal Opportunities Commission to make arrangements for the conduct of its business, including the delegation of its functions.

    Question put and agreed to.

    Subsequent Lords amendment agreed to.

    Schedule 4

    Transitional And Commencement Provisions

    Lords amendment: No. 80, in page 66, line 23, leave out from beginning to "section" in line 24, and insert "3.—(1)".

    I beg to move, That this House doth disagree with the Lords in the said amendment.

    I intend at the appropriate time to move the amendment on the Order Paper in lieu of Lords Amendments Nos. 80 and 81. The Government's substitute amendment will have the effect of leaving the substantial intention of the Lords amendments in the Bill. It is intended that in future the Equal Pay Act should apply to terms of employment relating to marriage in the same way as it applies to other terms of employment. However, it is also intended that, where an employer has an obligation to pay a marriage gratuity to a female employee under a contract made before the Sex Discrimination Act received Royal Assent, he can honour that obligation without incurring a similar obligation in respect of male employees.

    The intention of the other House was that the amendments should allow this policy to be implemented without allowing other forms of sex discrimination in matters related to marriage, which are contained in existing contracts of employment, to be excluded from the provisions of the Act. Unfortunately, owing to a subsequent amendment made in another place, these amendments are now technically defective. The Government amendment will secure the intention of the Lords amendments whilst removing the defect therein contained.

    Question put and agreed to.

    Question put and agreed to.

    Subsequent Lords amendment disagreed to.

    Amendment made to the Bill in lieu of Lords Amendments Nos. 80 and 81:In page 66, line 23, leave out paragraph 3 and insert—

    '3.—(1) Section 6 of the Equal Pay Act 1970 (as amended by paragraph 3 of Schedule 1 to this Act) shall apply as if the references to death or retirement in subsection (1A)(b) of the said section 6 included references to sums payable on marriage in pursuance of a contract of employment made before the passing of this Act, or the commutation, at any time, of the right to such sums.
    (2) In relation to service within section 1(8) of the said Act of 1970 (service of the Crown) for the reference in this paragraph to a contract of employment made before the passing of this Act there shall be substituted a reference to terms of service entered into before the passing of this Act.'—[Mr. John Fraser.]

    Schedule 5

    Minor And Consequential Amendments

    Lords amendment: No. 82, in page 66, line 29, at end insert—

    'Factories Act 1961 ( c. 34)

    1. In section 15(2) (unfenced machinery: operations carried out by specified male persons) the word "male" shall be omitted."

    The Registration of Births, Deaths and Marriages (Scotland) Act 1965 ( c. 49)

    2. In section 21(6) for the word "woman" there shall be substituted the word "person".'

    I beg to move, That this House doth agree with the Lords in the said amendment.

    On Report, I gave an undertaking that we would try to seek amendments to operate this protective legislation on an equal basis, but I pointed out that there might be some difficulty over Section 20 of the Factories Act. The amendment fulfils the undertaking in general, but, as I forecast, it proved too difficult to amend Section 20 of the Factories Act in this Bill. However, as I also promised the House on Report, we have accordingly made a request to the Health and Safety Commission to undertake an early review of this section of the protective legislation. I am advised that the matter can be dealt with only in that way.

    Question put and agreed to.

    Remaining Lords amendments agreed to.

    Price Code

    On a point of order, Mr. Speaker. The Secretary of State for Prices and Consumer Protection is not yet here to move the Price Code order. May we have your guidance? What happens when a Minister fails to attend? Does it mean that the House should adjourn or go on to other business?

    Further to that point of order, Mr. Speaker. I was about to raise a point of order myself, but on second thoughts, following the arrival of my right hon. Friend the Secretary of State for Prices and Consumer Protection, my point of order might be bogus and therefore I shall not detain you any longer.

    6.12 p.m.

    I apologise to you and the House, Mr. Speaker, for being delayed. I am afraid that the message that reached me was rather misleading, indicating that the consideration of the Lords amendments to the Sex Discrimination Bill was expected to last another 45 minutes. I apologise if I have caused any difficulty to the House.

    I beg to move,
    That the Counter-Inflation (Price Code) (Amendment) (No. 2) Order 1975 (S.I., 1975, No. 1293), a copy of which was laid before this House on 5th August, be approved.

    With this we shall take the Opposition Prayer on the Order Paper,

    That an humble Address be presented to Her Majesty, praying that the Counter-inflation (Notification of Increases in Prices and Charges) (Amendment) Order 1975 (S. I., 1975, No. 1294), dated 4th August 1975, a copy of which was laid before this House on 5th August, be annulled.

    We are debating the orders concerned with the changes to the Price Code that are required as a result of the discussions on the Counter-inflation policy which the House held in July. It would be best if I were to begin by outlining the effects of the two orders.

    The first is the Price Code order itself, which amends the Price Code by strengthening the sanction against excessive pay settlements. It ensures that all firms subject to the code are prevented from passing the costs of an excessive pay settlement through into their prices. The order makes separate provision for each of the relevant sections of the code.

    With regard to manufacturing and service firms, the largest proportion of the total, the costs of excessive settlements are to be disallowed in the operation not only of the normal allowable costs but also of the low-profit safeguards in the code. To override the safeguards in this way may seem Draconian to some, but having improved the safeguards as a result of our review of the code last year, and thus making them accessible to larger numbers of firms, we could not contemplate immunising such a significant section of industry from the effect of the sanctions. By applying the sanctions to all firms which breach the limit, whatever their profit situation, we intend to leave negotiators with no illusion as to the effects on their firm or industry of exceeding the pay limit.

    For firms using escalation, or variation of price clauses, such as the construction industry, the cost of excessive settlements will be disallowed from price increases under these arrangements, and the order makes it clear that the disallowance will also apply to variation of price contracts which are governed by indices, where the indices reflect costs arising from excessive settlements.

    For distributors who are not covered by normal allowable cost rules and who invoke the low-profit safeguards the code will prevent any increase in gross profit margins to compensate for the increased costs of an excessive settlement. In other words, the gross profit margin will not be allowed to reflect excessive settlements.

    For distributors whose profit margins are above the safeguard levels no extra provision is needed to apply the sanction, because they would in any case be forced to absorb the costs of an excessive settlement from their existing profit margins.

    For nationalised industries the sanction will apply in the same way as for the private sector, as a deduction either from an industry's allowable cost increases or from price increases justified under the provisions which permit a surplus of 2 per cent. on turnover or a 10 per cent. return on net assets.

    Finally, for firms whose labour costs form less than 15 per cent. of total costs—and I acknowledge that these may include not only capital-intensive firms but those whose labour costs are small for other reasons, such as a high raw material content—the disallowance of cost increases will be increased to achieve the same effect on these firms' margins as if labour costs had represented 15 per cent. of their total costs. In other words, the minimum amount considered to be allowable for labour costs will be 15 per cent., and that will be allowed for even if the firm spends less than that on labour, even in the event that it breaks the guidelines.

    The order also includes a separate provision of concern to the self-employed. It re-establishes control over the self-employed whose business expenses amount to less than 10 per cent. of their profits or gains. All those whose business expenses amount to more than 10 per cent. of their profits or gains are already covered by the Price Code as it at present exists. A pay limit makes little practical sense for people in this group, but we thought it right to bring them back within the scope of price control—where they were a few months ago—at a time when wage and salary earners are being asked to make sacrifices as regards their pay increases.

    I turn now to the second order. Procedural requirements have aroused more interest and caused greater difficulty in the House in some ways than the form of the sanction itself. This is understandable because prenotification affects all manufacturing and service firms with sales of over £5 million—that is to say, the great bulk of British industry—and because it is not easy to strike a balance between the need to ensure adequate scrutiny of pay settlements which enter into price increases and the desire to avoid unnecessary delay which could affect a firm's cash flow because it cannot pass on legitimate cost increases. After full discussion with the CBI and the Price Commission I hope that we have now struck the right balance.

    Hon. Members will be interested to know what has developed out of the discussions which took place during the recess. They will recall, as this was fully debated in July, that the procedure involves the submission by firms to the Price Commission of data about the pay settlements which enter into their price notifications.

    The commission passes the information about a pay settlement to the Department of Employment, which looks at the settlement to see whether it conforms with the pay limit. If, in the light of that investigation and also of any further discussions which may be initiated by the firm or the Department, it appears to the Department that the settlement has exceeded the limit, the Secretary of State for Employment issues a certificate to the Price Commission, which will then operate the sanction, refusing to allow the cost of such a settlement to be reflected in a price increase.

    The problem has been to provide for adequate time for the notification period stage, to ensure a proper scrutiny of new information about a pay settlement, and to enable further information or clarification to be sought from the firm concerned in case of doubt. The House will know that the present normal period of notification is only 28 days for the price increase. This additional cycle of activity can make that 28 days inadequate.

    In the consultative document which we were debating in the House just before the recess, I proposed a clock-stopping arrangement which would have meant that the time taken to obtain and assess further information from a firm would not count against the normal 28-day notification period. In other words, if a firm took more than 28 days, the clock would be stopped for the additional time.

    Because of the administrative difficulties and uncertainties which clock stopping involves—it is in many ways an artificial procedure—we considered another alternative which might be effective, that of allowing a 56-day period of notification, but taking away from that period any number of days before the lodging of a price application in which firms had voluntarily lodged information about their relevant pay settlements. In other words, if a firm lodged information about its pay settlements 20 days before the beginning of the price notification period of 28 days, there would be only an additional period of eight days which would be counted against it.

    However, the CBI assured me that it would much prefer to urge its members to make full use of the voluntary advance procedure under which firms may send information about relevant pay settlements to the Price Commission anything up to 28 days in advance of their price notifications. Thus, a firm can send details about a pay settlement, or for that matter about an intended pay settlement, at any time in the month before that in which it intends to make a price application. The CBI argued that an extension of the statutory 28-day notification period would be equivalent to tougher price controls for all firms, whether or not they comply with the Counter-inflation policy, and that this was not the Government's intention in introducing this sanction.

    I have, therefore, accepted the CBI assurance that it would urge firms which are members of the CBI to use the voluntary procedure, on the understanding that in the few cases which may occur where the advance procedure is not used, and where clearance of the price notification might not be completed within the statutory 28 days, the firm might have to delay its price increase or it might have to face the risk of an order from the Price Commission to roll back its prices if a settlement subsequently turned out to be outside the guidelines of the Counter-inflation policy.

    Basically, what we have got is a voluntary policy under which firms would be allowed to notify pay increases up to a month before they put in a price application. It is understood between the CBI and myself that if these arrangements do not work satisfactorily the CBI will accept the inevitability of reverting to one of the other alternative policies—that is, either clock stopping or a lengthening to 56 days. All of this has been set out in the published exchange of letters between the Director-General of the CBI and myself. I will go into the details a little later, but I am bound to say that this proposal is working quite well.

    We have now had the first indications of how the policy is working. The position is that a good many firms are using the advance procedure. It is fair to say that a growing number of firms are doing so, evidently as they learn about it. Until 6th October, the last date for which I can give the House information, the Price Commission had referred to the Department of Employment 163 price notifications in which there were increases in remuneration since the White Paper was introduced. In that period of 163 price notifications, there were 155 advance notices of pay information.

    The House must recognise that this is not exactly a parallel figure because some of the notifications of pay settlements could be related to price notifications that have not yet been received. Some of them, in other words, are within the 28-day period before a price application is lodged. It does show a high corelation between price applications and voluntary information about pay settlements. This was something about which I know the hon. Lady and her colleagues were concerned during our July debates. I am pleased to say that it appears to be working pretty well.

    Can the right hon. Lady say whether she has disallowed any of those price determinations on the grounds of pay settlements being above the White Paper level?

