asked the Secretary of State for Employment if he will make a statement on the current employment situation.

The rise in unemployment which began during the period of 3-day-week working has been halted and there is a strong demand for labour in most industries.

I thank my hon. Friend for that reply. Will he confirm that the Government regard the present unemployment figures as too high and will continue to pursue and maintain a policy of full employment as a first priority?

I accept that the figures are too high. My right hon. Friend the Chancellor of the Exchequer has made clear that, if necessary, he will introduce a second Budget to make any necessary adjustments to influence demand and to keep up the level of employment.

Is it the case that the Department of the Environment and other Government Departments are urging regional water authorities and other quasi local government bodies to place contracts with the construction industry as urgently as possible because of the serious position of that industry? If so, should not the Chancellor of the Exchequer make a statement about his policy in this public sector?

Those are both questions for other Departments, one for the Department of the Environment and the other for the Treasury. It is true that the construction industry has not been so buoyant, but it is hoped that the recent Government loan to building societies will help to stimulate demand in the housing sector.

asked the Secretary of State for Employment what are the latest indications of job vacancies and unemployed in Redditch.

In May the Redditch employment office held 514 job vacancies and the careers office held 206. There were 407 people unemployed and registered at the two offices. The vacancy statistics relate only to vacancies notified to the employment and careers offices and do not measure the total unsatisfied demand for labour.

In view of the figures given by the Minister, for which I am grateful, does he agree that from the point of view of employment there is no great hurry to take a decision about attracting large-scale industry to Redditch, and that we should come to a decision on the future size of Redditch without reference to the need to attract employment?

The hon. Gentleman probably has in mind the application which has been made for an industrial development certificate in the constituency which he represents. Matters of balance of employment between one part of the country and another are considered by the Department of Industry and I am sure that that Department will take those and other considerations into account.

asked the Secretary of State for Employment when the conciliation and arbitration service will come into being.

Consultations are now proceeding and I intend to establish the new service just as quickly as possible.

In view of the valuable contribution which has been made by the Commission on Industrial Relations during the past five years, will the Secretary of State give to the House the two assurances which he gave upstairs this morning, namely, that the CIR will not be wound up until its functions can be assumed by the conciliation and arbitration service and, secondly, that the valuable in-depth research and investigation work into certain aspects of industrial relations which has been carried on by the commission will be carried on by the CAS?

I do not think it is proper for me to refer to proceedings which have taken place in Committee. The proceedings will be reported to the House, when I have no doubt that those aspects can be dealt with. The undertakings I have given elsewhere certainly hold good in the House of Commons.

Does my right hon. Friend agree that the principle of the CAS has ready support from both sides of industry? Will he accept that the reason for that support is that people in industry, unlike some Conservative Members, understand the need for a genuinely independent body which can deal not only with conciliation and arbitration matters but also with the strategic functions now carried out by the CIR?

I agree with my hon. Friend. We are gratified at the response from both sides of industry to our proposals, and we hope that everybody will join in giving the new organisation a flying start.

asked the Secretary of State for Employment when he next expects to have a meeting with the TUC.

I keep in touch with the TUC all the time, but no formal meetings have been arranged for the immediate future.

I am delighted to hear that the right hon. Gentleman keeps in touch. When he next meets the TUC will he explain why yesterday in Luxembourg his Department, on his instructions, vetoed a most important new EEC proposal to give workers special rights in the event of large-scale dismissal? Did he veto this matter because he did not have time to get Mr. Scanlon's authorisation first, or was he simply trying to make the Foreign Secretary's task of renegotiation more difficult?

The hon. Gentleman is not correct to say that a veto was applied. What we did was to exercise our right to put our point of view on the question which was before the Ministers. We explained that we were in consultation with the TUC on this among other subjects and that the proposals contained in our employment protection Bill go a great deal further than those discussed in Brussels. We did not apply a veto, but we put our case clearly. It was well understood by the other members present.

How does the right hon. Gentleman assess his chances of convincing the TUC of the Chancellor of the Exchequer's view that what happens to wages is the key to the control of inflation this year?

I do not think that the quotation which the hon. Gentleman purports to select from my right hon. Friend's speech gives a proper indication of what he actually said. We believe that the TUC and the Government will arrive at views which are compatible one with another in dealing with the situation. I hope that the hon. Gentleman and others will wait a little longer so that they will see what we have been preparing. I am sure that when that time arrives they will see how wise our preparations have been.

asked the Secretary of State for Employment what estimates he has made of the effects on employment of the blacking by AUEW members of defence equipment under construction and maintenance for foreign Governments.

