THE DIVIDED NATION

§ Mr. Speaker

Before I call for the motion to be moved I should inform the House that I have not selected the amendment standing in the name of the right hon. Member for Devon, North (Mr. Thorpe)—at end add 'and notes that the postures of the Conservative and Labour Parties contribute directly to the division of the nation'.

§ Mr. Michael Foot (Ebbw Vale)

I beg to move, That this House, recognising that an international energy crisis has come on top of an acute national crisis, condemns Her Majesty's Government for its economic mismanagement which has led to the largest balance of payments deficit in our history, to massive inflation which the Government has done little to check, and to deepening divisions in our society ; and believes that policies of social justice and much greater equality of wealth and incomes are essential to provide the basis on which the country can unite to overcome its economic difficulties. One of the origins of the motion was the extraordinary events of last week when there was discussion on the possibilities of a General Election. I hope that the House will permit me to make a brief reference to those extraordinary events before I proceed to more sombre matters.

I have never taken the view—at any rate up until the week before last—that the Prime Minister was likely to call an early General Election. The reason why I took that view so strongly was that I thought that for him to do so would be in defiance of his character. I thought that the Prime Minister was not a gambler with the fortunes of the Conservative Party, whatever may be his attitude towards the national finances, and that he had always displayed to us and to the country a misplaced sense of confidence in his ability to deal with the difficulties facing the nation. Therefore, I had always believed that the Prime Minister was likely to retain office almost as long as the parliamentary limit allowed. Indeed, this view was somewhat confirmed 1209 when the Secretary of State for Employment came back from Ulster.

When I was travelling down to my constituency on the Friday before last I was surprised to hear on the radio that Mr. Willie Whitelaw was to take part in the "Any Questions" programme that night. I was the more surprised because I had heard his speech in the previous debate and perceived that he did not know any of the answers. I listened most eagerly later in the evening to hear the right hon. Gentleman and was gratified to hear a familiar voice on the "Any Questions" programme telling us that we should not be at all concerned about the reds under the bed, we should be much more concerned about the Fascists in the bed. Only after I had listened a little longer did I discover that it was not Mr. Willie White-law but Miss Billie Whitelaw. I congratulate her. I thought she made a most powerful contribution to our national debate.

However, I was much shaken on the Sunday before last when most of the newspapers appeared to believe that an election was certain, and when indeed all the popular newspapers agreed with all the correspondents in the posh newspapers I was driven to the extraordinary conclusion that even Miss Nora Beloff had got it right. I was momentarily shaken in my belief that there would be no General Election. And then we had the events of last week. Despite all the prophecies of an early appeal to the polls, it appears that the decision has wavered in the opposite direction.

I am still wondering what may have been the cause of this change. Was it the skilled diplomacy of Mr. Len Murray and the TUC—and I am sure the whole nation pays tribute to them—or was it the timely and kindly intervention of the right hon. Member for Wolverhampton, South-West (Mr. Powell)—and I am sure that part of the nation pays tribute to him—or was it the speech of the Governor of the Bank of England? It is not so easy to deal with him in a General Election. My best suggestion to the Prime Minister—and I hope that my advice will be passed on because it might be useful whenever we get the election—is that he should try drowning him in Lord Rothschild's think-tank, if there is still any room left among those sodden 1210 corpses. I will return to the Governor of the Bank of England in a few moments.

I wish to begin my remarks by dealing with what I regard as the most immediately serious aspect of our situation. I refer to the mining dispute and the prospect of a settlement. I hope that the House will permit me to approach this matter as a representative of a mining constituency and to put to the House the astonishing experience we have had in my constituency in recent months beginning just before the overtime ban. One of the collieries nearest to my constituency is the Ogilvie Colliery, which happens to be in the constituency of my hon. Friend the Member for Caerphilly ("Mr. Fred Evans). Many of my constituents, who live in the village of Abertysswg, work in the Ogilvie Colliery.

For some months past, almost coinciding with the outbreak of the overtime ban dispute, the members of that colliery at NUM lodge meetings have fought to keep their pit open. They have fought with all their strength to put their case to the National Coal Board. They have even subscribed from their not over-generous pay to hire a public relations firm to put their case as strongly as they could, not merely in Wales but in the country as a whole. They held a Press conference to emphasise the need for keeping the mine open. Unfortunately, that conference coincided with the opening of the overtime ban dispute and as a result their campaign was somewhat submerged.

I put this illustration to the House because it shows up the whole national situation. That pit, which the National Coal Board proposes to close, contains millions of pounds worth of coal reserves. I would not like to guess at the value of those reserves now compared with what it was before the Ogilvie Colliery miners began their campaign. I suppose the value has trebled, if not quadrupled. Those miners have been fighting with all their strength to keep the pit open, partly in their own interests and partly, as they believe—and as I think most people would now believe—in the national interest.

Why did the National Coal Board wish to close that pit? There have been losses at the pit over a number of years, but those losses might have looked very different on the balance sheet today when 1211 the possible price of coal is taken into account. It would appear that the National Coal Board wishes to close that pit, despite the huge wealth of coal that still remains in it, because of the necessity by the board to recruit people into neighbouring pits. It is a dramatic illustration of the fact that there is scarcely a pit in South Wales—the same applies to mines in the rest of the country—which is not short of miners and which could not use more miners. One way to put the problem starkly is to underline the fact that 15,000 miners leave the pits every year.

§ Mrs. Elaine Kellett-Bowman (Lancaster)

Would that situation have prevailed if the Labour Government had not subscribed to the policy of allowing miners in the industry to run down by 35,000 a year?

§ Mr. Foot

I assure the hon. Lady that I shall not try to escape her question, because the feeling of urgency in the mining areas over this matter dates from an earlier period than the incoming of the Conservative Government. I can tell the hon. Lady that when I sat on the Government side of the House, as I did during the period of Labour Government, I put exactly that sort of point. I referred to the years 1966 and 1967. I am not saying that I can claim any particular merit from that, but I am merely saying that I put the NUM's case to the then Labour Government. I put the same case today.

I am now asking the House and the country on this occasion to listen to the NUM and its case a good deal more carefully than its case has been listened to in the past. This is a serious matter and I hope that we shall approach these questions, realising that what the miners are doing today by their overtime ban, despite the difficulties which it causes, is to try to draw attention to what perhaps is our last opportunity to save our coal industry.

I have been seeking to underline how dramatic are the facts and how slender the thread on which the mining industry hangs. It depends on two factors. First, we must get more miners into the pits and, secondly, we must realise that those miners must come overwhelmingly—I might almost say 100 per cent.—from villages such as Abertysswg which I have already mentioned. They will not come from anywhere else.

1212 Therefore, when hon. Members who represent mining constituencies come to this House and report the feelings of people in the areas surrounding these mining villages, this House and the Government should take note of what we say—not just because we say it, but because we bring to this House the views of the people who live in the only communities which can maintain the coal industry in the coming economic decade.

The Secretary of State for Trade and Industry has made speeches on this subject telling of the massive improvement in wages granted by the Conservative Government to miners. He talks almost as though the Wilberforce award had been thought up by Conservative Ministers and that it was one the greatest Conservative triumphs. Those of us who recall the history of that matter know that the situation was somewhat different. The present Prime Minister fiercely attacked the miners on that occasion—almost as fiercely as he now attacks their present overtime ban campaign.

The Secretary of State for Trade and Industry also tries to tell us that in 1972 the Conservative Government introduced the most generous and far-reaching piece of legislation, namely the Coal Industry Bill. It was a good Bill in many respects. It was a much better one than this Government introduced in 1970. So what was the reason for the change between 1970, the Government's first opportunity to introduce a Coal Industry Bill, and 1972? The change was that the Government had learned. There had been a national strike. The national strike of the miners in 1972 performed, I believe, a great service not only to the miners but to the people in Britain today who want coal.

In the same sense I say that the present overtime ban, despite all the difficulties and troubles that it causes, can be the way of teaching this House and the country that the miners have to be treated differently.

