DEBATE ON THE ADDRESS

HC Deb 01 November 1950 vol 480 cc164-293

[SECOND DAY]

Order read for resuming Adjourned Debate on Question [31st October]: That an humble Address be presented to His Majesty, as follows: Most Gracious Sovereign, We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament"—[Mr. Kenyon.]

Question again proposed.

3.38 p.m.

Mr. R. A. Butler (Saffron Walden)

We are now starting upon the general Debate on the Address following the important speeches that were made yesterday. I understand that the idea is that this Debate today shall open with a general approach first of all to the question of foreign affairs and then to the effect of the foreign situation and of rearmament upon home front problems. It would be most unsuitable if reference were not made further from this side of the House to the observations which were made by the Prime Minister yesterday on the foreign situation.

While I shall not devote very long to this part of my remarks, because there are other and perhaps more controversial matters with which I want to deal, I think it is appropriate that we should, at the opening, welcome the Prime Minister's references to the recent alterations, under the Acheson plan, in the operation of forces of the United Nations. As Mr. Acheson said, The obligation of all members to take action to maintain or restore peace does not disappear because of a veto. This new machinery which has been set up will, I think, be more effective in enabling the Security Council to exert powers of enforcement.

The situation cannot be said to be easier than it has been. Mr. Marshall himself, whose return to the Ministry of Defence we all welcome, used these very striking words: The struggle may only have begun. The actual collective forces of the North Atlantic States may not be enough to deter aggression in our North Atlantic area and definitely is not enough to resist attack without serious and critical initial losses. The gap in military strength we must now close as quickly as possible. We are glad that it is to this task and to the task of organising the United Nations machinery in such a way that it can be effective that His Majesty's representatives on the American continent and in the Foreign Office here are now devoting attention.

We naturally trust that the fighting in Korea will come to a speedy finish and we agree with the Prime Minister that there must be no delay on the part of the United Nations in assisting that country to achieve its unification. If the Under-Secretary of State is to reply, we shall be obliged if he will give us more information about the fund, to which the Prime Minister referred, for relief in Korea after the victory has been gained, and we should like to have further information on what the final political and international set-up is likely to be in that part of the world.

But there are, perhaps, matters of even wider importance than these. We noticed in the speeches made by the representatives of His Majesty's Government and in the tone of the Gracious Speech yesterday that there was a general feeling that the avoidance of war was our main objective. So far, so good, for no sane man or woman would desire any more noble objective; but it seems to us that something more positive is needed than the mere avoidance of war. We seem to remember from our international and national history that an approach based solely on the avoidance of war is not necessarily crowned with the success which it should have, and we therefore say that there is a vital need today for an increased British leadership in world affairs. We are not satisfied, for example, that in their attitude to Europe His Majesty's Government have taken a sufficient lead. We have noticed criticisms by M. Spaak, the prominent Socialist, in an address at Chatham House on Monday last in which he said that the crisis of Europe in 1950 was due to the fact that the hopes of 1949 in Europe had been disappointed by the British attitude.

The need of Europe was stated at Zurich by my right hon. Friend the Member for Woodford (Mr. Churchill), and I should like to say that the impression given by the Lord President and the Prime Minister that the Government are unable to give Parliamentary time to take the Strasbourg resolutions in this House is a further indication of a lukewarmness towards this European venture on the part of His Majesty's Government, and I sincerely ask the right hon. Gentleman and the Prime Minister to reconsider the matter. It really would be undignified if we had to tell Europe that it is only due to the fact that the Opposition are ready to give part of their precious time on a Supply Day to this matter that these questions can be seriously considered in this House.

The Lord President of the Council (Mr. Herbert Morrison)

The point which the Prime Minister made was that the Leader of the Opposition, taking it on his own initiative at Strasbourg, indicated that there was time at the disposal of the Opposition and that they would utilise that time for this purpose. [HON. MEMBERS: "No."] I think it is so. If that is so, it would not be right for it to be one thing in Strasbourg and another thing at Westminster.

Mr. Churchill (Woodford)

What I said was that if the Government would not give the time, we would do so.

Mr. Morrison

We will look it up.