    If the hon. Gentleman will allow me I will deal with that point a little later. First, I want to deal with one or two other important points which I wish to record for the purpose of assisting firms in this exercise.

    There will be far more notifications within the next few months because the period of pay settlements is now upon us. Both in November and December, particularly November, there are a good many pay settlements due to be made under the 12-month rule. We urge firms as far as possible to use the voluntary procedure and, wherever they can, to give the full 28 days notification or as close as possible to that so that this voluntary procedure can go on as smoothly as it has up to now. If the trend continues I am hopeful that the voluntary procedure will work so smoothly that there will be no need to resort to any extension of the period.

    I want to say a word about the information that is required from firms regarding pay settlements. It may be alleged that this information appears formidable. Indeed it has been so alleged in an article which appeared recently in The Times. I do not deny that it imposes burdens upon firms, although we have done our best to minimise requirements so as to make them consistent with effective scrutiny. The Price Commission has issued a pro-forma to firms to assist them in presenting the information needed. We have had a good many indications from the firms that they welcome this help from the Commission. It is also fair to say that the information required is substantially less than the information required for the purposes of the old Prices and Incomes Board or its successors. We intend to try to keep the information needed as simple as we possibly can.

    May I say a word about the last order which is not before us—No. 1295? It is one which we do not have to debate for statutory purposes and deals with the requirement of firms which do not have to prenotify but have to make regular reports to the Price Commission or which have to keep records to show what their pay settlements have been.

    We recognise that the CBI, while it does not particularly like this extra burden, has very much welcomed the counter-inflation policy and has shown a willingness to co-operate with it.

    I will now tell the hon. Gentleman that there has been no case, up to now, of a firm having to notify to the Price Commission. There has been no case yet in which the Price Commission has found that a settlement has been outside the guidelines of the Counter-inflation policy. That does not mean to say that there may not be such cases. I wish to make it clear that, if there are, it will certainly be my responsibility, as one of the Ministers involved, to make quite certain that there will be a full application of the sanctions against any such firm. This is because I believe it to be overridingly in the national interest that the Counter-inflation policy should work. I want to make no bones about that. It is overwhelmingly in the interests of both sides of industry, the nation and the House that we achieve a major reduction in the rate of inflation.

    The House will want to know how things are progressing. It is fair to say that a deceleration in the rate of increase in labour costs means, among other things from the point of view of companies, that the productivity deduction bites less hard on their margins. Therefore the policy advanced is very much in the interests of growth and future investment.

    I turn now to the figures for inflation to bring the House fully up to date. In August, as the House will be aware, the year-on-year figure of increase was 26·9 per cent., but the three-monthly figure, on an annual rate, had fallen from the 53 per cent. of May, about which the hon. Lady was understandably scathing, to 32·6 per cent. in July and then to 152 per cent. in August—the lowest three-monthly rate since last October.

    I take the three-monthly rate as well as the annual rate so that the House will know that I am not trying to play with figures, but it is fair to look at both because it is fair to look at the trend as well as the year-on-year figures. I will whenever possible give the House both so that we can argue which is the more representative.

    It is also fair to say that there are encouraging notes in respect of wholesale price increases in the case of manufactured goods, both on a monthly and on a three-monthly basis. The figure of increase in September was the smallest since the second quarter of 1973. That gives us good reason to believe that the present deceleration of price rises over the last three months will continue in the immediate future.

    I wish that I could be as sanguine about raw material and fuel prices. Alas, I cannot. The House will know that the OPEC countries decided to increase crude oil prices by an average of 10 per cent. and that oil is a basic material for many of our industries, including food manufacturing and the whole of distribution.

    World food prices have also been hardening recently, especially of wheat from North America and of dairy products and meat, partly because of poor harvests in some parts of the world such as the Ukraine and partly because of the entry of very large purchasers on a substantial scale into the North American markets for grain. It would be pointless to suggest that this country is not affected substantially by deals with which it may have nothing to do between large purchasers and large suppliers of grain.

    At home, both the potato and the vegetable crops were adversely affected by the summer's long drought.

    In August, materials and fuel bought by the food manufacturers went up by 7½ per cent., in September by 3 per cent. Although the inputs in manufacturing industry, as distinct from food, rose rather less, there was an increase of 6½ per cent. in the third quarter, which again was the highest for at least six quarters, I think I am right in saying.

    All this means that there are still costs in the pipeline, including some past pay settlements as well, which are not yet fully reflected in prices. So we shall see, or are seeing, a marked and substantial improvement at present. It would be optimistic to suppose that there will not be a further hump to be got through, most of it the result—[Laughter.] The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) laughs, but he should not laugh because this is a matter of the most intense concern to this country. I hope that he will not laugh, because it cannot be in the interests of hon. Members on either side to regard an increase in raw material and oil prices as being in the interests of this country. I do not much care what one's politics are when I say that: it is bound to be the case.

    I hope that that hump will be the last hump and that, by the turn of the year—I have said this before—the improvements which flow from the considerable slowing down in commodity price increases—not a straight fall, but a slowing down in the rate of increase—the lower pay settlements and, it has to be added, the considerable squeeze on company profits over the last few quarters, will all be reflected in prices. I have little doubt that that will be so.

    On the pay side, the Government's Counter-inflation measures have received a widespread welcome. Hon. Members will know that during the recess there was a substantial demonstration of support by the trade union movement in September when the General Council's report, "Developing the Social Contract", was carried by more than two to one. Since that vote, a number of unions which opposed it, including such substantial unions as USDAW and SOGAT have announced their intention of supporting the policy despite having gone on record as part of the minority at that time.

    It is still early days in the new pay round, but the agreements already made are very encouraging. They cover about 1½ million workers in a wide range of occupations—local authority manual workers, workers in the grocery trade, both of them relatively low-paid, but also plumbers, bakers, shipbuilders and a substantial section among car workers who would not normally be described as being in the low-paid category. All of these have accepted settlements in accordance with the policy. In some cases, this acceptance has involved a complete renegotiation of an existing pay settlement to bring it into line with the policy. Hon. Members should not be unaware of what a difficult exercise that can be.

    I repeat that in no case so far has it been necessary to impose a sanction under the price code, but I am not so sure that I can continue to be so sanguine in the immediate future. I hope so, because it is in the interests of all concerned that we should not have to use that sanction if it can be avoided.

    I should now like to say something about a number of Press reports which have appeared on the general subject of the Price Code. I hope that the hon. Member for Gloucester (Mrs. Oppenheim) will agree that this would not be an appropriate evening to discuss the future of the Price Code in great depth and that she will not hold it against me if I, therefore, do not do so, but it would be helpful if I said a few words about how I see the future of price policy developing.

    First, it is not my intention to make any fundamental changes in the price controls before the end of the current phase of the pay and prices policy, which lasts only till next summer. Indeed, it would be extremely foolish to do so. We made it clear in our White Paper, "The Attack on Inflation", that we believed it to be essential to keep price increases to a minimum and to maintain a strict control of the Price Code and the Price Commission. For that reason, we took powers under Section 2 of the Remuneration, Charges and Grants Act to extend by order price control powers to the end of July 1976 and, if absolutely necessary, to the end of July 1977.

    I do not want to give the impression that I would wish to go till the summer of 1977. Obviously, prices policy must be closely related to how the economy develops. It is, frankly, too early to say at this stage what the shape of price controls will or should be after the summer of 1976. It is too early for a straightforward reason, which will, no doubt, be adduced by others contributing to the debate—that we do not yet know and cannot yet guess whether the targets in the Counter-inflation policy will actually be achieved.

    If they are achieved, and if we do get inflation down to 10 per cent. by the summer of 1976—as I have said, we are at least on a reasonable course to achieve that—the Government, the CBI and the TUC will want to do everything possible to encourage worth-while investment and create new jobs by the summer. The present Price Code is not appropriate either to a period of recession, or, for that matter, to a period of encouraging manufacturing and distributive investment. So I would not suggest that the Price Code in is present form would be the right answer if we can move rapidly towards growth by next summer.

    Equally, because I do not know whether we shall have achieved that state so quickly, and also because there are circumstances, beyond the control of any British Government, which might determine how rapidly that target might be achieved, it would be the height of foolishness for me to make a statement about the look of price controls in the summer. What I will say—I have said it before—is that it will be of the highest priority to move as soon as we can on to the basis of more rapid growth and of higher investment.

    I recognise that the Price Code will have to be changed for that purpose but the primary job must be and still is, in the Government's view, that of defeating inflation. For this purpose, we do not believe that a major relaxation of the Price Code at this time would be appropriate. The achievement of our target depends upon the contribution that both the unions and industry can make. So it is to some extent in the hands of both sides of industry—though not totally, for the reasons I have indicated—whether we achieve that target and how quickly we can reach a position from which we can again begin to grow and to encourage investment.

    6.39 p.m.

    I beg to move,

    That a Humble Address be presented to Her Majesty—

    Order. The hon. Lady must speak first to the motion of the Secretary of State. She can discuss the two motions together, but the formal movement of her motion must come later.

    It is probably for the convenience of the House that we discuss the two orders together. Having said that, I must protest strenuously at the outrageous way in which the House has been treated over this debate. These orders are complex, significant and far-reaching in their effects, yet this is the first opportunity that the House has had to discuss them, over two months after they have been in force, and probably only for a short period.

    Does the hon. Lady think that we should have recalled Parliament to discuss these orders? The attendance in the Chamber hardly suggests that would have been the view of Parliament.

    The orders should have been discussed before the recess, and they would have been if the Government had not been suffering from legislative indigestion. They are very important orders, and when my right hon. Friend the Leader of the Opposition made representations to the Leader of the House, he indicated on a number of occasions that ample time would be made available for this debate. These orders are, after all, the nuts and bolts of the Government's Counter-inflation policy and, in some ways, are even more important than the Act itself. We were assured that we would have ample time to discuss them, possibly before they came into effect. During the proceedings on the Remuneration, Charges and Grants Bill, we received a number of unsatisfactory replies from the right hon. Lady. Some were contradictory and confusing and, when we expressed our concern, she indicated that there would be ample time to discuss the orders. She said:

    "The details are open to change and are likely to be filled out before an order is made. There will be a closer definition of what is meant by a settlement and how large a group will constitute a group for the purposes of a settlement. All the matters will be discussed by Parliament."—[Official Report, 24th July 1975; Vol. 896, c. 1158.]
    These matters were not discussed by Parliament before the orders were laid or the regulations came into force. If the Opposition had not tabled a Prayer against one of the orders tonight, it could not have been discussed at all. This is typical of the way the Government have handled every aspect of their Counter-inflation policy. The way this debate has been handled bears all the familiar trade marks. These orders have come before the House late and we did not have an opportunity to discuss them before they came into force.

    The orders representing the legal implementation of the Government's pay policy and this debate, coming as it does a year and a week after their re-election, will loom from this Session of Parliament like a tombstone on the grave of their broken promises and their complete failure to contain inflation.

    The Secretary of State presented the orders with her customary attention to detail and her customary expressions of concern about inflation, but she can take little comfort and deserves none from the fact that 20 months after she took office, we now have the situation, where we are told that for the first time since the 1930s some of the poorest families in this country are going hungry and the price index for the lowest paid is rising faster than for anybody else. That is hardly an achievement in terms of social justice.

    How can we take seriously the Government's expressed determination to tackle inflation when their own spending is at such terrifying levels and the public sector borrowing requirement has not been adequately curtailed? Even the reference in the orders to the £6 pay limit throws doubt on the Government's policy. The White Paper, Prime Ministerial statements, answers to questions and that circumventive document that was pushed through all our letterboxes, have proclaimed that the £6 is a limit and not an entitlement and that some employers might not be able to pay it. I ask the House to note those words, "some employers may not be able to pay it".