When I go up and down my constituency talking to people whose fathers and brothers are miners and whose grandfathers were miners before them, of course they are favourable to the miners. Even though many of them are, as they see it, unnecessarily on a three-day or, they hope now, a four-day week, they say, "The miners have never had 1213 enough. Good luck to them." That is the feeling in industrial Britain. It is not only good for the miners that that should be said. It is wisdom for the country as a whole.

The first duty of any Government in this crisis is to reach an honourable settlement with the miners. It can be done. It is there, available for the country. It need not be done by a capitulation on the part of the Prime Minister, such has been the statesmanship of Mr. Len Murray. He has modelled himself on General Kutusoff, the famous Russian general who always left a golden bridge along which his opponent might escape. Mr. Len Murray has left a golden bridge for the Government to say to the miners, "Yes, we will grant you your increase."

It is a special case. Therefore it can be done without capitulation. Of course it will be a retreat, but it need not acquire Napoleonic proportions unless the dispute goes on even longer than it has already. At any rate, it might teach the Prime Minister not to get his army beleaguered in such remote and wintry places as Moscow again.

The whole nation believes that the first article of wisdom to be learned from these events is that the Prime Minister and the Tory Party should escape from the attempt that they have made to divided the rest of our working people from the miners. It will not succeed. It has been defeated utterly.

I use some of these metaphors about capitulation and retreat because I understand that the Prime Minister is sensitive about the language used in some of our newspapers. He does not like words such as "hawks" and "doves". I suppose that is the reason why the Government have sent along the two right hon. Gentlemen who are to speak from the Treasury Bench in this debate. From the newspapers we do not know whether they are hawks or doves—

§ Mr. Neil Kinnock (Bedwellty)

Try "ostriches".

§ Mr. Foot

I am grateful for that assistance. I cannot detect so clearly from where I am standing. They might be described as a couple of ornithological hermaphrodites—neither one thing nor 1214 the other—though we thought that that rôle was reserved for the Prime Minister. However let them tell us what it is that they are proposing to do to deal with the situation.

As I promised, I come now to the Governor of the Bank of England. One of the objections which the Opposition hold to the way in which the Government have pursued this policy is that, as is clear from the way in which the Prime Minister spoke to the nation at the beginning of the dispute on 22nd November last year, they have caused deepest offence in the mining communities by seeking on television to blame the miners not only for the inconveniences and difficulties resulting from the overtime ban but also for most of the other economic ills of the nation.

The Governor of the Bank of England spoke in a manner which disposed of these matters, and I have summarised what he said, though it is in a slightly different context. I wanted to make sure that all these matters were wound up in one simple proposition. We must remember that the Governor of the Bank of England was speaking about the period before the miners' overtime ban began.

I have put it this way. My summary is headed, "The Problems of Success, by Gordon Richardson, Governor of the Bank of England". That is not how he entitled his speech, but we always like to be sure that the Prime Minister puts his words in this financial context.

One of the problems of success is, "How to accumulate a £2,500 million deficit running rate on the balance of payments without anyone noticing".

Other problems of success are, "How to conceal the fact that the disaster developed before the oil crisis and before the miners' overtime ban. How to prevent anyone realising that the £1,000 million deficit with the Common Market countries has contributed to the fiasco. How to prove that a record £330 million trade deficit in December, with exports falling and imports rising in that figure, is just another Barber-Walker triumph. How to persuade the country that the Budget of 'unparalleled severity' which the Chancellor of the Exchequer is to introduce in March has nothing to do with the previous policies of Her Majesty's Government."

1215 Those are not the exact words of the Governor of the Bank of England. But that is how he would have stated the position if he had been seeking to help the Government out of their difficulties, because that is the way the Government sought to present these economic problems to the nation before the Governor of the Bank of England intervened.

Let me deal with the last proposition—it may be the most relevant and urgent one—of the "unparalleled severity" of the Budget which the Chancellor of the Exchequer will introduce. Those are not my words. They are words which were used in a broadcast on Friday by a most eminent member of the Conservative Party. He was forecasting what would occur. His words were taken up by The Times, which seems to know about these matters.

There are very few people who suggest that it will not be a Budget of "unparalleled severity". If the present Chancellor of the Exchequer is to introduce a Budget, perhaps I might give him a little advice. Indeed, my first advice is to the Prime Minister. It is to get rid of the Chancellor of the Exchequer. It is to send him back to the kitchen of the Conservative Central Office, the spiritual home from which the right hon. Gentleman never really departed, where his half-cooked theories and over-cooked figures may be examined more carefully. My advice to the Prime Minister is to send the right hon. Gentleman back there so that we may have a Chancellor of the Exchequer who presents a Budget to the nation in quite different circumstances.

Everyone knows that the next Budget has to be very different from the one which the Chancellor of the Exchequer presented as recently as last December. What is more, if the Chancellor of the Exchequer were sent to Tory Central Office it might have the added advantage of allowing the Secretary of State for Energy to get on with his job full time. After all, bearing in mind the coal stocks which the part-time Secretary of State has been able to produce, he might be able to do wonders if he were doing the job full time.

But if we are to have a Budget which deals with the problems, it will have to be a Budget which goes to the root of the divisions in our country. It will have 1216 to deal with the question of the rich and the poor, with the basic questions of what has been happening in our country for many decades. I do not say that only this Government have been responsible. It is merely that the actions of this Government in some respects underline these deep cleavages more fiercely than ever before.

Indeed, the action over the three-day week itself has only underlined these class differences. H. G. Wells used to say that the class war was an old pastime of the British ruling classes. So much is this so that they do it almost automatically. The three-day week hits wage earners much harder than salary earners and both much harder than property owners. That is the way in which our society is organised.

What right hon. Gentlemen have been doing during their period of office, in particular during phases 1, 2 and 3—this is why we have said that the policy was not merely unfair but unworkable, and Heaven knows that has been proved clearly enough—is to ensure that it will always work out in this way. Instead of the wage earner being able to improve his position, his position will be held down while that of the dividend drawer, the profiteer, would be enormously enhanced.

Any hon. Gentleman who doubts what I say has only to read the figures in The Times today given by my hon. Friend the Member for Oldham, West (Mr. Meacher)—[HON. MEMBERS: "Oh."] If hon. Gentlemen want to contradict the figures, let them do so, but let them realise that this affects the mining dispute as well. Because of this situation, what the miners are offered by the National Coal Board, even if it were accepted, taking into account the increase in prices which will happen and the extra taxation and insurance that they will have to pay, is only an inconsiderable increase. If it is argued that the offer is in some respects more than some other workers have been offered, that is merely an illustration of what my hon. Friend the Member for Oldham, West has been pointing out persistently without any effective contradiction—that phases 1, 2 and 3 envisage a decline, a cut, in the standard of life of the bulk of working people.

It is against that picture that a Budget of unparalleled ferocity will have to be 1217 introduced in March. We say that if such a Budget is to be introduced, if the country faces such severe problems as the Governor of the Bank of England and sometimes Ministers describe—although Ministers are not consistent in the matter—it must be a Budget which seeks to readjust by deep and radical measures the gross disproportions of wealth. It must deal with wealth as well as incomes and must go to the root of these problems. That is why we have argued this case and put down a motion.

Since it will have to be such a Budget as that, a Budget dealing with such questions as that, we do not expect this kind of radical step from the Conservative Party, and particularly not from the present Chancellor. One of the least surprising aspects of the gossip which has been leaked out from the Cabinet in the last week is that the Chancellor is the man most in favour of cutting and running. This is exactly what we would expect of him.

It was once said by Charles James Fox that a wise statesman is one who uses the sober moods of a people to guard against the hour of delirium. What the Chancellor would apparently like to do—there may be one or two who agree with him—is exploit the moment of delirium in order to press through measures which, in their sober moods, the people of this country would not be willing to tolerate.

That is the Chancellor's approach to our national politics. Whether he has the support of the Prime Minister, we do not know. However, the Prime Minister has already contributed gravely to the divisions of the nation by seeking to say to the miners, and possibly to the rest of the working people—they are lined up with the miners, united with them, so he is apparently saying it about them as well—that it is a crisis, a clash, between the people and Parliament.