Mr. Butler

While the right hon. Gentleman is looking up this mtter, the validity of my point remains, namely, that time for the consideration of the Strasbourg resolutions should have been given by His Majesty's Government and not conceded out of their own time by His Majesty's Opposition, and I trust that the right hon. Gentleman will give a little more attention to that matter. M. Spaak went a little further and said that there was in Europe an instinctive mistrust of Britain and in Britain an instinctive mistrust of the Continent. He went on to say that there was nothing to stop an integration of Europe in companionship with the bringing together of the British Commonwealth and Empire. I believe that to be the case, and I ask His Majesty's Government to consider the early calling together of the representatives of the Dominions so that the matter of bringing together the problems of the Commonwealth and of Europe may be brought nearer to completion.

Mr. Marshall's words, serious as they are, draw attention to the intense burden and urgency of rearmament. The Prime Minister made one very important statement in this connection when he said that a reconsideration was going on about the whole question of American aid. It would be most unwise for any injudicious or badly-thought-out sentiments to be expressed from this side of the House on this important issue, and I should simply like to say, on behalf of my right hon. and hon. Friends, that, realising the big difference that there is now in the position of our reserves, realising the improvement that there is in that respect at any rate, though not in others, in our economic position, there would be great moral advantage in being able to proceed into a new department of our relations with America.

It is perhaps appropriate in our new Chamber to express our gratitude to Congress for the manner in which they have voted this aid in the past. Perhaps it is not too much to suggest that it might be possible, by one of those arrangements which are the result of careful statesmanship and more careful negotiation, to merge into the aid which it may well be both desirable and necessary to receive from America for the arms programme the remaining features of the aid which we have already received.

Before leaving the foreign situation, I should like to refer to the events in South-East Asia. We have thought that hitherto insufficient reference has been made to the deterioration, as we consider it, of the position in Malaya. Some of our hon. Members have returned from Malaya, together with hon. Members from the other side, and the reports which we have received from them and from Indo-China indicate that the situation is by no means yet in hand, as it should be, and we hope to have time during the discussion of the Address to consider the position in South-East Asia. There seems to be something psychologically wrong in our handling of the races of South-East Asia, as there is still something psychologically wrong in our handling of the new Communist China under Mao-tse-Tung.

At the Labour Party Conference, the Foreign Secretary referred to China as a great pacifist nation, but we have waited now for the best part of a year for any sign of reciprocity after the recognition which we granted to the new régime. We consider that our advice given at that time and since that recognition of the new régime in China should have marched hand in hand with similar steps taken by the Great British Dominions and by the United States of America would have been the wiser course, and nothing that has occurred since has made us in any way alter our opinion on that matter.

Now there is a new phenomenon in the Far East, and that is that Chinese forces are reported to be invading Tibet. The importance of Tibet strategically to India and Pakistan is well known to any of us who have had relations with that part of the world, and I hope that this event will shake into a sense of reality the Governments of India and Pakistan and will bring the whole front of India, Pakistan, the United States of America and Great Britain into a closer line of defence than it has been in the past.

I should like to say at this stage that I trust the British Foreign Secretary will in no way lose touch with what I regard as the sensitive, although not always correct, approach of Pandit Nehru to world problems. It would be a tragedy if the paths of the new India and of Great Britain were not identical in these great problems, not only of China but also of South-East Asia. Therefore, let us hope that the result of this recent development will be that these nations are brought more closely together, and that we use the wisdom of Pandit Nehru in our own domestic Imperial councils. Those are all the questions on foreign affairs to which I wish to pay attention at the opening of my remarks.

Coming to the impact of the foreign situation and the re-armament programme upon the home front, the first great truth that emerges about the home front is that it is possible that increasing productivity may enable us to bear many of the great burdens that the re-armament programme will impose. I recently attended the Colchester Oyster Feast where, in the presence of a number of hon. and right hon. Gentlemen opposite and of a few oysters, I listened to the right hon. Gentleman the Foreign Secretary make a singularly impressive speech on those lines. The Father of the House, and others who were there, could testify to the sincerity of the right hon. Gentleman in referring to the necessary strength we must have to create peace, and also in saying that if productivity increases at home in industry and agriculture, we may go some way towards paying for this great burden.

If we all accept in the spirit of that Feast the truth of such a remark, we should now turn our attention to the manner in which productivity in this country must be encouraged because unless we encourage productivity the only alternative methods of financing our new programme are increased burdens, increased taxation, increased suffering and increased difficulty for our economy. I said just now that there was evidence of the improvement in our economy. It is a somewhat sinister fact that the main improvement in our economy derives from the rise in world commodity prices, particularly in South-East Asia, where we are at present engaged in such trouble in fighting the vanguard of Communism. Unless we win that victory, how can we be sure that these very commodities which are assuring part of our recovery will be available for that recovery?