I am not aware that any workers are likely to lose their jobs as a result of action by the AUEW.

Will the hon. Gentleman take an interest in the comments made by Air Vice-Marshal Menaul, Director-General of the Royal United Services Institute for Defence Studies, who estimates that if defence orders are turned aside the loss of employment could amount to 20,000 jobs and the loss of exports could involve £2,000 million over five years? Will he also bear in mind that, as events in Ireland have recently shown, it is not always the Left wing which takes the initiative and that he might be stoking up trouble for himself if he goes along with the present trend?

The hon. Gentleman is getting a little excited about industrial action by 20 workers. Perhaps he will convey to the gallant gentleman whose name he mentioned that it is no part of my Department's policy to solve the unemployment problem by indiscriminate sales of weapons and arms to racialists, Fascists and military dictatorships.

Is my hon. Friend aware that I agree with the comment made by the hon. Member for Chingford (Mr. Tebbit) that it is not always the so-called Left wing that causes blackouts or the blackings into which the Leader of the Opposition, when Prime Minister, plunged the country only a few months ago? Can my hon. Friend say how many man days were lost as a result of that blacking?

Not without notice, but it was a very high number.

Will the hon. Gentleman say when a contract is not a contract?

Not without notice.

asked the Secretary ol State for Employment if, in his proposals for increased industrial democracy, he will provide for participation by management in the decision taking of trade unions.

I can assure the hon. Member that where managers become members of appropriate trade unions they have the usual opportunities to participate in the decision taking of those trade unions.

May we assume that 50 per cent of the elected members of company managements and shareholders will be appointed by Government legislation to trade union executives, or is the Government's proposal for participation and industrial democracy merely a one-way process?

One of the prime functions of a trade union is to look after its members. It is right that those members alone should participate in the union's decision making. The operations of a company have to take account of the interests not only of management but of shareholders and workers. The responsibility in these cases should be shared, and we believe that in making provision for these matters in the industrial democracy Bill these mutual interests, even where they conflict, will be properly represented.

Does not the hon. Gentleman agree that one of the greatest hindrances to economic growth resides in the wasted energy of endless industrial strife and the fact that an increasing number of people in management and trade unions now recognise the need for profit sharing and participation in industrial democracy to get ourselves out of the present situation?

I very much appreciate the hon. Gentleman's comments. We believe that a successful extension of industrial democracy will avoid many of the disputes that now take place and will make for a more efficient operation of industry.

Does the hon. Gentleman agree that if that process is to take place—and it is desirable that it should— it must mean that the trade unions should be seen to have rules which make them responsible to their companies and to the community as a whole?

Trade union rules are matters for the trade unions, just as the rules of employers' associations are matters for those bodies. I have no reason to believe that the existing rules of employers' associations and trade unions will be allowed to stand in the way of a proper extension of industrial democracy.

asked the Secretary of State for Employment what preparations are being made by his Department to counter the effect on employment of cuts in defence expenditure.

asked the Secretary of State for Employment what consideration he is giving to finding alternative employment for those employed in defence industries who may be affected by the Government's defence expenditure review.

asked the Secretary of State for Employment what studies he has made about ways in which reducing armament manufacturing may be phased together with increases in civil production to avoid loss of employment opportunities.

The employment implications of a revision of the defence programme are being studied as an integral part of the review.

I thank my hon. Friend for his reply. Does he agree that the present scale of the armaments industry represents a burden on the economy which we have carried for too long and can no longer afford to support? Does he accept that if the economy is to benefit from a reduction in the arms industry it will do so only if attention is properly drawn to consultations with the Secretary of State for Defence on the cuts which he proposes to make in the arms industry so that the manufacturing resources thus freed are fully redeployed?

I am grateful for my hon. Friend's support for a reduction of several hundred million pounds in defence expenditure. The way in which the review takes place must take into account the needs of defence in areas which may experience a greater level of unemployment. This matter will be subject to consultation. It is important to examine means by which savings in manpower can be effected in areas where there may be a shortage of labour.

When will the hon. Gentleman remove the uncertainty about the defence aspects of arms supplies which are affecting jobs and causing worry to many people? In the specific case of the supply to Saudi Arabia of arms worth millions of pounds, will the Government make it clear whether they approve of the state of democracy in Saudi Arabia and the facilities given to free trade unions there, so that workers employed in producing weapons for that country will know that the Government are prepared to let them continue to do so?

The Question relates to a review of our domestic defence expenditure, which is being undertaken in the first instance by my right hon. Friend the Secretary of State for Defence.