I must say that this Prime Minister as a defender of Parliament is a more bizarre and daring impersonation than anything every attempted by Danny La Rue. No Prime Minister in modern British history has done more to debase and corrode the standards of parliamentary government than the present Prime Minister. It was under his incitement that we spent the first year of this Parliament pushing through an Act designed to remove the last effective control in industrial affairs away from 1218 this House to the law courts. So brilliantly effective was that piece of legislation, that even the Prime Minister dare not touch it on the mantelpiece, where it now stands.

Then we spent the next Session pushing through the European Communities Bill. It would be almost masochistic to mention the Common Market in these days, would it not? But it is fact that, during that second year, Parliament spent hours—how many hours I do not recall—deciding that the proper authorities to fix parities, food prices, regulations about juggernauts and all such other matters were the people in Brussels. We decided that all such power was to be given to those men in Brussels or to the executive bodies of the Government in this country. In any case, it was to be taken away from this House.

In the third Session, under the incitement of the same Prime Minister, we spent much of our time establishing the Pay Board and the Price Commission. Nobody knows what powers they have or whether they are exercising them properly. No one knows—at least, apparently the Prime Minister does not know himself—when the Government can intervene in a matter of exceptional crisis. Heavens above, if that section in the Act is not to be used when the country is suffering the deadly and debilitating effects of the industrial crisis at the moment, when in Heaven's name is it to be used? So skilfully was that Bill passed through the House, taking away the final voice in these matters from the House of Commons, that even the Prime Minister does not know when he can invoke that power.

Whenever this House decides to surrender its powers, whenever it becomes weary of our methods, when people think we do our business so badly—I do not say that it is perfectly done—danger follows. It is the claim of those who defend parliamentary government and democracy that, in the end, this is the place where the collective wisdom of the British people should be expressed, particularly by Governments and Oppositions who have faith in the institution. The Prime Minister has never shown any such faith. All his politics have been directed to deriding and undermining the House of Commons.

The only way in which the authority of the House can be renewed is by a new General Election. Therefore, despite all 1219 the arguments which may persist among Conservative Members, the sooner electoral decencies permitting we can have that election the better. The sooner we can get a new Government the better. Right hon. Gentlemen opposite have forfeited the right to speak for the nation. The sooner they get out of the way for those who will speak for the nation, the better for all concerned.

§ The Secretary of State for Social Services (Sir Keith Joseph)

The whole House listened with envy and admiration to the hon. Member for Ebbw Vale (Mr. Michael Foot), who spoke for 35 minutes without a single note. I have, perhaps, deluded myself in preparing a speech on the basis of the motion, which the hon. Gentleman did not even discuss. I have now set aside my prepared speech and I shall try—though I cannot hope to rival the hon. Gentleman—to answer what he said from a single page of notes on which I have recorded the subjects which he raised.

No hon. Member will be surprised that I am not qualified to enter today into the merits of the miners' dispute. This is not a debate primarily about that dispute, although it is referred to in the motion, and indeed there is a meeting going on at this moment between the TUC and my right hon. Friend the Prime Minister and other Ministers. But in the light of the hon. Gentleman's remarks there are some general points that I can make related to the subject.

The hon. Member for Ebbw Vale made great play about the future need—indeed the present need—for more miners. He invoked precisely the laws of supply and demand which the Labour Party has constantly reviled and which it has tried to escape by the whole process of nationalisation and by that constant invocation, not of the laws of supply and demand and the mechanism of the free market—which we on the Government side far prefer—but of the difficult distribution of resources according to some inevitably subjective assessment of what is called "fair shares."

The Labour Party has constantly said that the division of income should be according to some doctrine of fair shares. But here the hon. Member says, "Not 1220 for the miners ; for the miners supply and demand ; they should get more, because they need more." What about the nurses? What about other equally deserving groups?

For two years the present Government tried to operate a policy that would achieve growth and increased prosperity for the country in a free market with free bargaining. They were forced off that policy by the refusal of some elements in some trade unions to work with the essential elements of compromise, give and take and reason that alone could reconcile growth, prosperity and full employment in this competitive world. It was with great reluctance that we were forced on to the second best course that we now follow, namely a prices and incomes policy. I must remind the House that the reason for the deficit for which the hon. Gentleman so criticised us was precisely the purpose which the whole House shares—growth and higher prosperity, value for money and the ending of inflation for all our people.

§ Mrs. Barbara Castle (Blackburn)

Have not the Government commissioned from the Pay Board a report on relativities as part of their own phase 3 policy designed to provide a way of giving special treatment to special cases? As the report has been in the Government's hands since Saturday, will the Government place a copy of it in the Library so that the House may decide whether it provides a basis for the settlement of the miners' claim?

§ Sir K, Joseph

I am sure that the right hon. Lady meant well by that, but we have said that the report is being published as soon as it can be printed. I think that it will be out this week.

The hon. Gentleman did not explain to the House—it was not his brief to do so—that the second half of our period in office has been dominated economically by a dramatic fall in our terms of trade and that a soaring range of raw material and food prices overseas has involved almost every industrial country in high domestic inflation. It has been a considerable achievement of this Government by every method to our hands—competition, tax policy, nationalised industry pricing policy and the Price Commission—that, despite the increase in world prices of just on 40 per cent. in the last 1221 year, domestic inflation has been kept—alas, to a high figure, but kept—to 10 per cent.

But what I should deal with most is the hon. Member's prescription for success. What he said to the House and what the motion says is that the way to achieve what he wants for the country is to embark on a further pursuit of egalitarianism. He said that he thinks that the Government should bring in a far more drastic redistribution of wealth and incomes than, he implies, the Labour Government ever set their hand to. He suggests that is the way to reconcile the people of this country and to produce the prosperity that he wants.

§ Mr. Eric S. Heffer (Liverpool, Walton)

Would not the right hon. Gentleman take into account what the Director-General of the CBI said only today—that there has to be a great redistribution of wealth?

§ Sir K. Joseph

I do not have to agree with the Director-General of the CBI just because I do not agree with the hon. Member for Ebbw Vale.

Compared with many of our neighbouring countries, this country still has class differences. They have been blurred over the generations, but they are still far deeper, far more pervasive than all hon. Members would wish, but we need not exaggerate them—and they are blurring.

The differences between the rich and the poor—and they are not the same as class differences—are, on a historical basis, dwindling very fast. The distribution of wealth is still fairly wide and I would claim that in a free society, provided the difference is not too great, there are social, moral and political virtues in independent wealth. I am not and do not pretend to be an egalitarian, but equality is anyway impossible ; equality at breakfast would be inequality at supper. Inequality has its advantages provided it is not excessive.

But in terms of the distribution of wealth we have, over the past decade, had a sharp decline in the difference between the rich and the poor. I refer the House to the article by Professor Alan Day in the Observer yesterday. Even in the past eight years there has been a further drastic diminution of the gap between the ownership of wealth of 1222 the wealthiest 10 per cent. and the rest of the population.

§ Mr. Neil Kinnock (Bedwellty)

If the right hon. Gentleman reads the whole of what Alan Day said, he will discover that he said categorically that the main reason for the narrowing in disparities of income was the fantastic inflation of property prices, something for which the Government have great responsibility.

§ Sir K. Joseph

If the hon. Gentleman will read it accurately, what Alan Day says is that there has been a very large increase in the value of house prices. He does not refer particularly to property ; he refers to owner-occupation and house prices.

No observer would deny that the inequalities of wealth have been dwindling historically fast. The inequalities of income are far too exaggerated by most observers. The inequalities of income have already been sharply reduced by the very high level of progressive taxation in this country. After all, in this country we have taxation which at the maximum level is 75 per cent. of earnings and no less than 90 per cent. of investment income. That leaves very little, even for the wealthiest recipients, of investment income—10 per cent. is what is left. [Laughter.] Hon. Members are wrong to mock, for reasons that I shall come on to explain.

If we were to remove all the remaining income from those who receive more than £5,000 net a year, the total yield would be £400 million a year. That would be enough for an extra bonus of 30p a week for a every wage earner and self-employed person in the land. That is all the scope left for re-distribution of income. I now come to the hon. Gentleman's principal argument. [HON. MEMBERS: "Nobody has believed you yet."] Hon. Members say nobody has believed me so far ; would they believe their right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins), who said precisely the same last year?