    It is true that USDAW has settled for £5·20 a week, but this represents a pay increase of more than 20 per cent. and will put £30 million on the country's food and grocery bill. We are told that it is considerably more than the union would have settled for outside the contents of this policy. Since then, local authorities have been called on to pay the full £6 without a word of dissent from the Government and with nearly the whole bill to be borne by ratepayers.

    Is that what the Government mean when they talk of protecting people against inflation? I should like to ask the Secretary of State whether, in the sense that this is meant in the Government's pamphlet, she believes that nationalised industries are able to pay the full £6. Their prices have gone up twice as fast as prices in the private sector and the pay of their workers has gone up even faster. They have enormous losses and even larger debts. Are the consumers and the taxpayers to be left to pay that bill? The House and the country will welcome an indication from the right hon. Lady whether she thinks that nationalised industries are able to pay the full £6, because there is nothing in these orders to restrain them. The rules for conformity with the Price Code have been tightened as far as nationalised industries are concerned, but we have still seen nothing like the imposition of cash limits on the nationalised industries about which the Chancellor of the Exchequer spoke during the debate on the White Paper. It would be interesting to hear the Government's proposals. Until they are made, this policy is virtually meaningless as far as nationalised industries are concerned.

    It is time that the Government made clear their position, too, and their policy on whether the £6 is a limit or an entitlement. The Secretary of State referred to the decision of the TUC, but the Congress has only agreed on a £6 entitlement. It would be interesting to know whether that is now the Government's policy since they have claimed an agreement with the TUC.

    I am as aware as anyone else of the need to help the lower paid. However, are the Government and the TUC, in their expressed concern for the lower paid, going to give an undertaking that, if the policy in these orders is used as a method of levelling up for the lower paid, we shall not have that used as a springboard for the restoration of differentials next year with a resulting further fierce burst of inflation which would erode any benefit to the lower paid?

    It may suit the Government to speak with a forked tongue on these matters, but until they make clear their position, they have not got a policy. And references to £6 in these orders are highly inflationary, especially when we are now re-importing our own home-bred inflation through higher raw material prices caused by the fall in the value of the pound and the fact that the Government have allowed inflation to run riot for the past 20 months. Now we are perhaps more vulnerable than any other developed nation in the world to every rise in oil prices and every tremor in the commodity markets. The Government have brought us to the point where every cold breeze that blows can give us pneumonia.

    In the early part of this year, commodity prices were falling quite fast, but inflation in this country was going up even faster. How can my hon. Friend feel that commodity prices affect the rate of inflation after that unpleasant experience?

    At that time, pay was rising extremely quickly. We have now missed the boat and are likely to find that, even if pay is restrained, we shall have to take on board not only high prices for commodities but even higher prices because of the fall in the value of the pound. We have the worst of all worlds.

    There is now real doubt whether the Government's target figure for the end of next year can be reached and the shadows of the International Monetary Fund are lengthening daily, with all that that implies. Yet still we get half-truths, half-policies and non-policies from the Government. These orders are just part of the charade which their policy has become. They represent a bureaucratic tangle of complicated rules and regulations, the main purpose of which is to make one sector of the community believe that Government policy is what it is not, while making the other sector believe that the policy is not what it is.

    The most important and overriding impression one gets from the regulations is that their complexity and their very nature highlight the fact that the Price Code itself is a totally unsuitable vehicle for pay restraint. In view of the time which has elapsed since the Remuneration, Charges and Grants Act was before the House it might be propitious now to remind the House of the assurances the Secretary of State gave on that occasion, with perhaps less than her usual candour, that the effect of Section 3 would be very little different in the imposition of sanctions on employers than those provisions already existing under the previous Act and under the Price Code. She said,
    "There is nothing new in the way of sanctions in this legislation, despite what some hon. Members seem to think."
    She also said of hon. Members,
    "they will be aware that nothing proposed in the Bill goes beyond that Act with respect to the possibility of the creation of criminal offences or the possibility of penalties against employers or employees."—[Official Report, 24th July 1975; Vol. 896, c. 1120–21.]
    What she omitted to say was that as the Price Code is now being used for something entirely different from that which was originally intended, there is all the difference in the world, particularly since companies can now be penalised for something over which they might have no control.

    Having given repeated assurances that the powers under Section 3 were not likely to be used to enable further amendments to the Price Code and new sanctions to be imposed, the Secretary of State had to concede, following an amendment we moved to the Bill, that there could be further amendments and new sanctions under the powers taken in the Bill, and that we have not seen the last of amendments to the Price Code yet. This evening she has tried very clearly to explain and describe the regulations as best she can, but they are very complex and so obscure that two documents of guidance have already been published, one by the Price Commission and one by the CBI.

    I am afraid that they will still be very obscure to many companies and I wonder whether the Government have thought for a moment just how high will be the cost of all this additional record keeping and the provision of information, required especially for companies in category 3 and below. Many of these companies and distributors will have to collect this information and keep these records for the first time, and they will have to carry this burden on top of the additional burdens that the right hon. Lady imposed upon them last year.

    Even category 1 and 2 companies will have to avail themselves of continuing specialist professional advice, and that is very expensive. Like category 3 companies they will have to make available more information more often. It will need to be extremely detailed and will relate both to the irrelevant as well as the relevant pay settlements. As all that will come under the category of allowable costs the expense will be passed on in higher prices, and so that makes the whole exercise seem slightly counterproductive.

    However, the companies will be grateful to the Secretary of State for the concession she has given over the non-imposition of the 56-day limit between notification of pay settlements and the implementation of price increases. This period is to be restored to the existing 28-day pre-notification period. Nevertheless, this is a very temporary concession for a trial period. Its continuance will depend on the extent to which companies are able to avail themselves of the voluntary early notification period.

    Paragraph 3.9 of Price Commission data sheet No. 15 makes quite clear how qualified this concession is. No assurance is given that these delays will not take place. All that is said is that if companies avail themselves of the voluntary procedures the risk of delay will be reduced. That is nothing like a bankable assurance. I do not need to say how damaging—how irretrievably damaging in some cases—these delays will be.

    What of the decision about pay settlements? Once again we are obliged to the data sheet which says in paragraph 2.7 that the decision whether pay settlements are or are not within the limits is a matter solely for the Secretary of State for Employment. I am sure that that revelation will hardly fill everyone with a great deal of confidence when they remember with what zeal the right hon. Gentleman defended every obvious breach of the social contract, and we all know what the consequences of that have been. If he is to be the sole arbiter of every pay settlement he will be very busy indeed.

    This brings me to a relevant and disturbing point raised in a memorandum presented to the right hon. Lady last July by the Consultative Committee of Accountancy Bodies. It was claiming that there was no adequate definition of a pay settlement because there was no statement as to what groups constitute the subject of separate settlements where composite pay agreements affect several groups. In Committee the right hon. Lady gave assurances in column 1103 on 24th July that if further guidelines were sought from her Department the Department would be very pleased to provide them. Later in that debate she said:
    "There will be a closer definition of what is meant by a settlement and how large a group will constitute a group for the purposes of a settlement ".—[Official Report, 24th July 1975; Vol. 896, c. 1158.]
    But all we know from the definition in the orders is that any settlement for a group of 100 employees or more is a notifiable settlement, and that does not meet the point put to the right hon. Lady in the document submitted to her by the accountancy bodies. Nor does the only other definition in Statutory Instrument 1294 on remuneration of employees. It is a pity that the right hon. Lady has not found it possible to enlarge on this definition. Where the effects of a policy can bear beavily and unfairly on companies with, in some cases, disastrous effects for the company and its employees, the least one has a right to expect are definitions which can be simply interpreted and over which there should be no confusion at this late stage.

    Then there is the considerable effect of incremental payments on costs and prices. Where these are very substantial they will appear unfair to those whose pay is much more restricted. The Secretary of State has done her best to close the loophole, but with a policy which is dependent on a maze of complicated regulations, some of which are too loosely defined, some of which are over-precise and some of which are subject to enter-pretation difficulties, there will be loopholes, there will be injustice and there will be damage.

    As the whole framework of the Price Code starts to groan under the new burden being imposed upon it, and as the Price Commission is put under severe pre-sure the whole ramshackle edifice could collapse. Quite apart from the right hon. Lady's remarks on the Price Code today, she has often said that it was high time the code was replaced. However, these orders are aimed at the continuation of the Price Code.

    It is ironic that they should have come on a day when we read in the Press that the CBI has made a special appeal to the Secretary of State telling her that the Price Code is crippling their efficiency and their investment and is causing them a great deal of damage. It is more ironic because in a speech on 10th October at a Merseyside dinner she said,
    "perhaps this is as important as any individual element, the attack on inflation forms part of an overall strategy to act on all domestic factors contributing towards inflation and blocking modernisation and growth."
    I submit that the Price Code in its present form, with the imposition of these regulations, as the CBI has quite rightly claimed, is doing precisely that.

    Today, once again, we have had from the right hon. Lady reassurances and counter-reassurances. She has made the complex sound simple to us. However, as I listened to her I could not help thinking of the Red Queen in "Alice Through the Looking Glass", when Alice complained:
    "One can't believe impossible things."
    The Red Queen replied:
    "I dare say you haven't had much practice…. Why, sometimes I've believed as many as six impossible things before breakfast."
    I should not dream of describing the right hon. Lady as a Red Queen. She may be a pink queen, but she is certainly not a red one. Nevertheless, she puts a great deal of strain on our credulity when she asks us to accept that these orders are simple and likely to be effective because—

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

    She did not say that.

    If the Government do not expect these orders to be effective why are we debating them?

    The hon. Lady must not give the impression that she is quoting me unless she is. I am sure she will accept that.

    Similarly, I hope that the right hon. Lady will accept that the impression she has given is that the Government hope that these orders will be effective. I believe that they are likely to provide the worst of both worlds and impose the greatest bureaucratic burden on employers and provide a good many loopholes for employees.

    However, at present, I am suffering from a stab of compunction. I believe that I have been too caustic about these regulations and that I have not been fair when criticising the drafting quite as brutally as I have. In many ways, as the right hon. Lady knows, with the addition of a few new stringencies and twists, much of what is contained in these orders reproduces word for word the regulations that were made under the Conservative Pay Code in 1973.

    So what we are debating today is nothing new. We are merely witnessing an operation in plastic surgery in which part of the Pay Code is being grafted on to the Price Code. At least the Government might have had the honesty to change its name to that of the "Pay and Price Code", because that is what it has become. That is why I find the right hon. Lady's statement in her speech in Liverpool rather surprising because she said,
    "The pay limit is something that the TUC has proposed. It is not a Government imposition".
    If that is not what these orders are, then I am sorry, I do not know what they are and the whole policy belongs in a phantasy world with Alice and the Red Queen.

    Even at best, that part of the Government's policy which these orders implement is nothing more than a sticking-plaster patch on a serious wound. Nothing has been done to deal with the fundamental problems of structural inflation which are causing so much of our present trouble.

    I hope that I speak for all my hon. Friends when I say that we do not intend to divide the House on these orders, because we have given the Government an undertaking that we shall not obstruct their legislation. Unlike the present Government, we are giving their policies a fair chance.

    However, I should like to put it clearly and unequivocally on record that we consider it highly unsatisfactory to use the Price Code in this way and we consider it deplorable to make employers and small companies the scapegoats of the Government's own failure.

    7.4 p.m.

    My complaint against the timing of these orders is rather different from that of my hon. Friend the Member for Gloucester (Mrs. Oppenheim), namely, that they have been put down for discussion after the Sex Discrimination Bill. I complain that that irrelevant trivia should take precedence in timing over an order of fundamental economic significance at a time when our economy clearly needs some wise guidance.