Bearing in mind that the Government have inherited a £4,000 million deficit and that we are spending more on defence than we can afford, we expected a massive reduction in defence expenditure and one of the arguments used was that it would involve the loss of a great many jobs. Will my hon. Friend's Department prepare suitable work for the people involved in terms of constructive employment in the building of houses, meeting other needs of the country and solving our balance of payments problems?

It must not be forgotten that we have far fewer reserves of labour than many other countries. In the first instance the decisions must be taken by my right hon. Friend the Secretary of State for Defence. But we shall examine the manpower implications and ensure that we use our manpower in the best way possible for peaceful purposes.

If defence cuts of the size suggested are imposed and if the present rate of inflation continues, we shall be left with no defence at all. In the meantime, will the hon. Gentleman consult his right hon. Friend the Secretary of State for Defence to let the workers in Chatham Dockyard know exactly what is their future?

Of course people will be anxious to know their future, and the Defence Department will take into account employment implications in its review. The proposal is to effect savings of several hundred million pounds. However, I cannot agree, even by the widest stretch of the imagination, that that would leave the country defenceless.

asked the Secretary of State for Employment what steps he is taking to hasten the implementation of Article 6 of the EEC draft directive No. 67/548, 1967 on the marketing of hazardous products; and what interim steps he is taking to implement the objectives of Article 6.

Directive 67/548 is an adopted directive concerned with the labelling of industrial chemicals which will make a useful contribution to the improvement of industrial safety. My Department is therefore anxious to implement it as quickly as possible. However, a number of important amendments are being prepared by the European Commission in order to bring the directive up to date and make it more effective. My Department is playing an active rôle in this work, in consultation with all major United Kingdom organisations which have an interest. Steps will be taken to implement the directive as soon as the major amendments have been agreed.

Is the hon. Gentleman aware that his reply illustrates the futility of transferring to his Department responsibility for the marketing, labelling and packaging of hazardous consumer products, which were the subject of my Question? What is more, I know what the remainder of the directive is about. Is the hon. Gentleman aware, further, that more than 8,000 children a year are admitted to hospital, some of whom are maimed and others of whom die, as a result of the sale of these hazardous products? Are not we lagging behind other countries with regard to precautions such as protective packaging and adequate warning labels? What is the view of the hon. Gentleman's Department about the report of the Sub-Committee on Social and Economic Affairs of the EEC on future amendments to the directive?

The hon. Lady is aware that amendments are being considered by the EEC. Therefore, having regard to the enormous amount of time and expense involved in the basic redesigning of labels, we believe that it is advisable to wait for the amendments to be decided. I think that the hon. Lady overlooks the fact that the directive does not deal with medicinal products.

Mr. Molloy.

rose—

On a point of order, Mr. Speaker. In view of the unsatisfactory and derisory nature of the Minister's replies, I beg to give notice that I shall seek to raise the matter on the Adjournment as soon as possible.

Further to that point of order, Mr. Speaker. If I am correct, I understood you to call me, and my supplementary question ought not to have been precluded by the hon. Member for Gloucester (Mrs. Oppenheim).

If an hon. Member raises a point of order of the kind that the hon. Member for Gloucester (Mrs. Oppenheim) has done, I am afraid that it shuts out further supplementary questions.

asked the Secretary of State for Employment how many registered disabled people in the Southampton area were unemployed at the latest available date; and what percentage this represents of the total number of registered disabled in the area.

On 13th May the number of unemployed registered disabled people in the Southampton area was 321. This represented 8.8 per cent. of the total number of registered disabled people in the area.

Can my hon. Friend show how those figures compare with the previous figures and with the national average?

I can give my hon. Friend a comparison with the previous year. If he wants me to go back any further, perhaps he will write to me. There has been a welcome improvement in the employment position of registered disabled people both nationally and in the Southampton area compared with the preceding year. Nationally the number of unemployed registered disabled people fell from 74,253, or 12.4 per cent. of the register, in May 1973 to 61,506, or 10.7 per cent. of the register, in May 1974. In the Southampton area the figure fell from 398, or 10.7 per cent., to the figure which I gave in my answer of 321, or 88 per cent.

What steps is my hon. Friend taking to continue this very welcome trend?

The House will know that the employment of disabled people is one of the matters that we have under review. We have received comments on the consultative document put out earlier by the Department, and we are proceeding with this with all possible speed. We hope to be able to report something to the House very shortly.

asked the Secretary of State for Employment if he is satisfied with the current progress of the social compact in respect of white collar and managerial trade unions.

asked the Secretary of State for Employment if he is satisfied with the progress being made on the social contract.