Further, if we examine our economy alone without regard to the tin and rubber of Malaya, to the wool of Australia, or to the jute of India, we find that we are still facing immense difficulties in our island economy as apart from the economy of the sterling area as a whole. We are facing mounting costs; we are facing increased wage demands; we are facing the thawing of the wage freeze associated with the name of the late Chancellor of the Exchequer; and we are facing a mounting inflation and not a risk of inflation, as it is referred to in the Gracious Speech. There is also at the same time a distinct need, if we are to maintain our economy and to maintain our exports, to moderate Government expenditure and to face the problem of inflation in a much more dramatic manner than the Prime Minister did yesterday, with his little story about the railway train.

In face of these problems, the Government should encourage enterprise where-ever it is found, because that is the only way to improve productivity—to give incentive wherever possible and to con- trol first and foremost its own excessive interference and its own expenditure. If there are to be controls, the Government must give a lead by showing some power to control themselves and their own expenditure. What is wanted, as "The Times" leading article said today, is public economy and private efficiency. In face of these needs to encourage productivity, the Gracious Speech is most disturbing because it gives a clear indication that the Government propose to rely on permanent physical controls and an intensified planned economy to achieve results such as full employment and the avoidance of inflation, which we think can far better be achieved in the ways I have already indicated.

It is the determination of the Opposition to maintain a policy of full employment, and, as anyone who read the recent report of the Trades Union Congress on this matter will realise, the present policies for full employment are based on the White Paper produced in 1944 under the Premiership of the present Leader of the Opposition, a paper which several right hon. Gentlemen here on both sides produced together. Our aim is to defend full employment and to ensure that the resources of the community are used to the best advantage and to avoid inflation. Of course, there must be some controls in our general economy. We have already stated that. In the course of the speech I am making, I shall indicate certain aspects of control which are necessary at the present time and may be for some, we hope, short time ahead.

We indicated our willingness in this direction in the Debate which took place on 23rd October on the question of the Supplies and Services Act, and the statement made by my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) at that date gives an indication of our policy in this respect. He said: … we cannot hold ourselves responsible for taking any action which, on the one hand, would possibly injure rearmament, and, on the other hand, bring about complete administrative chaos … in directions in which we are still convinced that it is necessary to carry on with some controls."—[OFFICIAL REPORT, 23rd October, 1950; Vol. 478, c. 2523.] That indicates the bona fides of the Opposition in regard to controls and to our general attitude towards the Supplies and Services Act. But the Government are now asking in the Gracious Speech that they should be given powers to regulate production, distribution and consumption and to control prices on a permanent basis but subject to Parliamentary safeguards. This follows, as far as we can see, the general line of the Lord President of the Council in speaking to the Socialist Party Conference at Blackpool on 8th June, 1949, where he said: The Executive and Government have no intention that the Supplies and Services Act shall come to art end. It is an essential basis for the organisation of economic planning and control, and therefore we shall place a revised and permanent version of that Act on the Statute Book if we are returned to power. There was a little playing down, a little muting of this view at the last election, and only side references to it in the Debate in this House on 23rd October. But with the Gracious Speech we have now got back to the naked view of the Socialist Party as expressed at Blackpool in June. 1949, that Labour proposes to rivet on our economy a permanent system of controls to ensure the permanence of the Socialist conception of handling our economy at home. We regard that design to rivet the Socialist system on the country as rot only extremely dangerous but extremely undesirable, for reasons which I shall give. My right hon. Friend the Leader of the Opposition stated our view at Blackpool in May of this year, when he said that we should oppose the permanent extension of the Act and insist on the continuation of it only on a year-to-year basis, in order to attract and retain full Parliamentary control. That is our policy, and that is the answer to the Lord President when he appears to think that we are ready to see all the powers under discussion transferred from the sphere of Parliament to that of the Executive.

Let me give some examples of our very sincere objections to this course. We made clear, when we took part in the Debate of 23rd October, that many of the controls that had to be renewed or else rejected in toto we considered to be unnecessary or objectionable, or both. Let me, however, take two major examples to indicate the strong objection which we have to the course the Government are now taking.