    I might also find myself guilty of some form of sex discrimination if I were to pursue my doubts about both the speeches we have heard. Therefore, I must be as moderate as I can for fear of chastisement by the law.

    I agree with the right hon. Lady on one point—this might not be such a popular cause to espouse for those who sit on the Opposition side of the House—namely, that the rate of inflation has been coming down. In my opinion there is no doubt about that. Although it is traditional politics to say that under the Conservatives inflation always goes down and under the Socialists it always goes up and that the Conservatives always build more houses, and so on, one should give credit where credit is due. Credit is probably due to my noble friend Lord Barber for his fine piece of economic deflation at the end of 1973 which caused a drop in the rate of inflation. I believe that this was borne out in an article by Mr Utiger in the Financial Times to which the right hon. Lady made glancing reference.

    Incidentally, I believe that the right hon. Lady presented the CBI as being highly satisfied with the orders and, indeed, with the conduct of the Price Code. I should like to quote one sentence from the article, namely:
    "The Price Code must be abolished."
    That is the view of the chairman of the CBI prices negotiating team. Let it be made clear that the CBI is beginning to turn against the Price Code and the right hon. Lady must not invoke it in her aid.

    If I gave that impression, it would have been a false one. I do not think I did. There is a distinction between the attitude of the CBI towards the use of the Price Code for Counter-inflation purposes which it does not like but has accepted, and the attitude of the CBI towards the Price Code itself on which it has made not only on this occasion but on numerous occasions both to myself and the Government representations which preceded mine about its dislike of the Price Code.

    Let it be understood that the Price Code must now be abolished. That is now the view of the CBI. At least we are making some progress. Indeed, I believe that my hon. Friend's speech showed that we are making quite a lot of progress. The only disappointing feature is that the right hon. Lady has still not seen the light.

    I should like to reinforce this point by quoting another passage from this article:
    "Competition in very depressed markets is holding prices and profits below the level permitted by the Code. The Price Commission's report shows that profit margins in the first three months of 1975 had fallen on average to only half the reference level."
    Therefore, inflation is abating, but the level of prices is not as high as would be permitted by the Price Code. Inflation abatement has not been brought about by the Price Code. If that were the case, prices would be bumping on the ceiling. I ask the Government, and I want an answer: what on earth is the point of the Price Code if it is not causing inflation to moderate? Inflation is moderating and there can be no doubt about it. I am sure that the right hon. Lady would agree with the Price Commission that prices are not bumping on the ceiling of price limitation. Therefore, what is the point of the ceiling?

    This question is of enormous importance, and it is not one which the Under-Secretary of State, who I hope will reply, can lightly shrug off. He may say "That is just temporary. In due course the economy will get going, competition will slacken, and manufacturers will try to put up their prices." If that is what will happen it will mean that just at the time when production and investment might be stimulated by some increase in economic activity the lid will be firmly held on the whole thing. We have only to look at our industrial production and levels of industrial investment to see how disastrous that lid has proved in the past.

    The Government must face the fact that production in this country is now about 4 per cent. below the level of production during the three-day week. I remember the Prime Minister taunting the Conservatives all through the summer. To practically everything one said he shouted, "Three-day week", as if it were a sort of schoolboy taunt that stuck and hurt—"Three-day week minus 4 per cent. to you and snubs." That has been the effect of Labour policies and the effect particularly of price control. I hasten to add that I was not saying snubs to you, Mr. Deputy Speaker.

    I am obliged to the hon. Gentleman. I was looking anxious because, although I realise that both Front Benchers went a little wide, we must try to keep to the two orders. It is not the whole of the Price Code which is under consideration.

    I have a lot to say about the orders, but I should be grateful if I could complete one point on the wider scene. I will then come to the orders.

    I want to refer to investment. The right hon. Lady makes herself out to be a moderate member of the Labour Party, somebody who has the best interests of the mixed economy at heart, a social democrat to the core, and one who forswears extremism and militancy and the horrible tendencies appearing on her Left wing. Yet she is presiding over the destruction of British industrial investment.

    The one single thing which is causing more damage to investment in the private sector is the fear of price controls. When the right hon. Lady rose to that Box today and said that she had not decided by how much she should tighten the screw after the summer of 1976, she was frightening off another £1 billion of private sector investment. That was the effect of her words. If she would now interrupt me and say "I undertake to take this silly lid off as soon as any price starts to touch it" she would get a large upsurge in investment straight away. If she undertook not to reimpose price controls, that would be the effect.

    Which does the right hon. Lady want to do? Does she want to encourage investment? Does she want to see British private sector investment increasing? Or does she want to stick to this policy which, by the admission of the Price Commission, is in no sense affecting the rate of inflation? How stupid can one be and how much damage can one do with the best of intentions? If the right hon. Lady is really such a benign, wise, middle-of-the-roader, she will not play into the hands of the Left wing by causing such a lack of profitability in British industry that it can no longer invest.

    I now turn to the orders, which are very strange. There are three major categories of firms which are not affected by the orders. The first category comprises firms which are largely or entirely involved in exports, because there is no control of export prices. Even a firm which has quite a high proportion of exports only can claim that it does not matter how much it pays its workers because its goods are being exported. I am delighted that some people should be free, but the worker on the shop floor will say "How strange this is. I am making a pump for the home market and can only have £6 a week, but Bill, who is making a pump for Afghanistan, can have as much more as he likes. What is the logic of that?" That is one defect.

    Secondly, small firms will not tell the right hon. Lady that they have paid more than £6 a week. They will not tell her anything. Indeed, quite a lot of medium-sized firms will not tell her, either. Yet this is the whole idea of prenotification.

    One does not say to schoolchildren "Will you write in every month and tell the head teacher how many sweets you have stolen from the sweetie shop?", because they will not do it. It is not human nature. If they write in, they will make a nil return. It is no wonder all the returns made to the right hon. Lady have been nil returns. Nobody will write in and admit that he has broken the pay guidelines, because he knows that he will be clobbered with this order and super conditions will be imposed on his price increases which will damage him. The right hon. Lady will not get any telltale answers. That is another large area of exceptions.

    Thirdly, the right hon. Lady mentioned builders. How will the right hon. Lady know whether a builder, who quotes separately for every job and for every job quotes a different rate for concrete, excavation, form work, steel fixing, plastering and painting, dependent upon the conditions of the job, has put up his prices? It is impossible. Therefore, to start with there will be areas in the economy where the Pay Code does not bite. I am delighted that there should be such areas. I wish that there were more.

    Let us consider a situation where the Pay Code will bite and will be enforced through the Price Code. That is the purpose of the orders. Let us suppose a firm in the private sector is forced by threats of industrial action and whatever else to pay an increase which is greatly over the pay limits contained in the White Paper, and, by some mischance, the Secretary of State for Employment finds out. He will tell the Price Commission and the Price Commission will put a stop on the next price increase. The effect will be to reduce that firm's profits, if not to turn them into a loss. That will mean either that the firm goes bankrupt or that, at best, it is unable to make as much investment as it would otherwise have done. That will hit investment. It will cause the firm to become uncompetitive and eventually it will shrivel away and die. The Secretary of State for Industry will then come along and say that that firm has failed the nation. There will be a sit-in, because he will ask the chaps to sit in. We shall then have to fork out I do not know how many millions of pounds to salvage that bankrupt firm which has been bankrupted by the orders before us. What good does that do? It seems remarkable as a policy.

    What happens once that firm is nationalised? Suppose it were British Leyland or a straightforward nationalised industry like the Gas Board and, by dint of industrial action, strike threats and holding the community to ransom—all those emotive phrases which we hear—the workers extract £10 a week. The nationalised industry will then be asked to control its prices lower than it would otherwise have been allowed to do according to the complicated formulae, and it would make a bigger loss at the end of the year. If it were the Post Office, instead of losing £350 million it would presumably lose £450 million, £500 million, or whatever the figure may be. As a result, the Government would have to print another £100 million which they have not got. If they print another £100 million, they make inflation a little worse. If this policy were ever applied—I suspect that it will not be applied—its effect would be to worsen slightly the rate of inflation.

    In view of that, could not the right hon. Lady use her nut and withdraw these orders, withdraw the Price Code, scrap the whole thing, wrap it all up, and get on with helping the attack on inflation by doing what she can to stop the Government spending so much money? That is what is required.

    There is one further objectionable feature. I hate being personal. I never am if I can help it. However, the Secretary of State for Employment will be in the position of deciding which settlements are within and which are without the White Paper guidelines. The temptations will be very great. The Secretary of State is a man of complete probity and honour, but even such a man will be tempted to overlook unpleasant things—and he has his political prejudices just as we all have. What is the citizen's redress against being singled out from many who have exceeded the pay increase limit for special treatment by the right hon. Gentleman?

    Imagine, for instance, if the right hon. Member for Bristol, South-East (Mr. Benn) were appointed to that position in the next Government reshuffle. His desire is to turn all the private sector into public sector, and he could with the greatest of ease, by referring pay settlements left, right and centre, conduct a vendetta against private sector companies, letting through perhaps one or two in Bristol, South-East but not others anywhere else. Such a policy would be objectionable.

    Indeed, the risks of ministerial fiat, of government by ministerial whim, are again increased by this policy. The long and short of it is that it is highly bureaucratic, with hundreds of civil servants passing around pieces of paper. Its net effect is mildly—I say mildly because I am a man of moderate claims—inflationary. It increases the area open to political decision-making clear of this House, and I feel that this should be the last time that the House lets through any of these orders. They do not help, but exacerbate the situation. I hope that my hon. Friend's near conversion to understanding the damage that this order can do will be reflected in her and my other hon. Friends combining to throw out the next order made under this legislation.

    7.21 p.m.

    It is always a pleasure to listen to my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), and it is a pleasure to follow him in this debate.

    It is a great pity that when we are discussing measures of this importance, which, let us face it, will result in sanctions being available to be imposed upon employers, there is such a poor attendance in the Chamber. There may be special reasons for that.

    But for many reasons this day is a sad and sorry one. It is a sad day because the sanctions which this order embodies are not particularly attractive to the Secretary of State or, indeed, to the Government as a whole. I think that the right hon. Lady is on record on several occasions as being most reluctant to consider such proposals as these. Indeed, there was a discussion on the Prices Bill when the right hon. Lady removed a half-proposal to that effect.

    It is a sad day also because we are debating the imposition by the back door of a pay policy which the Government are unwilling or unable to impose by the front door. There can be no doubt that the order deals primarily with pay policy, and not with pricing policy, and, although it was foreshadowed during the debate on the Remuneration, Charges and Grants Bill that an order would be laid to provide these powers, the fact that it has been so laid and is now in force and we are having a retrospective debate on it accentuates the sadness of the day, because we are that little bit further along the road to the inevitability of wishing to use these powers.

    I believe that when legislation is enacted it always encourages the use of it. More legislation encourages more use, and orders that are made and passed are likely sooner or later to be used, because the Government can reasonably say "If we have taken these measures and gone to this trouble and defined the area in this way, and the orders are available, why should we not see that they are used and try to have a dummy run to see whether they are effective?" I am, therefore, sad on that ground, too.

    A much more important matter was raised in the speeches of my hon. Friends the Members for Gloucester (Mrs. Oppenheim) and Cirencester and Tewkesbury, and that is that these measures will not have an effect that is likely to be helpful in the present situation, where both sides of the House are agreed that the prime priority is the attack on inflation. My hon. Friend the Member for Cirencester and Tewkesbury suggested that these measures may have a counterproductive effect. That could be so, but I wish to draw the attention of the House to the fact that sanctions are now available, and these require careful definition.