The hon. Member for Ebbw Vale has to answer two propositions: first, do differentials matter? In the view of this side of the House, differentials matter very much. Indeed, the whole purpose of the miners and ASLEF shows how much differentials matter to them.

1223 Secondly, would the hon. Gentleman consider this proposition, which I put to him with diffidence because I do not know whether he has addressed his mind to it? Many of our neighbouring countries—I am thinking particularly of the Scandinavian countries, of Germany and of Holland, have a standard of living higher than that of the people in this country ; they have less poverty ; they have more prosperity ; they have full employment. Yet they have much greater inequalities of earned income. The pay of managers in Germany, in Holland, in Scandinavia—[HON. MEMBERS: "They are better managers."]—Perhaps they are better managers, but their pay is much higher than that of managers here.

Hon. Members opposite will say that undoubtedly those countries must tax their managers highly. Perhaps they do, but they tax them much less highly than our managers here are taxed. Income for income, the tax at maximum levels of taxation in industrial competitor countries is far lower than it is here. The inequalities of income in those countries are far greater than here, and yet their prosperity is far higher and their poverty far less.

How can it be that the hon. Member's rhetoric would undoubtedly produce the answers that he wishes when we see our neighbours, although with greater inequality, having more prosperity? I am not arguing that we need greater inequality and I shall come to what I am arguing when I have given way to the hon. Lady.

§ Mrs. Shirley Williams (Hitchin)

Would not the Secretary of State, of all people, consider that the proper comparison is taking taxation and national insurance together, in which case the contribution in virtually every country that he mentioned is either equal to or higher than our own?

§ Sir K. Joseph

I think that the hon. Lady—and perhaps it is rare for her—is totally wrong. I think that the hon. Lady is wrong at the highest levels of income, but I shall certainly look again at my argument and let her know.

§ Mr. Tom King (Bridgwater)

Is not my right hon. Friend aware that many multinational companies, wishing to move ;Some of their best managers back to this 1224 country, even in the present situation find it almost impossible to do so and to reward them adequately when compared with their European standard of living, and that if the Opposition's policies were successful it would certainly be totally impossible?

§ Sir K. Joseph

I confirm what my hon. Friend says.

The reason why the hon. Member for Ebbw Vale is so wrong is that he and the Opposition tend to focus on the distribution of wealth as if distribution were the only thing that mattered. Distribution matters very much and social policy matters very much, but there is a third factor that matters, and that is the total level of national income, and it is upon the total level of national income that the hon. Member has not fixed his attention. I would even go so far as to ask him to accept that profits have a value—they are the motive for the best use of resources. I would say that profits earned under the law in a competitive economy are the best friend of the poor in our land.

I ask the hon. Member to look at countries overseas that have fewer poor than we have, that have far more socially effective policies for their dependants than we have, far larger pensions than we have, They have learned their lesson, and, by competition under the law and by allowing incentives to work, and by one other factor which is most important and to which I am coming, have achieved nearer to what the hon. Gentleman would call, I hope, social justice than we have yet achieved.

I come to the missing factor in his speech. What is it that distinguishes those countries' economies from ours? They have no higher talent than we have. What they have—and some have won it only after decades of struggle—is a greater spirit of co-operation between management and labour. I am not saying that there are not in this country many fine examples of co-operation between management and labour, earned and secured over years of endeavour ; there are such. Even now, in an emergency, I think that there is great co-operation in a vast number of places between management and labour. But the fact is that in most of our enterprises, public as well as private, for most of the time there 1225 is far too little co-operation in the common interest.

But that fault cannot necessarily be put on one side. It is management that has to initiate and it is workers who have to respond. Nevertheless, what I have been describing in those other countries has secured for their people larger pensions, a higher standard of living, higher earned net income and less poverty than in this country. The hon. Member's ineffective recommendation of more and more redistribution of a stagnant national cake is no way forward.

What I must ask the House to consider is whether either the motion or the hon. Member's speech has represented the true position. Is it true, as the motion suggests and as the hon. Gentleman tried to argue, that we still live in the days described by Disraeli in "Sybil," in a state of two nations? Is it true that we still have a simple picture—[Interruption.]—I am trying to answer the hon. Gentleman's speech and I think that the House would wish to allow me to argue this out. Is it true that we have a simple picture as Disraeli no doubt accurately described, of a small group of privileged people on one side and on the other the vast majority of the people?

I do not believe that it is at all like that today. I believe that the fact is that the main struggle today is between different sections of wage earners and their own brethren. I believe that when some wage earners create industrial trouble, the people who suffer are other wage earners and pensioners and the sick and the unemployed. I believe that they are striking their own brethren far more than anyone else. When there is industrial strife it is the very seed corn of growth and prosperity, the very basis of higher pensions and less poverty, the confidence to improve investment, that is eroded and destroyed. That is why our neighbours, who do not have this constant struggle at the work place, have soared over our standard of living.

I believe that we have a far harder task ahead of us than the hon. Gentleman suggests. If it were simply possible by yet another redistributive Budget to redistribute and by that means alone to unlock the talents and energies of the people, do you not think, Mr. Deputy Speaker, that either a Labour Government, who did not take that path, or the 1226 Tory Government would have done it? No ; it is a far harder task that this country faces—to mobilise co-operation which in other countries is turning working people into middle-income people before our eyes.

I point out that the Government have not deepened divisions but by a series of initiatives in the social field—which I could have catalogued—have reduced divisions. We have brought closer to normality the lives of the elderly by reviews in pensions, by making up-rating an annual matter, by improving benefits year by year and by bringing in entitlement to pensions for the over-eighties.

We have done more for the poor and hard pressed than the Labour Government ever did. Do not my hon. Friends remember, when the last Labour Government came to power, that categoric pledge—it was more than a promise, we were told—that a minimum income guarantee would be introduce to help the poor and hard pressed? But we now remember that that pledge was totally dropped. Did the last Labour Government help the poor and hard pressed? Not one jot. The last Labour Government lowered the tax threshold, whereas we have raised it. The last Labour Government piled extra contributions for national insurance on the lowest paid whereas we have kept the national insurance flat-rate contribution for the low paid precisely as it was when we took office, although we have increased benefits by 55 per cent.

The last Labour Government made no preference for the low paid in their incomes policy whereas we have made a precise preference for the low paid in our incomes policy.

We have brought the chronic sick and disabled closer to normality. We have not done nearly enough but we shall pay out this year almost £100 million in extra benefits for the chronic sick and disabled. In this respect Labour never paid a penny.

We have devised a tax credit system, which Labour wished they had the wit to devise. It will help automatically, without a means test, the poor, the hard pressed and the elderly and those at work.

We have done more for the neglected groups—the deaf, the alcoholics and the arthritics—than has been done by any 1227 previous Government, let alone by any Labour Government. We have reduced the divisions, not increased them.

Until both sides can agree on the way forward and we have learned the lessons of neighbouring countries which have, alas, done so much better for their dependants than we have done for ours, we shall not get the right answer. The hon. Gentleman puts his great eloquence into misrepresenting the cause when he pretends that redistributing the last 25 per cent. of earned income and the last 10 per cent. of investment income will answer the problems of this country. I hope that my right hon. and hon. Friends will reject the motion.

§ Mr. Michael Stewart (Fulham)

I at once pay tribute to the Secretary of State. We now know quite well why he was chosen to reply—a question raised by my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot). The Secretary of State is one of the few members—or probably the only member—of the Government with the wit and the courage to make a spirited intellectual defence of the injustices and inequalities of our present society.

But he was wrong on two major matters of fact. He said that we did not help the old people and the pensioners. One of the first actions of the Labour Government, in 1964, was to make a bigger increase in the real value of old-age pension-related benefits than had occurred since Clem Attlee's Government in the 1940s. The Secretary of State also said—

§ Sir K. Joseph

Surely I was justified, because over the next four years there was no increase in real terms whatever in the value of the pension.