Good progress, I believe, is being made in my discussions with others concerned about the arrangements which are to follow the abolition of compulsory wage controls.

Would not it be wise and realistic to acknowledge that the reaction of the white collar and managerial unions is decidedly less than enthusiastic towards the social contract? In view of the fact that tomorrow the executive of NALGO will be presenting to its conference a highly critical resolution on the TUC General Council's relationship with the social contract, would not this be a convenient opportunity for the right hon. Gentleman to comment on the resolution?

I do not know about commenting on the resolution, but I am happy to comment on the hon. Gentleman's supplementary question. Everything that I have heard from the white collar and managerial trade unions concurs with the view that they wish to see the removal of compulsory wage controls. Whatever variations there may be about what should follow, there is growing support for that. I think it is almost unanimous now that wage controls should be removed, and I am glad to see that the white collar unions are in full support of that aspect of Government policy.

Is my right hon. Friend aware that 3,000 London schoolchildren were sent home today because of the dissatisfaction of their teachers with the present state of their pay structure? Is he aware, further, that there is a great need for urgency in the inquiries which have been launched into the pay of both teachers and nurses? Can my right hon. Friend say when he expects those two inquiries to be completed so that we may give teachers, nurses and others a clear view of what their future pay structure is likely to be?

I appreciate what my hon. Friend says about the urgency of these matters. It is not for me to state the exact dates when this will happen because these matters fall within the responsibilities of the Department of Education and Science and, in the case of nurses, the Department of Health and Social Security. But we are trying to have these inquiries and reviews speeded up as much as possible. As my hon. Friend is aware, we have also arranged that the awards under the reviews shall be backdated. Therefore, I think the teachers will believe that the present Government have done their very best to meet the situation and to assist them generally. There is a further Question on the Order Paper relating to these matters. There will, however, be these full-scale reviews. We want them completed as soon as possible. In any event the resulting awards will be backdated, and that is one of the conditions for which the teachers have asked.

Will the right hon. Gentleman consider extending the social compact to envisage the possibility of a strikes holiday? Does he accept that if such an extension were made it could have a practical effect on the national economy in which there would be major advantages for employers to offer substantial increases in wages in order to encourage such a situation to be brought about?

Yes, we are doing everything possible to try to create the conditions whereby there can be industrial peace. That is one of the major reasons why we are getting rid of the 1971 Act. We think that is an essential process in trying to restore the prospect of industrial peace. But we are also taking action in every individual case in which we can. We cannot say that we are successful in every case, but we think that we have had quite a number of successes. For example, in the engineering union an overtime ban was proposed under the previous regime but we created conditions whereby that ban has been lifted and the prospect of industrial peace has broken out in the engineering union. We have not had much commendation from Opposition Members about it, but I am sure that they will come round to that point of view in the end. We are doing our best in every possible case to ensure industrial peace, which has to be sustained. But we know that in order to do that we have to create proper conditions for it, and that is what we are trying to do.

asked the Secretary of State for Employment if he will take steps to increase the maximum figure of redundancy payments, in view of the decrease in the value of the £ sterling.

My right hon. Friend is prepared to consider proposals for desirable changes to the statutory redundancy scheme. They will be included in the forthcoming employment protection Bill and my hon. Friend's suggestion will be considered in this connection.

That is very welcome news, because due to the growth of technology more and more workers are now reliant on the Redundancy Payments Act. This statement by the Minister will be very welcome indeed.

I am grateful for my hon. Friend's remarks.

asked the Secretary of State for Employment if he will prepare plans for the democratic election of workers' representatives to the boards of nationalised industries: and if he will make a statement.

As I promised on 18th March in reply to a Question from the hon. Member for Christchurch and Lymington (Mr. Adley)—[Vol. 870, c. 30]—the Government are considering ways of making the managements of nationalised industries more responsible to the employees in the industries as indicated in our election manifesto.

I thank my hon. Friend for that reply. Does he not accept, however, that the nationalised industries should be the pacemakers in industrial democracy? Will he consult the unions about producing a plan in this respect? Will he accept that the principle of public ownership would have much wider acceptance if it seemed to be Socialist in character?