    I am not as sanguine as the Secretary of State that what is before us is not a difficult task but a simple one. The right hon. Lady suggested that this was not too great a complication with which to face British management at this time, yet we did not get an answer to the first simple question that my hon. Friend the Member for Gloucester asked: "What is the pay limit?" Is it £6 flat, or is it a combination of various features within this figure of £6?

    If one looks at the order, one notes that it deals with remuneration and says that remuneration
    "in relation to any employee includes any benefit, facility or advantage, whether in money or otherwise, provided by the employer or by some other person under arrangements with the employer, whether for the employee or otherwise, by reason of the fact that the employer employs him."
    I accept that that is the terminology that is inevitably used to describe remuneration, but in so far as the Government are seeking to employ sanctions, and where the £6 limit is a matter to be defined, we might ask who should define it. That would be done by the Secretary of State for Employment. But when we come to discuss benefits in kind available, let us say, within the coal mining industry, is the value of the coal that miners take home—and they are fully entitled to do that—to be deducted from the £6 to which they may or may not feel they are entitled, or do they take less coal? We want to know precisely how remuneration and the £6 limit will be defined.

    When it comes to the imposition of £6 within the food manufacturing and food distribution sectors, this must be a grave risk. We are talking about 20 per cent. to 25 per cent. increases being put on to the food manufacturing and distribution sectors at a time when there is the completion of the equal pay movement, and when this is a considerable burden.

    But it is not just a matter of defining remuneration. It is that the particulars required are so comprehensive. The order requires
    "in relation to each employee, the date of the last settlement relating to his remuneration which was implemented before 12th July."
    It also requires in relation to each employee
    "the date of making each settlement…relating to such remuneration or to that and other remuneration, the persons by whom it was made the persons to whom it applies and the date of its implementation."
    All this involves a great deal of additional work, and it must involve some marginal increase in industrial costs. Many smaller companies are within the ambit of the code for the first time, and they will be taking this on board while they are still smarting from their efforts to deal with multi-rate VAT. I suggest that this is a substantial burden in which the Secretary of State is involving management. It is a difficult burden, and it comes at a particularly difficult time.

    The arrangements require more time for consultation. I welcome the information given by the Secretary of State that, on the whole, the prior consultation procedure is working well. I am glad that guidelines are being issued, but I should welcome confirmation from the Minister that the guidelines issued by the CBI and by the Price Commission have the blessing of the Department of Employment and that what we are getting are definitive guidelines in this highly sensitive area. Can the right hon. Lady assure us that the interpretation given by offices of the Department of Employment in different parts of the country will be identical when it comes to giving advice to employers on whether settlements are within the guidelines? This is a valuable service, and it would be a disaster if one found different interpretations in different parts of the country.

    However, our main concern is whether coming at this time and in this way these orders will serve a useful purpose. Those of us who have been involved with the pricing policy on the two prices Bills have seen the code come and go and be amended favourably and unfavourably. As my hon. Friend the Member for Cirencester and Tewkesbury pointed out, there is now sufficient evidence that the code has ground steadily further and further into the management problems of industry until industry has reached a point where it has little more to give.

    It is obvious from the Price Commission's report that profit levels are seriously undermined, and from the economic conditions that pricing is more or less dictated by market considerations and not by artificial factors. Therefore, it is quite natural for the Confederation of British Industry to seek an end to the use of the Price Code.

    When the Secretary of State suggested that no review would be undertaken for the remaining 12-month period until mid-July 1976, she also suggested that what was in hand was in line with her general policy for growth. She believed that there could be a climate conducive to more investment. However, I think she must recognise the enormous lead time required for the results of investment to show in higher production. It would be difficult to delay decisions of that kind for, say, 12 months and to assume that a rapid return to full employment and investment could be achieved overnight. I am sure that the right hon. Lady does not expect that to happen. However, Governments have frequently waited too long before reacting to the pleas of British industry to release it from the straitjacket of the Price Code in order to increase and encourage investment. If the Secretary of State seriously believes that investment will be required for 1976–77, action should be taken now within the code. I urge her to consider most carefully the timing of the follow-through from the present most difficult economic circumstances.

    I am not persuaded that these orders are easy for industry to handle. They are difficult, costly in management time and costly to the small companies that come within their scope. I greatly regret that we are discussing sanctions, because once the principle of a sanction is enacted, although it be the principle of a pay policy, it would be possible for sanctions to be imposed via the code for other purposes; for example, employment policy, regional policy and possibly political purposes. I am sure that the Secretary of State has no intention of doing that.

    However, the principle of establishing the Price Code as a vehicle whereby pay policy can be enacted by sanction suggests that we are opening a door which is capable of being wildly misused if the Government are not careful.

    Therefore, together with my hon. Friend the Member for Cirencester and Tewkesbury, I hope that we might not have more orders of this kind and I look forward to the day when perhaps a fuller House might be debating not merely orders but the possible removal of the Price Code altogether, with the recognition that that would be a far more profitable day's work than that in which we are currently engaged.

    7.34 p.m.

    My hon. Friend the Member for Gloucester (Mrs. Oppenheim), described the Government's Counter-inflation policy as a charade. That is a formidable indictment. I am certain that with the passage of time her astringent observations will receive increasing endorsement. Certainly she will have a ready ally in my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley).

    Tempted as I am to follow these macroeconomic debates, which have often been features of consideration of orders under successive prices and incomes legislation, I shall restrain myself and consider the statutory instrument which is before the House this evening. It has immense implications as a sanction for policy.

    Quite early in the lifetime of this Government the idea was floated that the Price Code might be used as a sanction for a pay policy. It received a rather angry retort and reaction from those elements of the Labour Party whose memories were still green with the belief that there would be no statutory control of wages under this Government.

    Therefore, I am grieved this evening that the Labour benches are graced by not one member of the Tribune Group. Where have all the radicals gone? Where is the hon. Member for Liverpool, Walton (Mr. Heffer)? I had thought that he would carry the torch even in these dark times to demonstrate that there is still a thread of continuity and scepticism within the Labour Party, where there are grave doubts about the value of a Price Code as a sanction for a wages policy. However, in his absence the industrial working class must be represented as well as possible by my hon. Friends and my self. I am sure that we are wholly equal to that.

    The question has been raised, will this policy work? This evening we have a chance to consider some of the mere mechanics of the application of the order. I agree with the suggestion of my hon. Friends that there are wider forces at work in the economy that make orders of this kind irrelevant to the overall movement in the rate of inflation. That is not the issue under consideration. The issue under consideration, whatever our doubts may be about the efficacy of these orders as a means of countering inflation, is the reality in the burden they will impose upon industry, which has to comply with the law. The fundamental charge that is being levelled this evening is that this it literally an intolerable burden. I do not want to use exaggerated language to deal with this situation—that tends to be more characteristic of others in public life. However, as we sit calmly legislating at 7·40 in the evening I do not believe that we have the slightest idea of what this will mean for the company secretaries of those companies that have to report under this legislation.

    My hon. Friend the Member for Pudsey (Mr. Shaw) advanced the argument, how did one deal with the more exotic forms of remuneration? He instanced the miners' concessionary coal. The National Coal Board does not have to notify under the provisions of this legislation. However, I shall take as an example a mythical company that could be located in any of the constituencies of my hon. Friends who represent rural seats.

    Although it is a mythical company it is, none the less, typical because it has three characteristics. It is large enough to have to notify, report and conform to the requirements of the statutory instrument. It has canteen facilities and a system of company transport to bring workers to its premises from the surrounding villages. There is nothing unusual or strange about a company that has those three characteristics. The question that immediately comes to mind is, how does one treat what may well be an increasing subsidy content in the canteen account? Almost certainly the canteen meal will be bearing a subsidy. How is that subsidy treated if it increases during the period under notification? How does one assess whether the workers whose remuneration is being notified have taken the meal entitlement? Some may use the canteen facilities; others may not.

    These are not absurd or barrack-room lawyer point. They are exactly the day-to-day issues that will immediately confront anyone seeking to interpret the statutory instrument. Such people will note, as has been observed by my hon. Friend the Member for Pudsey, that
    "'remuneration; in relation to any employee, includes any benefit, facility or advantage, whether in money or otherwise".
    I turn from how the canteen facility is to be assessed and interpreted and, above all, notified, to the second facility—either subsidised, or, as is often the case, free transport. How is the increasing value of that facility to be calculated? If the mythical factory were located in the constituency of Oswestry, where the Crossville bus fares have been increased very substantially, and if the company's travel arrangements were paralleled by a Crossville bus service, some idea could be gained of the benefit which might be implicit where free travel is still being provided and where otherwise the worker would have to go by public bus service. Often, those who will be collected by the company travel arrangements will be conveyed from villages where there is no bus service. In those circumstances how does one calculate the remuneration or the facility or advantage implicit in that situation? One thing is certain. Free travel to work, if that is one of the conditions of employment, is a facility of considerably enhanced value today compared with a year ago.

    Company secretaries and all who will have to fill in these forms will want to know how they are to cope with this situation. When the Under-Secretary answers it will not be for him to say that this is something that can be determined in conversation with the regional offices. These judgments should be made known in the House of Commons legislating tonight, so that there will be an understanding that there shall be parity of treatment in this important aspect of remuneration.

    I have made this point only in respect of subsidised canteen facilities and subsidised travel arrangements. I assure the Under-Secretary, who, I trust, will take my word for it, that there are many other aspects of what I will call exotic remuneration in industry and commerce today, and the straightforward wage content of a company's total wage cost is a diminishing factor. Therefore, it is all the more important that the Under-Secretary should be explicit about how these other fringe forms of remuneration are to be dealt with.

    It will be evident to a wider public in the country as it is already crystal evident to my hon. Friends and myself that what we are seeing burgeon forth is a most complex and bureaucratic form of control. We are moving to a situation where industry and commerce will be burdened by so much form filling, so much reporting and so much notifying that the time will be ripe for a bonfire of controls. The Prime Minister boasted in a previous incarnation that he once conducted a bonfire of controls. I fear that he has learned badly in the period since those days of the early 1950s. It will be left to these benches.

    I wish my hon. Friend the Member for Gloucester well and advise her to take a crash course in incineration because sooner or later there will have to be evidenced a political will to sweep away this policy and the bureaucracy that goes with it.

    7.46 p.m.

    These orders give effect to the sanctions under the Government's Counter-inflation policy and embody the policy whereby firms which offend against the pay limit will not be able to get the price increase under the code that they would otherwise have got.

    The orders represent the culmination of months of delay, talking and thinking about how to deal with inflation that the Government have been undertaking. Manoeuvre after manoeuvre has been gone through—U-turns, W-turns. Z-turns, bends, hoops, spirals and loops, and we have eventually ended up exactly where we started—with what is in effect a statutory incomes policy.

    The Chancellor was determined, above all, to win the General Election, and all national interest was subject to that end. So he determined that no action would be taken to bring inflation under control. He was determined to buy his country in the cheapest market and sell it in the dearest.

    The Prime Minister's broadcast during the recess was nothing less than a repudiation of the very means by which he seized power. He used his broadcast to adopt the very policies that he had set out to undermine and to make unworkable.

    During all these months of delay and inaction we have had the spectacle of inflation being allowed to rip. Inflation, which was at 13 per cent. when the Government came to power in February, 1974, has doubled to an annual rate of over 26 per cent. and now it exceeds even that of Italy, which has succeeded in getting its inflation rate down to under 16 per cent.

    Some people may attempt to draw comfort from the statistics which have appeared in the last few days about the wholesale price index. At times I thought that the right hon. Lady was almost presenting those figures as the last cloud of a dying storm. However, if we look ahead, we can see that there are plenty of clouds over the sea. There are plenty of reasons for thinking that inflation will get worse, even if it gets better in the next few months. There are plenty of reasons for thinking that the Government will not be able to meet their target of getting inflation down to 10 per cent. by the end of next year.