We have always regarded it as unwarrantable that the Government should propose to make permanent Regulation 58A, the power to direct labour in peacetime. This may sound a very general remark, but if we examine this Regulation in detail—there are plenty of Regulations in this volume which hon. and right hon. Gentlemen ought to examine—we see that it gives literally tyrannous powers to the Executive over the individual. It says, for example—and I am quoting a paragraph from it which my hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), has already indicated to the House—that: The Minister of Labour and National Service … or any National Service Officer may direct any person in Great Britain to perform such services in the United Kingdom or in any British ship not being a Dominion ship as may he specified by or described in the direction, being services which that person is, in the opinion of the Minister or Officer, (capable of performing. Those seem to us to be powers which it would be absolutely wrong for this Parliament or any other, if we are to preserve the spirit of Parliamentary government, to hand over in permanence to the Executive.

If the Government think that they are going to push forward a power like that into the sphere of the Executive and retain it only subject to Parliamentary safeguards, which, we are convinced, will be illusory, they will be in for the biggest fight of their lives in this Parliament; and we shall be inspired by that spirit which inspired our ancestors, namely, the retention of individual liberty and the power of Parliament over the Executive. This is a perfectly sincere difference o opinion. If hon. and right hon. Gentlemen opposite think that they are going to rivet these powers of the Executive over the individual, they will find that they are very much mistaken when these matters are put clearly before the country.

I have endeavoured to be fair to the Government and, in particular, have consulted the first notable speech made by the new Chancellor of the Exchequer in the Debate of 23rd October. In this connection—and in passing, as we are in the midst of controversy—I should like simply to say that we on this side all recognise the loss the country has sustained by losing the abilities of the former Chancellor of the Exchequer. We trust that he may return in due course, as, indeed, he has informed me personally that he hopes he will, to his usual health. Leaving that matter on one side and coming back to the controversies we are discussing, the new Chancellor of the Exchequer said on 23rd October: I could not honestly and conscientiously say that within the next 12 months it is quite out of the question that we should need to make orders under this regulation."—[OFFICIAL REPOR I, 23rd October, 1950; Vol. 478, c. 2594.] And we have not had, either from the Lord President or from the new Chancellor, any disavowal of the fact that it seems likely that this Regulation will be carried forward into permanent legislation by the Government under the powers which they seek through the terms of the Gracious Speech.

Let me take another example. We object equally strongly, although this matter affects corporations and institutions more than it does individuals, to the intensely wide terms of Regulation 55, which is, perhaps, the most notorious of all these Regulations. Under it the Government may regulate or prohibit by Statutory Instrument the production, treatment, keeping, storage, movement, transport, distribution, disposal, acquisition, use or consumption of articles of any description for the purpose of ensuring that the whole resources of the community are used in any manner which they think fit.

We definitely regard that Regulation as not being suitable for carrying forward out of the sphere of Parliament into the sphere of the Executive so that they may make orders. We realise that the cat has been let out of the bag by the secretary of the Labour Party, Mr. Morgan Phillips, at a Press conference on 19th August, when he stated that the Socialist policy of starting up public enterprises to compete with private enterprises could be effected under the powers given by Defence Regulation 55. We see that the aim of the Government is to take powers by this permanent legislation to take what Socialist action against private enterprise they think fit at any time.

The Lord President may say that he does not seek to take these powers at any time, and perhaps he or the Government may treat us later in this Debate with a little more candour than they have in the past, because when the Supplies and Services (Extended Services) Act, 1947, was going through Parliament, the Lord President refused to tell Parliament what the Government intended to do with these powers. He used this language: … we are not going to be cross-examined in advance on what exactly we are going to do with the powers when we get them. There is no legitimate case for doing so, none whatever."—[OFFICIAL REPORT, 8th August, 1947; Vol. 441, c. 1798.] If it still is the case today that we have to go outside to a Press conference and find from the secretary to the Labour Party what the Government have in mind in using Regulation 55 when it is permanently enshrined, all I can say is that the Lord President is treating Parliament with contempt. It may be seen, therefore, that we are handling here something which may be described as a matter of first-class principle, and no I doubt further speakers in this Debate and during the next few months, when the Government bring forward their proposal and explain it to us, will go into it more closely.