The special conditions that apply to a nationalised industry in this respect depend to a very large extent upon the form in which the industry is nationalised and the terms of the Act. However, I am convinced that there is a will to negotiate and to determine matters in nationalised industries, as has been evidenced by developments in the National Coal Board, which bodes well for an extension of nationalised industry. I take my hon. Friend's point. We are to have a number of discussions with trade unions in preparation for our industrial democracy Bill which will reflect, I hope, the possibilities which exist in the public sector which would enable these industries to become pacemakers in this respect.

Is the hon. Gentleman aware that most nationalised industries already have a difficult enough time in making ends meet without the addition of a large number of ghost directors, whose main preoccupation would surely be that of improving the lot of employees?

The efficiency of nationalised industries, as of industries in the private sector, can be considerably improved by having effective schemes for industrial democracy and by the promotion of effective representation of workpeople's interests in these firms and industries.

asked the Secretary of State for Employment what advice he has given to metropolitan boroughs regarding the licensing of employment agencies; and whether he will make a statement.

My officials wrote to the chief executive officers of licensing authorities designate, including the metropolitan district councils, in England and Wales on 1st February 1974 drawing attention to their forthcoming responsibilities under the Employment Agencies Act 1973 and to the need for some preliminary consideration to be given to the organisation of the task.

Is my hon. Friend aware that three employment agencies control over 400 branches throughout the country? Is he further aware of the element of profit made by those branches when industry, both private and public, buys back the skills and talents already developed by taxpayers' money in terms of education and training? Will he instruct local authorities to control the mushrooming of these agencies? Furthermore, will he look to his own Department and consider developments to make it much more attractive as an employment agency?

On the latter part of my hon. Friend's supplementary question I hope that the improvements which are now taking place, which I think all hon. Members will have noticed in their constituencies—the creation of jobcentres and so on—will be seen by her as a positive response to that for which she is asking. On the earlier part of my hon. Friend's question, I am sure she will recognise that the Employment Agencies Act is a significant step forward in what has been for many years an unregulated field. She is absolutely right when she talks about a mushrooming of these agencies. Hence the importance of the Act and the urgent need to produce the regulations for which the Act provides. I hope that within a very short time we shall be sending out draft regulations for consultation to interested bodies such as the CBI, the TUC and others.

Is the hon. Gentleman aware—I am sure he is—that when the Employment Agencies Bill was going through the House and when it eventually became an Act it was obvious that the private employment agencies were very glad to have the Act on the statute book, and that there has all along been full co-operation from them? As the hon. Gentleman has said that draft regulations will soon be sent to interested bodies, can he give a date when the regulations might be functioning?

I agree with the hon. Gentleman that the Act was warmly welcomed by the more reputable agencies, the highly-respected and long-established agencies, because of their concern about some of the apparent malpractices that were growing up among certain agencies. On the latter part of the question, the draft regulations are now on my desk. I am hoping to clear them by this afternoon and, therefore, to have them available for the consultative process very quickly indeed.

asked the Secretary of State for Employment what recent discussions he has had with the TUC on the merger of trade unions in specific industries to form single craft unions for such industries; and if he will make a statement.

My right hon. Friend has had no such discussions. It would be a matter for the trade unions themselves.

In view of the many difficulties that occur in industry due to inter-union rivalries, may we take it that one of the first tasks of the new conciliation and arbitration service will be to promote and facilitate the merger of unions in certain industries?

The trade unions have shown themselves well able to manage their own affairs in this respect. In recent years there has been a continuing process of amalgamations. In 1961 there were 655 unions with nearly 10 million members, whereas at the end of last year there were fewer than 500 unions, representing over 11 million members. There was, therefore, a reduction during that period of over 150 unions. One should relate this reduction to the number of employers' organisations. There are over 1,000 employers' organisations. The hon. Member might consider urging employers' associations to amalgamate.

Does it make my hon. Friend feel a little sick to hear the statistics coming from the Opposition about amalgamations of unions when within the last two or three years Conservative Members, assisted by the Government Front Bench when they were in office, have been actively engaged in trying to get unions to splinter off and to register when the rest of the trade union movement was refusing to register, and have been encouraging associations of registered trade unions to work in conflict against the established trade union movement?

I agree with my hon. Friend, who has described admirably one of the adverse effects of the 1971 Act.

Surely the Minister will accept that industrial disputes arising from inter-union rivalry damage the economy. Can he, however, give any instance of a dispute between employers' associations which has led to damage to the economy?

Disputes between employers' associations ostensibly come to light often only in the form of firms going bankrupt or rationalising facilities, which leads to curtailment of employment prospects.

asked the Secretary of State for Employment if he will make a further statement in relation to nurses' pay.