§ Mr. Stewart

The right hon. Gentleman is not even right about that. I know that we ran through many difficulties, and I shall have something to say about the difficulties of this Government and about how they have handled them. But the right hon. Gentleman was wrong in saying that our incomes policy made no provision for the lower paid. During the grim period of what was called severe restraint almost the only exception to the general rule against wage increases was in favour of 2 million lower-paid 1228 workers. The Secretary of State not only made an error of fact but he did something beneath his dignity intellectually by saying that if there were equality at breakfast time, it would be inequality by supper time. That is not a reason to fail to pursue justice and equality all the time. If a man cleans his teeth at breakfast time—even in the dark—they will be soiled again by supper time. It is not a reason for not seeking continuously for cleanliness and hygiene.

Let me spell out the position, although I know that the right hon. Gentleman has the wit to know it for himself. None of us on this side pretends that there can be absolute equality of incomes. We say that the inequalities in our present society are too large and, more seriously, are too little related to any function or service rendered to the community and that this is not merely an injustice but a damage to the efficiency and whole working of our society. That is what the argument is about.

There has been a convention in British politics that if things go seriously wrong under a Labour Government it is wholly and exclusively that Government's fault but that if things go wrong under a Tory Government it is somebody else's fault: it is possibly the fault of some ugly foreigners, or if that cannot be made to stick, it is the fault of working men and trade unions. For quite a time this convention, dutifully supported by certain sections of the media and public opinion, has served the Tory Party quite well, but its credibility is wearing thinner and thinner as we look at the plain facts.

What are they? The Government won the election basically because they claimed to be able to deal with rising prices and industrial disputes. What has now happened? Prices have risen and the rate of inflation has been faster than that ever known before in our peacetime history. The pound is in greater danger than it has ever been in our peacetime history. As to the Government dealing with industrial disputes, look at the number of days lost in industrial disputes, for three years after the Government came into power and three years before. The number of days lost through industrial disputes has increased two or three times, and that is saying nothing of the time lost through refusals or unwillingness to work overtime.

1229 Under the Labour Government it is all the Government's fault. Under this Government it is the fault of the wicked trade unionists. No doubt the sycophants who support the Government will go on reciting that story, but it carries less and less conviction. The Government claim to know how to deal with industrial disputes. They passed an Act for that purpose, an Act which we know in our present difficulties they dare not use.

Why have the Government landed in this difficulty? Surely it is for this reason. Any success for the Government's policies depended upon the assumption that people who were in a strong economic bargaining position would exercise what one may call restraint or public spirit. Those who are in a strong bargaining position make up a very mixed bag. In one context they are landowners, particularly owners of land which will be needed for public purposes. In another context they are coal miners. The Government's whole policy and hope of success depended on the assumption that these groups would exercise restraint, public spirit, or—to use the right hon. Gentleman's phrase—compromise and give and take.

I wonder whether hon. Members have realised this: assuming that today, with the Government's consent, the National Coal Board were to double the offer which it is at present making to the miners and the miners were to accept that, the miners would still be exercising a very great measure of public spirit and restraint compared with what they could get by their sole bargaining power in a free market. This is one of those facts that we have lived with for so long that people have tended to forget it and have assumed that somehow the miner must always show more restraint and public spirit than is ever expected of the landowner.

This casual assumption is the more dangerous because what is in question is not merely how we settle the present mining dispute but how we are to get enough people to be willing to work in the mines in the future. Human beings will exercise restraint, public spirit, compromise, give and take, only if they are inclined to think that the general trend of society is moving towards social justice.

1230 That is why arguments about exactly how many packets of cigarettes a poor man would be able to afford if all incomes over £10,000 a year were shaved off have no bearing. It is not a question of amounts. It is a question of the outrage at seeing a society in which not only are the incomes desperately unequal but in which the inequality has no relation to any principle of justice, function or service to the community.

This is what of all people the President of the Confederation of British Industry has been pointing out to us. Capitalism must have come to a pretty pass if the President of the CBI, in a desperate attempt to get a united effort from the nation, has to agree that we ought to have a more fair and a more equitable society. Quite a number of us have been saying that for some time. At last the message is coming home.

Alas, when the Government were in a position where the one thing that they needed for the success of their policies was to make people believe that society was moving towards greater justice, on all their major issues of policy they have moved in the other direction. I accept that the Secrtary of State for Social Services in his own Department has laboured very well to help particular groups of people who were very hard hit ; but, alas, these have been only tiny fields in the general structure of society.

What has happened in fact? In the Budget some time ago there were the arrangements about taxation which worked so extremely well for those who are very well off indeed. Then we had that other budget which was supposed to deal with the great emergency but which did not face the need to create greater equality.

Here again, it is not just a question of just shaving off at the moment from the top and giving to the bottom. It is the whole trend of Government policy. We are told on all hands—I believe it to be generally true—that this country now faces a very serious economic situation indeed. It would do so even if it were not for the mining dispute and the trouble over oil, though those factors add to it considerably. In those circumstances I believe that any Chancellor ought to say at least privately to himself, and possibly 1231 publicly, that those who at present have, say, twice the average income ought not to expect their standard of life to rise, either through higher incomes or profits or by tax reliefs, until we have very substantially struck at the desperate poverty that still hits very large numbers of our people.

The important thing is to have a general trend of policy like that. We as Socialists have often been lectured by defenders of the present order of society in terms like these. We have been asked, "Why do you talk so much of levelling down? Is it not much better to level up?"

For my part, I happily accept that doctrine. I do not think that those who preached it realised what a revolutionary doctrine it is. What we must now say is that there are a certain number of people in this country—I will not argue about the exact figure—who have a standard of living which is at least twice the average and to whom we can fairly say, "You must now wait until we have done a great deal for those who are less fortunate than yourselves."

That is exactly what the Government have not done. The pursuit of inequality by this Government does not stop with their budgetary policy. It is true also in their housing policy. I have urged also that one of the most serious defects of the Governments' housing policy is their deliberate cutting down on the building of council houses. When we on this side say this we are told, "You are being doctrinaire. You want everyone to live in a nice council flat." That is not the point. Any reduction in the rate of council house building makes it easier for those who are already moderately well housed to get themselves a little better housed, but it also steadily reduces the hopes of those who are much worse housed of ever getting themselves better homes.

This is a continual policy of the Government not only in taxation and housing but in education, too.

§ Sir K. Joseph

Where there is an international skill like medicine and where there are eager seekers for our doctors abroad, would the right hon. Gentleman still say that, after years and years of training, a doctor is not to get any improvement in his standard of living for years? Incomes policy, alas, compresses 1232 differentials sufficiently already. Is that what the right hon. Gentleman is saying?

§ Mr. Stewart

I should have thought that my figure still left enough room for differentials. I may be a little old fashioned, but I still believe that there is a great number of skilled people such as doctors and engineers who love this country and who would be willing to help if they had in power a Government who really showed that they wanted to work to make this a just, humane and worthwhile country.

I was saying that it is not only in taxation and housing but in education, too. In the financial measures prepared by the Chancellor before Christmas we were told, "One great virtue is that you do not have much heavier taxation. We are going to meet it instead by cutting public expenditure." In particular, the Government made the most savage cuts on public education. This means that those who are already well enough off to have the children educated at what are called public schools will remain untouched. The rest of the nation will have to put up with a less good quality of education.

What is more, there has been and remains the continuing steady opposition of this Government to comprehensive secondary education, which means encouraging our citizens, from when they are about 10£ years old, to be more interested in the different gifts and abilities which divide us rather than in the common humanity which ought to unite us.

Above all, there is the steady encouragement of profiteering under the present Government. We had a few pathetic measures about land profiteering recently announced, but everyone knows that they do not seriously touch the problems. Here again, it is not a matter of exact amounts. We shall be told that if the total sum which someone won by profiteering in land were divided among all the mining communities it would amount to so many pence each. That is not the point. What matters is the gross example and the gross insult to everyone who works hard for his living of seeing a society in which people are munificently rewarded not merely for doing nothing but for doing things actually against the public interest.