I want to say this to the Lord President. I have never read this book before and, to do him justice, because he is not sympathetic with Fascism himself, I very much doubt whether he has read it. I was provided with it today. It is entitled, "Fascism," by Sir Oswald Mosley, "100 Questions Asked and Answered." My attention was drawn to Question 17—"How will you use parliamentary power?" The answer is this: The first Act of a Fascist majority will be to confer on Fascist Government the power to act by Order, subject to the right of Parliament at any time to dismiss the Government by vote of censure if it abuses that power. That is the Reichstag method of governing. [Interruption.] It is the Reichstag method, whatever hon. Members opposite may say; and however sincere they may be in their personal objections to Fascism, it is leading precisely in that direction and it is something which we on this side are not going to have, and we are going to put up a fight if the method of governing this country is to be by Order.

Mr. H. Morrison

The pro-Hitler Tories.

Mr. Butler

The Government may say that they will introduce these powers subject to Parliamentary safeguards. Let us just examine what these Parliamentary safeguards may be. What is meant? Do the Government mean to use the procedure of the negative Resolution? If so, we regard that as a quite inadequate method of safeguarding the liberties of Parliament and the Private Member. If Parliament is to remain alive and itself in control, the reserve powers must vest in Parliament and not in the Executive.

I said just now that there would be some controls—of which I shall give some examples, because we must all contribute what we can to this Debate—which we would consider necessary to retain for certain vital reasons. It may be necessary, at any rate under an Administration of the sort of competence we have now, to consider powers to control scarce materials or provisions for some little time ahead. It may be necessary, for example, to simplify the present method of controlling prices which, I understand, is done by at least three Acts of Parliament and one Defence Regulation.

It may be necessary to have powers of that sort, but we say that if such powers are necessary, as in the case of scarce materials and provisions, then just exactly the necessary powers to deal with these matters should be taken by the Government under specific annual Acts and these should be made renewable by annual Addresses in which Parliament takes the initiative, as was done during the war with the Emergency Powers (Defence) Act. That is a constructive proposal for dealing with the absolute powers which are necessary, and we think it far better than using the Expiring Laws Continuance Act method because that Act, with its Schedule, is very often most unsatisfactory and does not encourage or elicit the best form of Parliamentary comment.

We think the Government's present proposals, as hitherto explained to us, are wrong economically because they will not encourage the productive spirit, they are sinister constitutionally, they are designed in the interests of the Socialists retaining power and not in the national interest, they are on a par with the action taken to centralise control by the recent Act in connection with iron and steel and in the smaller, but equally obnoxious, venture in regard to sugar.

But perhaps the most sinister aspect of these powers which the Government desire to take is the obvious sense of despair which is evident in the Government's outlook by their desire, for example, to continue in permanent legislation all their requisitioning powers and all the totality of the restrictive licensing system for building. It is quite clear that the Government not only accept scarcity but also are unable to face up to the necessary urge to break loose from some of these controls and some of these restrictive systems. Are the Government never going to be in a position to build enough houses to restore those that have been requisitioned, or to ease or remove the restrictive licensing system?

We are in no doubt that we must make a great drive for increasing the number of houses to be built. At present as we see the social effort in this country we see it dissipated by trying to do everything at once, instead of concentrating on certain priorities. The new towns, the health centres we have not seen or hardly seen, the effort to try to do everything at once in education without concentrating on the priorities, all these are examples of the need for laying down priorities and deciding what can be done properly first.

The Gracious Speech says that His Majesty's Government: will maintain the essentials of their social policy. May we ask the Government to explain what they regard as the first essentials and to give us a description of what they regard as inessential? We are quite clear. We consider that social, and indeed economic, reasons make it essential to give first priority to the policy of housing, and an opportunity will arise later in the Debate on the Address for the matter to be considered in more detail than I can do it today.

I think the Government are underestimating, whether they like it or not, the urge of popular opinion which is behind our target of 300,000 houses per year. They under-estimate the urge of this opinion, but perhaps they have not felt it in the country. I am convinced that hon. Members have felt this urge in their constituencies. Some of us M.P.s who hold what I call "surgeries" and meet our constituents at weekends, know that today by far the greatest pressure from the public upon us, whose duty it is to keep in touch with the public, is on the question of the production or more houses for the people—[An HON. MEMBER: "Which people?"]—and we of the Opposition are not prepared to allow things to go on on the static and unimaginative level which the Minister of Health appears to have adopted. He may be a dynamic speaker, or a "dynamic sweeper" according to the description of the Prime Minister, but he is certainly not a strong administrative worker in the cause of housing. We are willing to challenge him and take him on at any time on this matter.