I explained to the House on 6th May that I was able under the existing legislation to apply my powers of consent in respect of the pay increases sought for nurses, teachers and Post Office workers only to certain special problems where there were exceptional circumstances. I have never had any doubt, however, that nurses and these other two groups have suffered particularly badly under the policies pursued by the last Government; and now that we can look forward to seeking parliamentary approval to abolish the statutory pay controls as soon as possible in July after the Prices Bill is enacted, the Government have thought it right to set in train action to give them a remedy as quickly as possible after the statutory controls have gone. On this basis the Government have provided for independent inquiries to be held into the pay not only of nurses but also of teachers and have agreed that the Post Office should seek to remedy the position of some of its staff in negotiation with the unions concerned.

I thank my right hon. Friend for that neat and comprehensive statement, which will give justifiable confidence to the groups of workers he has mentioned. May I put to him the fact that yesterday a large number of nurses, organised by their trade union, the Confederation of Health Service Employees, with which I have associations, lobbied the House and were able to make it clear that the nurses more than almost any other group have suffered enormously— [HON. MEMBERS: "Question."] It is regrettable that Conservative Members should show such intolerance whenever the nurses are mentioned.

Order. That is an abuse of the supplementary question system. The hon. Gentleman must ask a brief supplementary question.

With great respect, Mr. Speaker, if you had been standing where I am trying to put my Question, you would have heard quite a lot of other abuse. I was going to say to my right hon. Friend—

Order. The hon. Gentleman should be one of the last hon. Members to object to sedentary interruptions.

Is my right hon. Friend aware that in their campaign the nurses are ever mindful of the patients they serve and they firmly believe that they will obtain justice under the present Government? Is he also aware—

Order. We have had enough now.

I am most grateful to my hon. Friend for his questions, and I hope he will continue to put them, from whatever position he may select. We appreciate that the nurses have a strong case. That is why the Government have gone very far to meet what they propose. Some of the organisations representing nurses, or one of them at least, are still pressing the claim for an interim payment. I understand the reason why they put that case, but there are great difficulties for the Government in agreeing to interim payments, even for such an excellent case as that of the nurses, because of the possible effects in many other sectors. I believe, however, that when the Government decided to backdate the agreement that was to be the result of the review, they were going very far to meet the just claims that the nurses are making.

Does the right hon. Gentleman agree that the remarks of his hon. Friend the Member for Ealing, North (Mr. Molloy) about the Opposition's attitude on nurses' pay are totally unjustified? Does he also agree that, with the arrangements that have been made for an inquiry and the backdating, it would be most reasonable and in the interests of the whole nation that the industrial action of COHSE should be called off? We in the Opposition would strongly support that, as we also strongly support the need for a good deal for the nurses.

I do not think I should intervene in the quarrel between the right hon. Gentleman and my hon. Friend.

Quarrel?

It was an argument. The right hon. Gentleman was asking for my protection, and I do not see why I should give it. But I agree with the right hon. Gentleman and with what my right hon. Friend the Secretary of State for Social Services has already said on the subject. In view of what the Government have done, I think it is much more sensible that the industrial action should be called off. I believe that in a few weeks' time everyone will recognise that the Government, in preparation for the changeover from the compulsory system to the voluntary system, have taken reasonable steps to help not only the nurses but the teachers and the Post Office workers.

asked the Prime Minister whether the public speech of the Chancellor of the Exchequer to the annual dinner of the Confederation of British Industry in London on 14th May about the Government's attitude to profit and the private sector represents the policy of Her Majesty's Government.

asked the Prime Minister whether the public speech of the Chancellor of the Exchequer on the economy at the CBI dinner on 14th May represents Government policy.

asked the Prime Minister whether the Chancellor of the Exchequer's public speech to the CBI on economic policy on 14th May represents the Government's policy.

asked the Prime Minister if the public speech made by the Chancellor of the Exchequer to the CBI on economic affairs on Tuesday 14th May represents Government policy.

asked the Prime Minister if the public speech of the Chancellor of the Exchequer to the CBI on economic matters on 14th May represents Her Majesty's Government's policy.

asked the Prime Minister whether the speech of the Chancellor of the Exchequer on 14th May to the CBI on the profit motive represents Government policy.

I would refer the hon. Members to the reply which I gave on 21st May to the hon. Member for Derbyshire, South-East (Mr. Rost).—[Vol. 874, c. 108-9.]