    The right hon. Lady dwelt at some length on the statistics—the wholesale price statistics and input prices. What she did not relate in any great detail was that input prices rose by 3½ per cent. in September alone and that costs to the food industry rose particularly sharply She did not dwell on the effects that are bound to be reflected increasingly in the Index of Retail Prices in the months ahead—effects of the depreciation in sterling, effects of the devaluation of the green pound, effects of the increase in oil prices, and effects of the increases in telephone charges and postal charges which have yet to work through the system.

    On top of all that, we have the prospect of world demand picking up in other countries. The Chancellor of the Exchequer has been extremely keen that other countries should rush into reflation and so help to solve some of our problems. However, as soon as that begins to happen it will make it even less likely that this country will be in a position to meet its inflation target.

    To reply to what the right hon. Lady said about the slowing down in inflation, even if inflation has slowed down in the past few months it has done so only at a massive cost—namely, a great rise in unemployment. We remember the period when we were told that there was no other way to deal with inflation other than through the social contract. The social contract was held out to be the gateway to the promised land. We have now discovered that the Government knew all the time that unemployment was another way of slowing down inflation. At the same time as accusing their political opponents of wanting to espouse that policy they sensibly got on with it themselves. They used the policy they were so quick and hypocritical to condemn in their opponents.

    I must confess that I was a little alarmed when the right hon. Lady talked about resuming growth next summer. If there is any lesson that has to be learned from the past I should have thought it is that cost increases after a period of prolonged inflation can continue in the pipeline for perhaps years. Certainly the one thing that would undermine any trend towards a reduction in the rate of inflation would be for the Government to decide that next summer was the moment to get back on the path of rapid growth. Let the right hon. Lady tell that to the holders of sterling and we shall see what it will do for confidence in our currency.

    The right hon. Lady has also been at some pains to say that the orders do not represent the implementation of a statutory policy. However, these orders, together with the clause in the Remuneration, Charges and Grants Act, talk about specific pay limits and statutory sanction which is embodied in the orders. There is the sanction of not being able to obtain the price increase to which one would otherwise be entitled. The Act from which the orders derive refers to "a sanction against…remuneration".

    The right hon. Lady may argue that one could envisage a situation in which an employer could concede a wage claim over and above the £6 limit and the Government would not be intervening unless the employer made an application for a price increase. Strictly speaking that is correct, but we all know that in the present situation, with wages a high proportion of firms' total costs, firms do not have that added flexibility. In fact, if firms are refused the freedom to pass on increased wage costs in prices there is imposed a full-blooded statutory incomes policy.

    Does it make any difference to say that what we have is not a statutory policy, that we have a voluntary policy and if it does not work we shall introduce a statutory policy? Is there any distinction between a statutory policy and a policy that is imposed with the threat that if it is not accepted a statutory policy will follow? I do not believe that that is a distinction which can be maintained.

    It is because the Government have been so reluctant to admit that the orders represented a statutory policy that we have had so little light cast on some of the ambiguities and problems to which my hon. Friend the Member for Oswestry (Mr. Biffen) referred. If it had been admitted from the start that this was a statutory policy we could have had a proper White Paper explaining how some of these matters were to operate rather than leaving it to the public and to Members of Parliament to consult documents made available by the TUC and the CBI. The Government have proceeded by way of the back door. Without doubt these two orders represent the implementation of another statutory incomes policy.

    We would complain about the basic unfairness and inappropriateness of the way in which the Secretary of State is now using the Price Code, to which we have many other objections. We have the added objection that the right hon. Lady is now using it for a purpose for which it was never originally intended. She is using it in an unfair way by imposing the burden entirely on employers. To listen to the right hon. Lady or to read the legislation one would have thought that it was a case of employers stuffing pound notes down the pockets of unwilling trade unionists. Why should a firm have to bear all the penalties of this legislation? Why should a firm have to choose between bankruptcy or conceding a wage claim and then being penalised by the Government? Why, too, if the employer gives way to an inflationary wage claim, should he lose the whole of the claim as an allowable cost as opposed to just that part in excess of the limit stated in the original legislation from which the orders stem?

    I also have a number of detailed points to make about the orders. Like my hon. Friend the Member for Pudsey (Mr. Shaw), I am glad that the Government have abandoned the attempt to halve the notification time from 56 days to 28 days. I welcome the understanding that the right hon. Lady has come to with the CBI on that matter. I hope that the notification period—I know that the CBI had some doubts about the matter—will work out and prove to be operational.

    I ask the Under-Secretary of State why it is that those firms which have labour costs of less than 15 per cent. should be treated as though their labour costs were 15 per cent. That hardly seems to be fair. What proportion of firms fall in that category? What is the reason for that provision?

    We have had further enlightenment about the £6 entitlement. My hon. Friend the Member for Gloucester (Mrs. Oppenheim) dwelt on this point. My hon. Friend wanted to know whether or not it was an entitlement. Different noises have been made by different people who support the £6 policy. Clearly, the effect in different sectors in our economy could be very different. For example, my hon. Friend the Member for Pudsey pointed out that a £6 increase in the retailing industry or the food industry could be extremely large in percentage terms and could have very damaging results.

    My hon. Friend the Member for Oswestry referred to the treatment given to benefits in kind. On the back of one of the forms that are sent out to firms it is set out specifically in notes to Part 3 that
    "improvements in conditions other than pay which count against the pay limit include for example reduction in standard working hours, holiday improvments, overtime and shift premia, any other benefits in cash or kind."
    How are these matters to be assessed? Above all, how is the poor person presented with this form expected to fill in the box at the bottom which reads "Answer Yes or No"

    We do not apologise for repeating that we do not agree with using these orders to drag in the Price Code for purposes for which it was originally not intended. One result of doing that has been the unfortunate fact that the Price Code will now remain in existence beyond March 1976, when it would have expired.

    I listened with some concern to what the Secretary of State said about the policy and code remaining broadly unamended in existence until July 1976. It is increasingly clear that the code is becoming unworkable and is getting out of date and that the structure on which it was originally based is becoming absurd. The reference levels for profits relate to the years 1967–72. The base date for prices is 30th April 1973. It is true that the reference levels allow the two best years out of the last five years, but these regulations cannot be flexible enough to allow for changes which have taken place over the period which now amounts to nearly a decade.

    I appreciate that the Secretary of State has made concessions about productivity deductions. Those concessions are welcome, but as long as there remains a distinction between real and allowable costs, the pressure will continue to increase on industry. What the code represents is a noose placed around the neck of industry. As long as there are different movements between allowed costs and the costs of the real world, not the costs in the imagination of the gentlemen in Whitehall, the stranglehold on industry will become tighter and tighter.

    On top of this there is the ratchet effect of the productivity deduction. The Government, by allowing the Price Code to continue in existence well into 1976, seem to think that there is some invisible pool of productivity on which firms can draw for ever. They try to take away productivity twice, first in the form of a productivity deduction and then via the calculations on unit costs. Any improvement in productivity that leads to lower costs has to be passed on as a deduction from allowable costs. Firms which manage to increase productivity will have it deducted twice over. Now that the Price Code is being extended long beyond the period originally intended it means that it is becoming a major disincentive to a firm seeking to improve its productivity and the efficiency of its operations.

    There is another major objection against continuing the Price Code. We may argue in this House whether the cause of inflation stems from wages, or whether it is ultimately a monetary phenomenon. But what is not argued is that we have a profit-led inflation. That argument is advanced by nobody in this House, yet the effect of the Price Code and unit costs deduction has been to squeeze profits disastrously.

    I agree with all the remarks of my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley). We have seen the disastrous effects on the food industry. At one time the United Kingdom had the finest food industry in the world, but it is slowly being strangled by the noose of price control and is undermined by the 10 per cent. cut in gross profit ceilings.

    We reached a period when the Government began to realise that they were taxing inflationary profits. They came to the view that some of the attacks they made on excessive profits were exaggerated. We then had a period when the Chancellor of the Exchequer made speeches about it and we moved to a period when that right hon. Gentleman spoke of stock appreciation and of relieving firms from that element of tax. However, we have still had no adjustments in the Price Code to take account of that factor. No amendment has been tabled to that end. It is hardly surprising that profits have been so badly hit by the noose placed around the neck of private industry. No wonder profits have plummeted by half and that the return on capital is only 6 and 7 per cent. at a time when it costs at least 12 per cent. to borrow money.

    The Price Code is now in many ways becoming harmful. My hon. Friends the Members for Pudsey, Cirencester and Tewkesbury and Oswestry dealt with the vast army of bureaucrats and the jungle of regulations now being created. We are now creating a new profession half way between an accountant and a solicitor who seem to spend most of their time following changes in the Price Code and writing letters to Whitehall. They are the people who talk in the "newspeak" of today in which a company is not a company but a "profit margin unit". We have a vast bureaucratic machine absorbing far too much time of both the governed and the governors. We have profit calculations belonging to pre-inflation days. We have feeble proposals to deal with shortages when they arise—and shortages always arise from price controls of this kind. We block one anomaly merely at the expense of creating another.

    These matters have little to do with the problem of inflation and how we should deal with it. It reminds me of the Duke de Morny who was one of Napoleon III's ministers and was an insomniac. He passed a law through the French Assembly that prevented swallows sitting on telegraph wires at night. One cannot deal with inflation in that way. It cannot be done by laws to squeeze profits and profit margins.

    What the Government propose to do remains fundamentally inadequate. Until the Government get at the root cause of inflation, public spending, their attack will be destined to fail and will be as futile as trying to clap with one hand. When the Government get to grips with inflation, we shall give them our full-hearted support—but not before.

    8.8 p.m.

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

    Those of us who take an interest in the affairs of this House will be surprised that the Opposition this evening, given this first opportunity in the reassembled House of Commons to discuss the serious issue of inflation, have not advanced one single constructive suggestion during the entire debate. We have, of course, become accustomed to that from the Opposition in debates on the Price Code.

    The level of seriousness with which the hon. Member for Gloucester (Mrs. Oppenheim) treated the debate was illustrated by her absurd suggestion that what was most at fault was the fact that the Government had waited two months before debating this order. She was more impassioned about that point than anything else for there was a good deal of jollity in her speech. It is curious that the hon. Lady should have fastened on that procedural point but not bothered to refresh her mind about what had happened previously. She claimed that we had not had an opportunity to discuss these matters.

    I do not come to these debates as do some hon. Members with a prepared speech that bears no relationship to anything said in the debate. I come to listen to what is being said and seek to answer any points that require reply. The hon. Lady has not taken advantage of this debate to raise any new point. She preferred to jest about my right hon. Friend and to describe her as a character from Lewis Carroll. The hon. Lady reminds me of a character from Lewis Carroll—the Duchess, whose advice was:
    "Speak roughly to your little boy,
    And beat him when he sneezes;
    He only does it to annoy,
    Because he knows it teases."
    That describes the attitude of the hon. Lady.

    We are taking steps to give backing to a voluntary wage policy agreed to with remarkable unanimity by the trade unions and acquiesced to by industry at large. There was not one word of congratulation to either side of industry for the statesmanlike attitude which they have always displayed in difficult times. I suppose that the hon. Lady's attitude is not surprising as she comes hot foot from the atmosphere of the Conservative Party conference and has not yet come down to earth to debate the real issues.

    As the hon. Gentleman mentioned Blackpool, will he say whether the TUC Congress at Blackpool accepted a £6 limit or a £6 entitlement?