This is not a new situation. It was set out to the nation in one of the finest 1233 pieces of work in the English language, in Professor R. H. Tawney's "The Acquisitive Society", written 50 years ago, and again in the context of a mining dispute. Professor Tawney points out what happens when we create a society in which it is generally believed that if one is in a strong bargaining position to grab, one is entitled to grab. He says: Men will fight to be paid £30 a week instead of £20 as readily as they will fight to be paid £5 instead of £4, as long as there is no reason why they should be paid £20 instead of £30, and so long as other men who do not work are paid anything at all. Neither Professor Tawney then nor I now is thinking of those who, through age, infancy or disability cannot work. We are talking about those who could work, who could contribute to society, but who not only do not but who injure society and do very well out of it. Professor Tawney continues: If the community pays anything at all to those who do not work, it can afford to pay more to those who do. The naive complaint that workmen are never satisfied is strictly true. It is true not only of workmen but of all classes in a society which conducts its affairs on the principle that wealth, instead of being proportional to service, belongs to those who can get it. As long as men make that principle the guide of their individual lives and their social order, nothing short of infinity can bring them satisfaction. That message was spelled out to us 50 years ago. We have imagined that our greater productive skill and our affluence had nullified that vital moral and social message which Tawney taught us. We realise now that they have not. We shall not get things right unless we profoundly reconstitute out society with a view not only to greater equality—I admit that there can be argument about how much differential one ought to allow—but also with a view to establishing greater justice.

It is this latter principle of greater justice which, if I may say so, the Liberal Party has not fully grasped. If we want to create a society on the principle of greater justice, we must recognise that this involves a far greater measure of public ownership, especially of land, than Liberals have yet been prepared to swallow. Above all, however, the necessary reconstruction of society is something of which neither this Government nor the Conservative Party is capable.

§ Sir Anthony Meyer (Flint, West)

I am one of the many hon. Members on both sides of the House who still remember the right hon. Member for Fulham (Mr. Michael Stewart) as a great British Foreign Secretary, and I had hoped that his contribution to today's debate would be somewhat less partisan and rather more forward-looking than it turned out to be. None the less, in my brief speech I shall be echoing many of his observations about the need for greater social equality, though with the difference that I believe that he and many of his hon. Friends greatly overestimate the contribution to the resolution of our difficulties which can be made by the introduction of even so complete a social equality as some of them would like to see.

I fully accept the need for national reconciliation. I should like to think that this was what was in the Opposition's mind when they asked for today's debate, but it was difficult to maintain that hope after the speech of the hon. Member for Ebbw Vale (Mr. Michael Foot).

For my part, I should like to see the Government hold out the hand of friendship not only to the trade unions but also to the Labour Party. If it could be done by a wave of the wand, I should be happy to see a national coalition tomorrow ; but I know very well that I shall not. Whatever party or parties are in power, however, they must at the very least maintain an effective counter-inflation policy, and that must include an effective incomes policy. It is sheer dishonesty to pretend that an effective counter-inflation policy can be secured by price control alone.

I believe also that whatever Government are in power must maintain an active British presence in Europe, because that is our best chance for the future. And it goes without saying that no British Government worthy of the name can play politics with the country's defences.

On all those counts, the declared official policy—I underline "official"—of the Labour Party offers no possible basis for that closer co-operation between the parties which to my mind is so desirable. I believe, on the other hand, 1235 that the present Government's policies offer a basis for that kind of co-operation.

I accept that there has to be something more than a mere gesture of good will towards the Labour Party. I suppose that a declaration of readiness not merely to amend the Industrial Relations Act but to begin again from scratch would be a start. I strongly support the Housing Finance Act and I still regard it as a progressive social measure, but if the Labour Party maintains its absolute refusal to swallow it I suppose that we should consider putting it on the table as a bargaining card. To my mind, however, what would do far more to create a sense of social justice would be to tackle, as the right hon. Member for Fulham suggested, some of the grosser inequalities of wealth in this country.

By and large—this is where I disagree with the hon. Member for Ebbw Vale—income in Britain is equitably shared: Capital certainly is not. I should like to see a radical scheme for producing a division of capital as equitable as the present division of income.

There will be no coalition based on that or any other programme, of course, but it is not unrealistic to hope for, and to work for, growing co-operation between the moderates in all parties. Recent speeches by the right hon. Members for Birmingham, Stechford (Mr. Roy Jenkins) and for East Ham, North (Mr. Prentice), a particularly helpful speech last week by the Leader of the Liberal Party, sensible advice tendered to the miners by the hon. Member for Wrexham (Mr. Ellis), a most constructive and interesting article in yesterday's Observer by the hon. Member for Berwick and East Lothian (Mr. Mackintosh) all show that there is an increasing number of hon. Members in both opposition parties who are ready and willing to support policies of conciliation. I hope that there will be a ready response from hon. Members, and still more from right hon. Members, on this side.

Because this growing co-operation between moderates might be set back by a General Election, I have on the whole been reluctant to see one now. If there has to be an election, its only justification is to show that no minority—even a minority as resolute and as sincerely convinced of the justice of its claim as 1236 the coal miners—can be allowed to dictate policy to the elected Government.

If it were only the miners who were challenging the Government, perhaps an election would not be inevitable. What worries me is the growing tendency not merely for determined miners to seek to impose their will on the majority but, more worrying still, for the majority weakly to acquiesce in that state of affairs in order to save itself trouble in the short run.

So far, those determined minorities have all been on the Left, but it may not always be so. This process must be arrested if democracy is to survive. If an election to crystalise a majority one way or the other is the only way to stop that process, sadly we must have an election. If, however, the moderates in the Labour Party and, more important at this juncture, the moderates in the trade unions continue to pluck up their courage as they have done in recent days, it will be neither necessary nor justifiable to hold an election. Even the most convinced advocates of an election will now admit that it would not of itself solve any of the nation's problems.

§ Mr. Alexander W. Lyon (York)

The hon. Member is making a case for the moderates. In a situation like this, he assumes that if we had an election the best thing would be for the Conservatives to be returned. If they were returned, how does he think the so-called militants within the trade union movement would react? Does he think they would feel that the parliamentary process was likely to give them the kind of opportunities they desire, or does he think they would then believe that only even greater militancy was required? That was the effect upon the Communist Party of losing two Members in 1950. In the event that was perhaps a disaster, because it meant that Communism was then retained only within the industrial wing. Would it not be better if we were to have no election or, better still, a Labour majority in order that there might be an opportunity for the so-called militants to see that the partliamentary process gave them what they wanted?

§ Sir A. Meyer

I have said already that I hope it will be possible to avoid an election. The hon. Member leaves out of account that everyone is obsessed by the 1237 determination of the miners not to accept the offer made to them and their tendency to overlook the very large number of trade unionists who have already accepted settlements under phase 3 or are preparing to do so. If the miners can compel the Government to give in to them, it will be extremely difficult for moderate trade union leaders to retain the leadership of their followers. The only justification for an election would be to prove that the country wished an elected Government to stick to their policy. I would be one of those who after such an election would urge that the victorious Conservative Government should adopt as conciliatory an attitude as possible to the unions.

However, I return to my arguments. [HON. MEMBERS: "Answer the question."] The basic difficulty we face is that the people have come to expect a faster increase in their standards of living, in the standards of the social services and in the quality of the environment than can possibly be achieved during the next two years and perhaps even during the next 10 years. If they do not get these improvements—I ask hon. Members on both sides seriously to ponder this—they will blame whoever is in charge. Some of the blame for this unfulfilment of expectations rests at the door of the Government because of their public and over-optimistic commitment to a growth policy. But at least they can claim that this attempt to break out of Britain's poor growth performance could have succeeded if only the price of raw materials had shown a reduction at the end of last year as there was every reason to expect.

What cannot possibly be excused, as Labour Members know in their heart of hearts, are the hopes which even now are being held out by some Labour leaders, most notably the Leader of the Opposition, that if only the Government would abandon confrontation and give the miners all they want at a stroke, we could all enjoy a higher standard of living without actually having to work for it. [HON. MEMBERS: "He has not said that"]. It is not surprising that such irresponsible nonsense alarms the right hon. Member for Stechford.