Can the Prime Minister explain what is the use of the Chancellor saying that his Government —by which he presumably means the Government to which he belongs—believe in the need for profitable investment when the Secretary of State for Industry is busy fashioning his oddly-named Enterprise Board to nationalise what he picks out as the key sectors of the economy? Can the Prime Minister at least tell the House which side of the argument he is on, or is he, as usual, a "don't know"?

In the speech to which the Questions refer, my right hon. Friend the Chancellor repeated what has been said by myself, by him and by others on a number of occasions now and under the previous Government. As far as I am aware, what my right hon. Friend the Secretary of State for Industry has been saying is entirely in accordance with the manifesto which we presented to the country during the election. [Interruption.] It is entirely consistent with that. When my right hon. Friend the Secretary of State is ready to make statements to the House with the full authority of the Government, having brought them before the Government, the hon. Gentleman will be able to study what it is he will be voting upon. 1 support the manifesto on which we fought the election. I have never found out whether the hon. Gentleman supported the manifesto on which he was elected in 1970.

In his speech the Chancellor said that he believed in private industry that was vigorous, alert, imaginative and profitable. Is the Prime Minister saying that to nationalise the largest companies, which it is the policy of his right hon. Friend the Secretary of State for Industry to nationalise, is likely to make them more vigorous, more alert, more imaginative or more profitable, particularly in the light of his own remark that he was not in favour of raising the efficiency of Marks and Spencer to that of the Co-op?

It was not my remark. I wish I had thought of it, but I only repeated it. It was originally made by my right hon. Friend the Secretary of State for the Environment. Everyone gets credit for his own. My right hon. Friend the Chancellor was exactly stating the Government's position. I thought that successive Governments believed in a mixed economy and that the argument between us over a quarter of a century, or perhaps more, has been about where the boundaries should be drawn between the private and the public sectors. I hope that all the adjectives quoted by the hon. Member for Blaby (Mr. Lawson) are the desire of all of us, on both sides of the House, for the private sector.

Does my right hon. Friend agree that there is something fundamentally wrong with the imaginative private enterprise system if it needs an injection of between £2 million and £4 million a day subsidy from the taxpayer?

In commenting on private ownership in industry I have never thought of using words as strong as those used by my predecessor about capitalism. It has been the desire of successive Governments to ensure that private ownership should be responsive to the needs of the community in a wider sense than considerations only of its private profit. That is what the Leader of the Opposition was referring to on a famous occasion. I remind Conservative Members who are upset about take-over by due legislative process that a relatively small firm such as Slater Walker has carried out far more take-overs than those proposed at any time by my right hon. Friend the Secretary of State for Industry.

In view of the optimism of the Chancellor's speech, may I ask the Prime Minister whether he accepts the National Institute's forecast that production is likely to remain stagnant and investment is likely to fall?

I do not think my right hon. Friend was noticeably optimistic. What he said was realistic. The National Institute for Economic and Social Research, for which we all have great respect, has given its views. It is difficult for it, for the Government, the Opposition or anyone else at this moment to form a very clear view because the indices on which all of us have to work are still not sufficiently up to date in relation to the period following the three-day week. All who are making prognoses for the future are using figures based on either the three-day-week period or the period immediately after it.

Would the Prime Minister care to define for the benefit of the House and industry generally what the Chancellor meant by "proper social use of profits", as it would appear that profits are not permissible unless proper social use is to be made of them?

I think that my right hon. Friend, who will no doubt be glad to develop this more fully in the continuing debates on his Budget, had in mind a number of aspects of "proper social use". The most important social and economic use is for profits to be ploughed back for investment purposes rather than to be distributed.

How does the Prime Minister reconcile the Chancellor's attempts to allay fears of nationalisation with the attempts of the Secretary of State for Industry to boost such fears? Is not this irreconcilability between the right hon. Gentlemen having a disastrous effect on investment?

I have already answered that twice this afternoon. My right hon. Friend the Chancellor was talking about the private sector of industry. As I have tried to say, there may be arguments between us about where the boundaries should be drawn between private and public industry. This is one of the things dealt with in our manifesto and repeated by my right hon. Friend the Secretary of State for Industry. In a mixed economy there must be an adequate degree of economic success within the private sector. That was what my right hon. Friend was saying.

Is the right hon. Gentleman aware that the Chancellor's words do not tie in with the Government's actions and that higher taxes, price control and the possibility of vastly increased wage claims are leading to a crisis of confidence in industry which is already showing itself in a failure to make investment decisions? If the Government really believe in profitable private enterprise, will they reverse some of the disastrous economic policies upon which they have embarked?