    The hon. Lady knows what is the policy of the Government for whom I speak. Members of the Government have stated on many occasions both inside and outside the House that the £6 limit dealt with in this statutory instrument is a limit. There is no ambiguity about that. To suggest that there is ambiguity is throwing dust in the jurymen's eyes.

    The Minister says that there is unanimity on this policy. Does he agree that Mr. Len Murray believes that the £6 is an entitlement?

    Mr. Len Murray speaks for himself. I speak for the Government. It would be a pity if the hon. Gentleman adopted the more extreme arguments of Opposition Front Bench spokesmen, as he is normally a reasonable man. The hon. Gentleman demonstrated his reasonableness tonight.

    The hon. Member for Gloucester spoke, as did a number of her hon. Friends, about the unsuitability of the Price Code mechanism as a vehicle for a sanction, but she did not say whether she believed that a sanction was necessary. She did not even say whether she thought that it was appropriate to have a wage restraint policy. The country would like to hear answers from the hon. Lady and her right hon. Friend to those questions.

    The one bull point which the hon. Member for Gloucester might have made had there been a debate two months ago, about which she was so disappointed, would have been that there were differences of views, which have been happily resolved, over the period of notification of wage claims. Perhaps that is why she would have preferred the debate to have taken place two months ago, so that she could have inflated a soluble difference of view into a major criticism of a modest measure. That is characteristic of the way the hon. Lady proceeds in these debates. She proceeds by hypotheses, by "ifs" and "buts" and suggestions of horrors which may be in store.

    That line of argument was colourfully taken up by the hon. Member for Oswestry (Mr. Biffen). He gave it a concrete form when he spoke about exotic methods of payment. He sought to involve me in the work done with some Byzantine tortuousness by the Pay Board —the creation of a Conservative Government—in seeking to analyse in advance how certain payments, which he described as exotic, would be treated.

    I shall not deal with those hypothetical questions down the rural highways and by-ways which the Opposition would like me to follow. However, I do not believe that that creates the difficulty which the hon. Gentleman mentioned. I base my opinion on my experience of how these claims and notifications have been dealt with. The majority of the notifications received have raised no difficulty which has not been capable of being solved by means of a simple telephone call.

    I am glad that it is so easy. In that case the hon. Gentleman will have no difficulty in disposing of my questions. The statutory instrument speaks of remuneration and of

    "any benefit, facility or advantage, whether in money or otherwise."
    Does that cover subsidised canteen facilities and subsidised travel arrangements?

    The answers to those questions in general terms were set out in the Department of Employment Gazette in August. If there are difficulties in interpreting these general rules or the general answers which the Department has given to the questions most frequently posed, the answer is to telephone the Department of Employment to discuss the issue.

    The hon. Lady widened the debate and no doubt expects answers to questions.

    I shall answer those questions about which I hold responsibility. Detailed questions on the interpretation of specific pay settlements are clearly matters for my right hon. Friend the Secretary of State for Employment. I am informed by my right hon. Friend that there have been virtually no serious problems of interpretation in the two months since this policy was initiated. I know that it is good clean fun, and is often done in this House, to set up Aunt Sallies and to knock them down, especially when the House is rather thin, but I do not think that the hon. Lady will expect me to give an extended answer to such questions.

    Will not the Minister go further than that? I am sure that he wishes to help the House. I assure him that the thinness of the attendance in the House bears no relation to the importance of the argument, as this debate will be widely read by those who have the responsibility for carrying out the terms of the statutory instrument, whatever they may think of it. I suggest that subsidised canteen facilities and subsidised travel arrangements are a widespread and legitimate practice in industry and commerce and that it is wholly reasonable for a Member of Parliament to ask such questions. It does not help to keep the temperature of the debate at a nice low level to be told that we can telephone the Department. Surely questions can be posed in the Chamber and ought to be answered not merely for my benefit but for the benefit of the wider public who read Hansard.

    There is no mystery about it. The general principle is clear. These subsidiary payments—or exotic payments as the hon. Gentleman prefers to call them—are specifically referred to in Part 3 of the Price Commission's pro-forma. That they are generally to be counted against the £6 limit is clear.

    Any answer beyond that must be related to the specific circumstances of the individual claim or the individual settlement. It would not be helpful to firms which are genuinely seeking an answer for me to go beyond enunciating that general principle. If they have a specific difficulty, let them bring it to the Department, which will seek to assist them, as it has already done in a number of cases.

    The hon. Member for Gloucester has described these documents as obscure and burdensome. In so far as they are couched in legal language, I assent. Statutory instruments frequently are, but, as one of her hon. Friends said, other assistance has already been given. There was some criticism that two documents had been produced seeking to explain the statutory instruments in simple language. The Price Commission has produced its data sheet, a simple document which raises few difficulties of interpretation. I beg to differ from her if she thinks that there is any problem of interpretation of intention in these orders. I know that she enjoys throwing doubt on assertions when, perhaps, there is little doubt, but she failed tonight. The position is abundantly clear and simple and the mechanism whereby firms can resolve any doubts is clear and simple, unlike the procedure produced by the Conservatives when they were in Government, which involved the Pay Code and all the labyrinthine interpretations which had to be put on it. We have learned from experience and we are happy to learn from the experience of the Conservative Government on this.

    The hon. Member for Pudsey (Mr. Shaw) made his usual thoughtful speech—in marked contradistinction to his Front Bench—and raised several matters that merit consideration. He asked how we should deal with the question of advice being given in various centres and whether that advice would be consistent The advice given stems from one central point, the Special Information Unit which was set up by the Department of Employment at the beginning of August. Most of the queries received indicate that the main essentials of the policy are well understood by people in industry. That is almost incontrovertible. There has been a noticeable decline in the number of questions coming to the Department of Employment about interpretation and, as my right hon. Friend said, we are approaching a season when more settlements are made.

    The hon. Gentleman asked the most serious question that was asked in the debate—whether these measures will be effective and helpful in countering inflation. Whatever view one may take of the internal dialogue which goes on constantly on the Opposition benches about the ingredients of our inflation, few would deny that wage costs were contributing unacceptably to the level of inflation and that, in accepting a policy of wage restraint, the trade union movement is contributing most helpfully to tackling the nation's problems.

    In reply to the second half of the question as to what is the impact of the Government's action on the profitability of industry, the effect of this Price Code amendment is neutral in so far as industry co-operates in holding the line on the wage limit. Industry will not suffer in seeking to make this policy effective, and there can be little doubt that what industry would welcome more than anything is the overcoming of the inflation which exercises us all.

    Would the hon. Gentleman care to comment on the fact that in some industries the size of—dare I say it?—the entitlement is of such a scale that it constitutes an inflationary wage settlement? I think of the food manufacturing and distribution industry where it is about 20 per cent. or 25 per cent.

    I take the hon. Gentleman's point that there are problems for the food industry if the limit is to be interpreted as an entitlement and not as a maximum, but, as I stressed earlier, it is a maximum and not an entitlement.

    There is nothing in the Price Code amendment that imposes a new burden upon industry. That that is so is clear from the representations that we received after the consultative document was produced and from the nature of the debate, especially on the earlier Bill from which the order stems and which concentrated on the procedural aspects and not on the substantive questions. They concentrated on notification requirements and not on the possibility of the sanction being invoked. From what has been said in the debate it is clear that it is recognised that these sanctions are a shot in the locker which it is hoped it will not be necessary to pull.

    From the experience of two months of this policy I can report that it has not been necessary to do so. I say that in full recognition that the policy has not yet come under full stress. If both sides of industry co-operate, as they have done to this date, in seeking to bring their interests within the greater interests of the country in countering inflation, we can with optimism look to the success of this policy.

    I am glad that the House has had this debate and that we have had it so soon after the Summer Recess.

    Question put and agreed to.


    That the Counter-Inflation (Price Code) (Amendment) (No. 2) Order 1975 (S.I., 1975, No. 1293), a copy of which was laid before this House on 5th August, be approved.


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

    Islington (Home Loss Payments)

    8.30 p.m.

    I welcome this opportunity to raise a subject of great concern to Islington council tenants, ex-gratia payments to certain Islington council tenants who, under the Housing Act 1974, were ineligible to claim home loss compensation under the Act as they moved prior to 31st July 1974. I am raising this matter not in general terms but in the specific instances of the tenants of Cranworth House, Loraine Estate, N.7, and Asker House, Tufnell Park Estate, N.7. The compensation involved in the ex-gratia payments we are asking for amounts to under £22,000.

    Islington Borough Council has, over the past few years, undertaken a considerable amount of rehabilitation work on its older properties, mostly blocks of flats owned formerly by the Greater London Council. Two such modernisation and rehabilitation programmes were scheduled for Loraine Estate, on Chelmsford House and Cranworth House, and on Asker House. The tenants of Asker House were moved during the course of 1974 and the former tenants rehoused elsewhere. Whilst these tenants would not have been eligible for compensation for home loss under the Land Compensation Act 1973, they became eligible under the Housing Act 1974, which came into force on 31st July 1974.

    All the tenants of Chelmsford House were removed before that date, so I am concerned only with the situation which has arisen in the case of Cranworth House and Asker House. All the tenants of these two houses were informed of their pending removal at the same time and should have been moved by May 1974, when none would have been eligible for compensation, as in the case of the tenants of Chelmsford House. However, as most were moved after 31st July 1974, it seems to me that they should all be treated equally in respect of any home loss compensation.

    But the situation has arisen whereby seven tenants of Cranworth House and 26 of Asker House were not eligible for compensation since they moved before the qualifying date, 31st July 1974.

    I have here details of these tenants, supplied by the Islington council borough valuer, showing that the total compensation which would have been paid to them had they moved after 31st July would amount to £4,419 in the case of Cranworth House and £17,559 in the case of Asker House—an insignificant sum, as I am sure the House will agree.

    I appreciate that under the letter of the law—the Housing Act 1974—these tenants are not eligible for any home loss compensation. My concern is that a minority should be at a disadvantage compared with the remaining majority of tenants of these houses who moved after 31st July simply because they cooperated with Islington council by accepting the first offer of alternative accommodation made to them, thus moving before the qualifying date. They therefore, through no fault of their own, became ineligible to claim compensation while those tenants who either did not accept the first offer of alternative accommodation made to them, or who were not made an offer until a later date, became eligible for such compensation in spite of the fact that all had been given notice of removal on the same date.

    This differentiation in treatment has given rise to a considerable amount of bitter feeling locally and it is generally felt that all tenants of the houses concerned should have been treated on an equal footing regardless of the actual date of their removal. I therefore raised with the Islington council the question of making an ex-gratia payment to the 33 tenants concerned, and through the council the matter was raised with the Department of the Environment. In its letter of 14th March 1975, addressed to the borough valuer, the Department wrote:
    "The terms of section 130(2) of the Housing Act 1974 are quite specific in providing that the amendments to section 20 of the Land Compensation Act 1973 which were made by Schedule 13 of the 1974 Act—which confers entitlement to home loss payments on people moved permanently from their homes for the carrying out of improvement works—are effective only in the case of those displaced on or after 31st July 1974. Whenever a new provision, or as in this instance an extension of an existing provision, is introduced a firm starting date has to be laid down. It is understandable that people displaced before 31st July 1974 from the two blocks mentioned in your letter will feel aggrieved because they failed to qualify for home loss payments but I am afraid there is clearly no question of their being entitled to payments as the law stands. Nor would it be right for the starting date imposed in the Housing Act to be set aside by sanctioning under section 161(1) of the Local Government Act 1972 the making of ex-gratia payments to people who moved before 31st July 1974. The Secretary of State's power of sanction under the section is used exceptionally in those isolated cases where although the proposed expenditure would be illegal it would not be directly contrary to the relevant statutory provisions. The making of ex-gratia payments to tenants who were displaced before 31st July 1974 for the carrying out of improvements works would, it is concluded, be in conflict with the intention of the provisions in the 1974 Act and for that reason I am afraid sanction cannot be given."
    I particularly draw the attention of the House to the last section of this letter:
    "Nor would it be right for the starting date imposed in the Housing Act 1974 to be set aside by sanctioning under section 161(1) of the Local Government Act 1972 the making of ex-gratia payments to people who moved before 31st July 1974. The Secretary of State's power of sanction under the section is used exceptionally in those isolated cases where although the proposed expenditure would be illegal it would not be directly contrary to the relevant statutory provisions."
    My contention is that, since there is no question of a general request for ex-gratia payments to be paid to council tenants who moved prior to 31st July 1974, but only for sanction to be given by the Department to the 33 tenants of two particular blocks of flats so that they may be treated on the same footing as the majority of tenants of these flats who received home loss compensation, their cases are proper cases for sanction to be given by the Secretary of State under Section 161(1) of the Local Government 1972 Act.