§ Sir A. Meyer

It is essentital to be honest with the nation and to tell the people that for the next two years or more there will be no rise in living standards as a whole. If people want the miners to get much more than the present offer, if they want, as we all want, higher pensions and if they want the environment to be improved, the rest of us must accept not merely a standstill but an actual fall in our standards of living. Soaking the rich will not help appreciably, as we have seen from the figures given by my right hon. Friend—

§ Mr. Eric S. Heffer (Liverpool, Walton)

We might as well start with them.

§ Sir A. Meyer

It would have to be done with a good deal of care if it were not to frighten away the foreign capital investment that the country so desperately needs and if our present difficulties are not to become a permanent part of our condition. In the short term the need is to reassert the authority of the elected Government and repair the defences against hyper-inflation. It may be easier to achieve this if some concessions are made to organised labour, but they must not be in the sphere of the Government's authority or connected with the defences against inflation. I have suggested a fairer distribution of capital as one possibility. In the long term the nation must put more of its resources to capital investment and less to current consumption than has been the case for a long time.

I am doubtful whether the short-term aims can be achieved with the acrimonious and sterile two-party system that we have at the moment. I am still more doubtful whether the long-term aims can be achieved with such a system. High-pressure investment which involves giving priority to drilling rigs before schools and hospitals, and giving preference to the people we need rather than to those in need, is a harsh and unpopular policy. Most countries use a dictator to carry through such a policy. I believe that we could pull it off within a democratic system, but only if the moderates work ever more closely together and only if they show themselves every bit as tough as the extremists. There are many Labour and Liberal Members who have a vital part to play in this process.

The Leader of the Opposition, as every Labour Member knows in his heart of 1239 hearts, has no such part to play, but the Prime Minister, awkward and unbiddable as he may be, has the courage and resolution without which the most conciliatory moderation would avail us nothing.

§ Mr. David Steel (Roxburgh, Selkirk and Peebles)

The House has just listened to a remarkable speech from the hon. Member for Flint, West (Sir A. Meyer), a speech full of pleas for conciliation but peppered with inflammatory comments. However, I agree with some of the hon. Gentleman's observations, and with two in particular.

First, into the current negotiations the Government should consider placing if not the repeal or change of the Housing Finance Act at least a cancellation of the next round of rent increases due in a few weeks' time. Secondly, it is time we came to an end of the argument about whether we are talking about repeal or amendment of the Industrial Relations Act. It is clearly a dead duck. When it passed through the House, the Government refused to accept amendments from the Labour Party or the Liberal Party. They drove the Act through unaltered. But they are not now using it. Therefore, we should end the argument about amendment or repeal and start again.

It seemed to me on listening to the two opening speakers, the hon. Member for Ebbw Vale (Mr. Michael Foot) and the Secretary of State for Social Services, that we were hearing what had been prepared as the first act in an election drama, but that they realised towards the end of their speeches that someone had forgotten to order the scenery and that the whole performance had been cancelled. The Secretary of State appeared to be giving a lecture to the Conservative Political Centre rather than an argument in the present debate.

It is important to go back a few years to the time when the House first started to talk about a prices and incomes policy. Before we ever reached the statutory phases, we were talking about what was then officially called a policy for prices, incomes and productivity. In recent years we have lost the last two words from the discussion. It is to the words "and productivity" that we should return.

I recognise that for technical reasons productivity agreements cannot apply in 1240 the mining industry, but the principle of a prices and incomes policy must be tied to greater production as well as greater equality. To me, the most astounding lesson of the three-day week is that industrial production has kept up at between 70 per cent. and 80 per cent., and that in some industries it has been higher. That has in part been achieved by people working longer hours and doing different jobs from those which they are used to doing. But the basic lesson is that if we could keep up over a five-day week, and sometimes a six-day week, the levels of output we have been able to achieve during the three-day working week crisis, many of our economic problems would be over. The Government should be examining what has been happening during that period.

I found it extraordinary that the television news thought it newsworthy and interesting, at least twice during the Christmas Recess when I was watching, to film meetings between management and labour, between company directors and shop stewards. It was news that people were sitting down together to decide how to get out of their difficulties. What I do not understand is why the CBI and the TUC and the Labour Party continue to drag their feet on the vital question of extending industrial democracy, giving people in their everyday working lives a greater say on how industry is run.

The Government have been promising us a Green Paper on the subject for some time. The proposals have been battered about between the CBI and the TUC. I suspect that if it ever reaches the Floor of the House the Green Paper will contain no proposals for Government action but will merely be a paper for debate, a paper emasculated down to the last common denominator of what is accepted by the hierarchy of the CBI and the trade unions.

Yet there is great scope in the working population and the management population at large. There is a great desire to have a form of industrial relations which is much more co-operative at grassroots level and which gives people working in industry a greater say at their place of work as to how that industry should be run.

That is my reply to the right hon. Member for Fulham (Mr. Michael 1241 Stewart) when he chides the Liberal Party for not being prepared to go along with a massive extension of public enterprise. One of the disappointments about public industry in Britain is that it has totally failed to use its privileged position of public ownership, its position of not being responsible to any body of shareholders but being directly responsible to the Government, for experiments in more democratic control of industry, in greater working satisfaction, and in greater devolution of decision making. If that had been the record of public ownership, perhaps we would take a different attitude to it, but there is no easy answer there.

I do not see why we should have to have appeals to a phoney Dunkirk spirit before achieving the level of co-operation that the Secretary of State mentioned, a far higher level of co-operation at factory level between management and labour to increase productivity.

§ Mr. Heffer

I am not asking this to score points, but I should like to know whether the hon. Gentleman is suggesting that the co-operation leads to productivity agreements or that the joint works councils, or whatever they are called, lead to the workers having a real say in decision making. Is the hon. Gentleman aware that productivity agreements can sometimes be the very source of industrial conflict? I know that, having spent my whole working life in industry before entering the House.

Works councils which give workers a real say in the running of industry are a great extension of industrial democracy, and many Labour Members and members of the Labour Party outside have been advocating them for the past 20 years.

§ Mr. Steel

I am delighted to hear that. But I understand that the official policy of the hon. Gentleman's party has been still to resist the type of works councils that we want to see made statutory in every place of work employing more than 20 people, giving those who work in industry a greater say in how it should be run. During discussions of the subject at trade union meetings I have been told, "We are not in favour of this, because managers must manage 1242 and workers work." My party opposes that attitude.

I took down the Minister's words when he said that management must act—

§ Sir K. Joseph

Initiate.

§ Mr. Steel

—that management must initiate and workers must respond. I am reminded of the definition of partnership advanced by a Rhodesian politician during the days of the Central African Federation, when he said that the partnership he envisaged between black and white was that between horse and rider. I suspect that the right hon. Gentleman is getting very close to that definition when he is seeking more co-operation.

We believe that the past few weeks have shown that, faced with adversity, people are driven together on the industrial front to work and produce a far higher level of output. Surely, a statutory provision enabling that to become the common experience of industry would be for the benefit of the country?

Having said that, and made the point about trying to obtain more growth and higher output, I must add that I do not think that in our society greater growth will automatically produce more happiness. One of the lessons we learn, particularly in large-scale industry in Britain, is that no amount of increased wage at the end of the week will compensate people for a life of industrial tedium. That is another reason for introducing forms of industrial democracy which give people not just a bigger financial stake in what they are doing but a greater feeling of involvement.

It is important to look at what other countries are doing, such as the experiment in Sweden, where the Volvo motor car company has constructed a complete departure from the car assembly line and returned to the concept of groups of people assembling the complete car to see what level of job interest can be reinjected into what has become a de-humanising process.

I come to that part of the motion which deals with social justice. The Labour Party must come clean on the question. I watched on television a good debate at the last Labour Party Conference on whether there should be guaranteed 1243 national minimum earnings. It was interesting to see the division within the party on the motion, which was defeated. Those who supported it were representatives of the trade unions to which the lower paid belonged.