The hon. Gentleman is rather misunderstanding the situation. He has referred to extortionate wage claims. There have been substantial increases in wages recently in view of the operation of the threshold which was supported by our party and carried through by the party opposite in what I think was then a mood of optimism based on the belief that there would be a rather lower rate of increase in world prices. I do not think that the hon. Member is justified in saying what he has said about wages at present. As for investment intentions, investment under the previous Government never got back to the figure at which it stood in 1970. The reduction in investment intentions over the past few years occurred well before the Budget. A number of other surveys of investment intentions—the CBI and the Financial Times surveys, for instance—confirmed that. The main cause of this reduction was the general uncertainty following the energy crisis. It was the energy situation and the three-day week which more than anything else cut back confidence in British industry.

Would my right hon. Friend be prepared to comment—in this doom-laden situation about which we hear so often—upon the fact that Sir William Armstrong, head of the Civil Service, is to receive £34,000 as head of the Midland Bank plus an £8,000 pension? If there is enough money around to pay that kind of salary and pension to this man, why do we so often hear talk about there not being enough in the same pot for the workers?

I have already answered questions about Sir William Armstrong and I have nothing to add to what I said on that occasion. Certainly in so far as the questions are about profits—and most of them have been today, arising out of my right hon. Friend's speech—it is a fact that every week in the Sunday Times Business News one can see the profit figures for the previous year. The current figures show substantial increases. It is a fact, which my right hon. Friend welcomed, as I do, that a considerable part of any increase in profits being earned today is earned because more industrialists, who face fairly strict price controls as a result of the activities of both Governments, are turning more to exporting. In the current situation there is a chance of earning more profits in this direction as well as helping our balance of payments deficit.

Is the Prime Minister aware that he has amply demonstrated this afternoon that it is impossible to reconcile the statement of the Chancellor at the CBI dinner with the statement of the Secretary of State for Industry? Is it not a fact that the real policy of the Government is that expressed by the Secretary of State for Industry and that the remarks of the Chancellor about profitability were added as an afterthought to his speech, as a sop to the industrialists who were present, at a time of rapidly declining investment? The Prime Minister asked my hon. Friends to await a statement to Parliament from the Secretary of State for Industry. Is it not also the fact that his plans have just been published by Transport House in a document headed "The Current Work Programme of the Department of Industry. Note by Tony Benn"? What exactly is the constitutional position of this document? Have the Government now handed over complete control of their policy to Transport House? Have they abdicated the work of government, and are all future statements on policy to be issued by Transport House instead of by the Department to Parliament?

The right hon. Gentleman, as the architect of our investment decline, is now seeking to find an excuse to get away from his responsibilities. [HON. MEMBERS: "Answer."] Before I answer the right hon. Gentleman's hysterical questions, and I have already dealt with the earlier parts of them three times this afternoon, I will point out to the right hon. Gentleman that no Prime Minister has ever been more confident about increased investment than he was as soon as he had negotiated the terms for entry to the Common Market. He spoke at the Guildhall and called on industry for a massive increase in investment, which never happened. Investment never got back to the 1970 figures.

The Prime Minister cannot be allowed to get away with that. This is a document which by all constitutional processes ought to be published either by the House or by the Department concerned. Instead of that, it is clear from its title that the working programme in the Department is now being issued in a document by Transport House. If that had happened under the last Government, the right hon. Gentleman would quite rightly have criticised us for issuing such a document through Central Office in Smith Square. The Prime Minister must take this matter seriously and recognise that if he is now to abdicate government to Transport House he had better say so openly, so that we know where we stand.

I am surprised (hat after three months of it the right hon. Gentleman does not know where he stands. The rest of the country knows. I am surprised to hear questions from him on these matters because whenever he could do so he made his statements outside the House of Commons, at televised Press conferences in Lancaster House, from Conservative Central Office, the Tory Party conference and so on. There has never been such a record— [Hon. Members: "Answer the question."] I have answered the question. I know that Conservative Members do not want to listen to the answer, but I will give it to them for the fifth time. The work being done follows the work on the manifesto that we put openly to the country in the General Election, and when the priorities are decided by the Government the results of our work will be brought to the House. The right hon. Gentleman will then have adequate opportunity in the years ahead to debate the successive development of these programmes.

On a point of order, Mr. Speaker. In replying to a supplementary question on Question No. 1 the Under-Secretary of State for Employment said that, if necessary, the Chancellor of the Exchequer would introduce a second Budget. Since the right hon. Gentleman said when he introduced his Budget in March that there would be a second Budget, can you arrange for a statement to clarify matters?

I do not detect anything for the Chair in that.