    I therefore raised the matter with the Ombudsman. Sir Alan Marre has stated that there is no question of maladministration. In his letter of 1st August 1975 he said:
    "there is a provision in the Parliamentary Commissioner Act which expressly precludes me from questioning the merits of a discretionary decision in these circumstances. I must therefore conclude that there is no action I can take in this case."
    I take this to mean, and I am sure that the House will agree with me, that the discretionary decision could have been a different one and sanction could have been given by the Secretary of State for the Department of the Environment under Section 161(1) of the Local Government Act 1972 to the expenditure by Islington Borough Council to make ex-gratia payments to these tenants about whom I am concerned.

    This being the case, I consider that the decision for discretionary sanction by the Secretary of State to ex-gratia payments by Islington Council to these 33 tenants should be reconsidered. I urge this first so that all tenants of Islington council properties who were given notice of pending removal on the same date should be treated equally—by receiving either home loss compensation under the Housing Act 1974 or an ex-gratia payment under Section 161(1) of the Local Government Act 1972; second, because the sum involved is so small—less than £22,000; third, because this is a specific case which affects only 33 tenants in the Borough of Islington and will not and cannot affect others or be applied in other cases; and fourth, to enable the people of Islington to see that our Government are using their discretionary powers to ensure that justice is done, and is seen to be done, in cases such as this.

    I said that Islington has a vast housing programme of older properties and I give the council full credit for the job that it is doing—especially the housing committee. Like me, it wants the tenants treated fairly. That is why I appeal to the Minister to look again at the position with a view to resolving it satisfactorily.

    8.40 p.m.

    I am grateful to my hon. Friend the Member for Islington, North (Mr. O'Halloran) for raising this matter on the Adjournment. I appreciate the real concern which he has expressed on behalf of his constituents. I can assure him that I fully understand their feelings even though, as I think he may know, I shall not be able to give him an answer which gives them any encouragement.

    My hon. Friend quite rightly and movingly spoke of the often distressing circumstances in which many ordinary people, including council tenants, find themselves when they are forced to move from homes to which they have grown attached over the years to make way for redevelopment or so that a housing estate can be modernised and improved. I was myself a member of the Committee which considered the previous Government's Bill—now the Land Compensation Act 1973—which introduced home loss payments. Although welcomed by both sides of the House, these provisions were nevertheless very closely examined and keenly debated. We were indeed able to make a significant advance on the previous Government's original proposals by reducing the qualifying period from seven years' to five years' residence.

    As a Labour Government we have been able to extend the provisions still further through the Housing Act 1974. As a result, home loss payments can now be made to council tenants who have to move home so that essential improvements can be carried out. It is this further provision in the Housing Act which lies at the root of the problem my hon. Friend spoke of when referring to the unfortunate position in which some of his constituents found themselves when moved by Islington council from Asker House on the Tufnell Park Estate and Cranworth House on the Lorraine Estate.

    I join my hon. Friend's tribute to Islington council, which stands out among London boroughs and, indeed, among many local authorities, in the way that it is modernising its older council property in this way.

    The situation, as my hon. Friend explained it, was that, although the tenants were all apparently told by the council of their impending removal at the same time, some moved before 31st July 1974 and some after. The significance of that magic date is that it was the date on which the Housing Act 1974 received Royal Assent, and by virtue of Section 130(2) of the Act the new provisions which it introduced as respects home loss payments apply only to people actually displaced on or after that date. This means that those tenants who moved before 31st July 1974 had no statutory entitlement to a home loss payment whereas those who by chance happened to move after that date were more fortunate and did get payments.

    I can appreciate that those of my hon. Friend's constituents who missed getting a home loss payment will naturally find it difficult to understand why all the tenants involved in the modernisation scheme are not treated equally regardless of when they moved. As my hon. Friend has said, it will often have been the case that those tenants who were the most co-operative and accepted the first offer of alternative accommodation failed to get a home loss payment whereas those who were more selective and less prepared to accept the first dwelling offered to them might well as a result have secured for themselves the bonus of a home loss payment.

    I also recognise that many of the tenants have stressed how happy they were in their existing houses which they had furnished and decorated at no small expense and that normally they would have been quite unwilling to move, especially when this meant that they had to spend substantial amounts in order, for example, to curtain and carpet their new homes. The tenants excluded from receiving a home loss payment by the provisions of the Act will no doubt say—and I would not attempt to deny it—that they have suffered just as much distress and upheaval as their more fortunate neighbours, and, quite understandably, they feel very bitter about it.

    By comparison with the eloquent and moving manner in which my hon. Friend has argued on behalf of his constituents, I fear that my reply may seem cold and unsympathetic. Certainly I would not wish to give any such impression, and, as my hon. Friend will, I hope, accept, it gives me no pleasure to give an answer which I know he and his constituents will find it hard to accept.

    I can assure my hon. Friend that the Secretary of State and the Department have looked at this case very thoroughly to find a way in which we might assist. Nevertheless, there is another side to the coin and I am grateful to my hon. Friend for the opportunity afforded by this debate to explain briefly some of the reasons which lie behind the Department's policy in dealing with those cases.

    First, I should make it clear that this is not a new problem. It has occurred, I imagine, in the past with every new benefit conferred by statute where elegibility for a payment has to be defined by reference to some form of commencement date, and it will inevitably happen again. Indeed, the original home loss provisions of the Land Compensation Act 1973, which the Housing Act has now extended, were also tied to a starting date, in that case 17th October 1972—the date when the proposals were first made public in the White Paper which preceded the legislation.

    The circumstances that my hon. Friend has now described are virtually identical with the many similar cases which hon. Members on both sides of the House have in the past drawn to the Department's attention in connection with that first starting date. The most common case then was the slum clearance scheme, which resulted in some people being rehoused before the starting date and failing to get a payment, but others having the good fortune to move at the right time and so getting the payments they were entitled to. I think my hon. Friend will accept that the circumstances there are not so very different from those he has just described.

    But the answer we had to give then is the same as I must give now. The provisions of both the 1973 Act and the recent Housing Act are quite clear. Only those people who moved on or after the starting date—in the case of the Housing Act 1974, 31st July 1974, when the Act received Royal Assent—can have any entitlement to a home loss payment and there is no provision in either of the Acts for any discretionary payments to be made to those who moved before.

    It is a hard fact that whenever a new benefit like this is introduced there must be some starting date. Unlimited retrospection is just not feasible on grounds of either the expenditure involved or simple practicability. The further back in time that one takes any entitlement, the more difficult it is to ascertain the facts and determine whether or not the person was really entitled to a payment. In the case of the original provisions of the 1973 Act, the date of the White Paper was thought to be a justifiable starting date because advance notice had in fact been given of the new scheme.

    But the extensions to the 1973 Act, although important and valuable in themselves, were not central to the theme of the 1974 Housing Act and, therefore, no specific announcement was made of their impending introduction. It therefore seemed most appropriate in that case to choose Royal Assent as the starting date. I might add too, in fairness, that we could very well have decided to bring this particular provision into operation at a later stage by a commencement order, and, indeed, this was the way in which the rest of the Act was largely brought into effect. We decided, however, that entitlement should start as soon as the Act was passed and, therefore, made express provision to that effect. I hope hon. Members will accept that this action does at least demonstrate our concern that there should be no delay in making these benefits available to those for whom they were intended.

    But, whatever starting date we had chosen, the problem would have been the same. The moment one has a dividing line in any enactment it is inevitable that some people will fall on one side of it and some on the other, and to those who fail to qualify the choice of a starting date must inevitably seem arbitrary and unfair. Nevertheless, there is no real way round this, and, hard though it is for those who have been unlucky to accept the situation, I am afraid there is no remedy which I can offer in a case where the Act so clearly states that there is no entitlement to a payment.

    I must emphasise that point because it has been suggested by my hon. Friend that there is a solution to the problem and that it lies in the discretionary power which my right hon. Friend has under Section 161 of the Local Government Act 1972 to sanction extra-statutory payments by local authorities.

    I shall, if I may, try to explain a little of the nature of this power and of the policy which governs its use as I believe this is of central importance to the matter we are debating.

    The power is to authorise expenditure by a local authority which might otherwise have been subject to challenge by the district auditor. The district auditor's duty is to consider, in relation to the council's accounts, whether a council's actions have been ultra vires. He has powers—by application to the court, or certifying that money should be recovered from a person or persons—to seek redress wherever he finds that an item of account is contrary to law. All London councils are subject to the scrutiny of the district auditor. Any item of account which is sanctioned by the Secretary of State under Section 161 is thereby removed from the purview of the district auditor. In other words, he cannot apply to the court or certify items which the Secretary of State has sanctioned.

    These powers are used only in the most exceptional circumstances and only after the individual circumstances of each case have been thoroughly and carefully examined. This point is of cardinal importance. If Section 161 were widely invoked and extensively applied, the effect would be virtually a circumvention of statute—in short, legislation by administration. I am sure that no hon. Member on either side of the House could accept or sanction that. We are, therefore, obliged to be very strict in invoking that section.

    This is even more the case when we have a situation such as that which my hon. Friend has described. Here we have an express provision in a statute that only those displaced after a certain date shall be entitled to a payment. To use the discretionary powers under Section 161 in such a case would clearly be in contravention of the statute itself, and this, as I hope hon. Members will agree, cannot be accepted or condoned.

    My hon. Friend also had another point. He argued that this was an exceptional case and that, in view of the small number of tenants involved and the fact that the payments would not be substantial, the Secretary of State could use his discretionary power without creating any precedent. But, as I think the House will appreciate from what I have already said, this case is not unique. We had exactly the same sort of case in connection with the original starting date in the 1973 Act, and I can assure my hon. Friend that the case of his constituents is far from being the only one which has come to the Department as a result of the starting date in the Housing Act 1974.

    I cannot conceive that the House would think it just for the Secretary of State to single out this one case for special treatment, and for the reasons that I have given a general use of the power would be equally unacceptable.

    When, therefore, the Islington Borough Council wrote to my Department on 21st February this year asking for extra-statutory payments to be sanctioned for those of its tenants who had been rehoused before 31st July 1974 the Department was bound to refuse its application for the reasons I have given, and this it did, after careful consideration of the circumstances of the case, in its reply dated 14th March.

    In short, I have every sympathy with the circumstances in which my hon. Friend's constituents find themselves, and I assure him that I understand the way they must feel. I appreciate that my hon. Friend has taken this issue as far as any hon. Member could take it by raising it on the Floor of the House. However, there is no way in which I can alter the fact that as the law stands his constituents have no entitlement to a home loss payment.

    Question put and agreed to.

    Adjourned accordingly at five minutes to Nine o'clock.