I believe that they supported it because the system of totally free collective bargaining, unrestrained by any form of statutory incomes policy, is bound not to lead to social justice. Instead, it leads to higher rewards for those with the strongest and most effective voices in the trade union movement. That is why we in the Liberal Party have always argued, during periods of both Labour Government and Conservative Government, in favour in principle of a statutory incomes commission, not to take away the decisions from Parliament—here I agree with the hon. Member for Ebbw Vale—but to advise the Government and Parliament on a fair distribution of the fruits of a prosperous society.

The Secretary of State should not minimise the great scope for an examination of the tax avoidance industry. It has become one of the growth industries in Britain.

Nor should we minimise the effect of the demonstration this weekend at Centre Point. If Centre Point were occupied tomorrow, the housing problems of London or the problems of tax avoidance and office accommodation would not be solved overnight, but Centre Point is a standing monument to the Government's failure to deal with some basic injustices in our society. One Minister has constantly gone on television and said that something would be done about Centre Point but, in fact, nothing has been done.

§ Mr. Steel

That is why extra-parliamentary activity has been necessary to draw the public's attention and the Government's attention to a clear injustice.

§ Mr. Cormack

On this matter—

§ Mr. Steel

No, I shall not give way.

Another form of inequality is that which has grown up between the regions. The income figures for 1972 show that in the Coventry sub-region the average weekly wage of an adult male worker 1244 was £37. In the Scottish border sub-region, which is an area which I represent, with a cost of living not very different, the average wage of an adult male worker was £23. That is too big a gap for any society to allow and accept which is aiming at equality or social justice.

That is why the Government must reconsider their present commitment to abolish regional employment premiums. That is vital not just as a method of attracting new industry—and maybe the Select Committee is right in saying that it is relatively ineffective in doing that—but as a piece of fiscal machinery to compensate industry for higher transport costs and to enable industry to pass on some of the benefits to its work force. Some form of REP must be retained and developed as part of the equipment with which to achieve a more just and equal society.

In the context of regional variations the Government must be concerned with its public spending programme. We should not countenance £2 million or £3 million of public expenditure on projects such as Maplin and the Channel Tunnel which will have an adverse effect on the regional structure and prosperity of Britain.

I must refer in passing to the amendment which has been tabled by my right hon. and hon. Friends. It is not just the policies but the postures of the two major parties which we constantly oppose. I do not believe that a divided party can do anything for a divided nation. I have read with interest the statements about the pressures within the Labour Party, for example, to ensure that if there were an election only the acceptable face of Socialism would be high-lighed to the electorate. No doubt we shall hear about part of that face later this evening. In the Government there is a division between the hawks and the doves. It is one which is now fairly widely advertised by Government Members. A Government which seeks to unite the nation cannot be based on sectional interests. That is why the country is suspicious of a party which derives £1 million a year from big business and a party which derives 90 per cent. of its election funds from the trade unions.

The people are now considering prices and incomes policies and they are looking 1245 at the sectional interests which the parties represent. They are then asking, "Who is it who represents the consumers and not the voice of big business or the strong trade unions? Who is prepared to form a Government which will not set class against class, management against worker and house owner against tenant?"

A few years ago there was a popular song, which came from an American musical, in which the immortal words were sung: And the people all said, 'Sit down, sit down, you're rocking the boat'. During the past few weeks the ship of State has been rocked substantially and the people are saying to those responsible, "For heaven's sake sit down".

§ Mrs. Connie Monks (Chorley)

In spite of much evidence of mirth at the beginning of this afternoon's proceedings, when I looked into the Gallery I did not there see evidence of mirth. I feel strongly that the nation and the public are criticising Members of Parliament for presenting the image to the country which is presented. I can assure the House that none of the people outside find the present situation amusing. In insulting any Prime Minister so blatantly as he has been insulted today, the person concerned does great damage to the democratic system and plays his part in bringing about the very situation of dividing the nation when we should be closing our ranks and ensuring that democracy is saved.

The wording of the motion represents the greatest piece of kidology which I have ever read. The momentous words of the motion which have hardly been mentioned today are in the title—namely, "The Divided Nation." If there is a division—and I do not accept that there is—we should be asking ourselves what we are doing in the House to help to heal it. Even to encourage the thought of the nation as divided is unwise, and it is folly to assert in the Mother of Parliament that it is divided.

We cannot all think alike, but in any democracy we must learn to accept a majority decision. That is one of the first things which we learn when we go to school, but some hon. Members have 1246 not learnt it yet. Each group in the nation is interdependent with other groups, but we are all one nation and we prosper or we go bankrupt together. We share a common heritage and the hopes which we all share as a nation are infinitely more important than the differences of opinion which tend to divide us.

Perhaps I shall be accused of going back into history, but sometimes it would be wise if we did. There is a great deal which we can learn from the past.

§ Mr. Heffer

The English Civil War?

§ Mrs. Monks

I should imagine that the English Civil War is not something which we want to carry on in this age, which should be a little more enlightened, but sometimes there are heads which I should like to chop off—what would that do for conciliation? As hon. Members know, I manage mostly to keep my thoughts to myself.

It was Disraeli who exposed the gulf between the poor and the rich. There is nothing new about that. It was Disraeli's measures—and he was not a Liberal or a Socialist—which gave the working man the vote and completed the legalising of the trade unions. He did not know what he was doing when he did it, but he did it. Keir Hardie is a famous name to some Opposition Members. As we all know, he was not exactly a friend of the Conservatives, yet he wrote: As a matter of hard dry fact, from which there can be no getting away, there is more labour legislation standing to the credit account of the Conservative Party on the Statute Book than there is that to their opponents. But that was some time ago.

The Labour Government, in their wisdom, tried to evolve a system "In place of strife", and they were not allowed to succeed. My Government have evolved a pay and prices policy designed to be as fair as is humanly possible between producers and consumers alike. It is under attack. To allow the policy to be broken now would mean that in future whichever party held a majority in Parliament would be at the mercy of any group prepared to use its power ruthlessly. That would be the road to anarchy. That is a very solemn thought.

I agree with the Lord Chancellor that this country is facing moral and constitional issues of the gravest order, and we need to consider very carefully where we 1247 are heading when inflamed self-interest appears to be taking over without any consideration for other groups who also have rights. With rights we must couple responsibility or innocent people will suffer, as they have been suffering in the last few weeks. Is this greed or a determination to wreck the system which serves this country well and is built in to our history? Possibly it is a bit of both.

Recently we experienced a moving example of national family loyalty when Princess Anne was married. [Laughter.] I was waiting for that guffaw. That day was a wonderful gesture to the whole world and proof, if proof were needed, of the fact that the vast majority of the British people are loyal to the Sovereign, to their British nationality and to this House, regardless of their politics.

We are one nation, and we shall prosper or fail together. A Government cannot be called divisive because it strives to protect the interests of the whole nation as against the selfish interests of groups or individuals. In fighting inflation, the Government are taking on the battle in the common interest for us all—[HON. MEMBERS: "Hear, hear".] I am glad to have the approval of hon. Members opposite. The Government are fighting the battle for those who are not economically powerful as well as for those who are.

In the long run, those who may, for a time, enjoy excessive wage increases—and we have had one since I became a Member—can find themselves priced out of their jobs.

§ Mr. Heffer

Excessive?

§ Mrs. Monks

Yes—in some cases, very excessive. Perhaps hon. Members would like to include me in that. However, the country as a whole suffers because the economy is unable to expand and we cannot compete in world markets. Our ability to compete in world markets is important. Only the Government can take an overall view, and even to suggest, as the motion does, that in so doing the Government are creating a division in the nation shows how out of touch the Opposition are with common sense views.

Our society needs to hold in check the weaknesses and follies of man, which are obvious today. We call our society the 1248 "permissive society" whereby people may have the right to go to the devil in their own way. They have always had that right. But society as a whole—and I mean this very seriously—must be seen to support the virtues, especially tolerance, or we are lost.

Democracy is on trial. It is having to operate under a searchlight of publicity and with every word recorded so that any change of direction is noted and is open to criticism. This affects everybody—Government and Opposition. Many people lose sight of the fact that only a wise man and a brave man with no self-interest or false pride changes course when altered circumstances require it. A brave and wise man changes his mind ; a fool never does.

The Marxist idea of a class war is false to the history of this country. It is generated in the minds of those who have a permanent inferi