I feel that when the House reflects, as it must do, upon the stories of broken family life, of juvenile delinquency and the increase, for example, of tuberculosis in Scotland, we must associate it with the housing difficulties in Scotland. In a place like Salford there are 10,000 out of 50,000 houses condemned as unfit, and in a city like Birmingham there are 30,000 houses in the central area scheduled for demolition. His Majesty's Government have had five years and more and there is definitely an urge on the part of the public, with which we are going to associate ourselves in the honourable attempt to achieve our target.

Our efforts are referred to by the Lord President of the Council as "tawdry promises." I have such a collection of tawdry and worse promises here that I could detain the House for an indefinite period this afternoon. It always seems to me that Cambridge, the town with which my family are particularly closely associated, has a sort of giddy effect upon His Majesty's Ministers. Take the statement, for example, made on 12th October, 1946, by the then Parliamentary Secretary to the Ministry of Health, who later became Minister of Works and who should have been in the game a bit. He said: Six million houses are needed in the next 10 years. To get that figure we shall have to build 600,000 a year, but I believe that by temporaries, pre-fabs and things of that sort"— whatever that may mean— we shall be able to do it. I should like to ask the Lord President of the Council whether that is a tawdry promise. Then, as in my catalogue I have several spicy observations by the Minister of Health, I will pick out one. He said, for example, again at Cambridge, this time on 24th April, 1948, two years later and after the great slumps of 1947: By the next General Election the back of the housing programme will have been broken. Those statements have been made and many can be added. For example, the Secretary of State for War, who is sitting on the Government Front Bench, said: A Labour Government is the only one which will get you that house. That was in his Election Address at Dundee. The Secretary of State for Foreign Affairs said: I believe we could build four or five million houses and knock down any amount of wretched slums and rebuild our country in very quick time. What about these promises? The fact is that we are basing ourselves on a scheme, which, as I say, can be discussed in more detail during the Debate on the Address, that aims conscientiously towards the social objective we have accepted. We further regard this housing programme as a contribution towards economic recovery. We find endless examples of that. In the Ministry of Labour Annual Report for 1949, for example, it is stated that the number of farm workers has declined because of the shortage of houses in rural areas and the Minister of Fuel and Power, in a coal production statement on 25th October, said that housing still remained a difficulty. It certainly is a social and production difficulty at the present time.

I should like to make one reference to leasehold reform. We have been asked about our view. We are inclined to agree with the Government that there is no easy solution of this complicated problem. We should like to ask what final plans the Government are making. In "Let Us Win Through Together," the Government said that the law of leasehold would be reformed. So far as I can see they are merely imposing a moratorium. We believe that there is need to do three things. First, there is the necessity to extend the protection of the Rent Restriction Acts to ground lessees in occupation of their premises within the rateable value limits of those Acts upon the expiry of the leases. Secondly, we think that greater security should be given to tenants of business premises; and, thirdly, we think that amendment and consolidation of the law in regard to landlord and tenant is necessary, particularly in regard to repairs and improvement. We shall await the detailed plans of the Government and, if they are not satisfactory, we shall attempt to include further provisions by way of amendment and advice.

The Minister of Health (Mr. Bevan)

Will the right hon. Gentleman favour the House with an elucidation of the term "consolidation of the law relating to landlord and tenant"? Does it mean increased rents?

Mr. Butler

No. The right hon. Gentleman should not try to trap me into an injudicious statement. I mean precisely what is stated in the majority Report of the Leasehold Committee in regard to proposals for repairs and improvements, and if the right hon. Gentleman will read the majority Report he will see what they say.

Mr. Bevan

"Consolidation" is a term usually used for the purpose of bringing together several Acts of Parliament into one Act of Parliament. "Consolidation" is not used for an amendment of an existing Statute.

Mr. Butler

I have asked the right hon. Gentleman to examine the source of my observation and I hope he will do so indeed, I am sure he is aware of it already.

I will conclude by saying that the great issue before us in this Gracious Speech is whether we move towards greater independence of, and opportunity for, the individual, or towards the straitjacket of imposed Socialism. The hon. Gentleman the Member for Rugby (Mr. J. Johnson) yesterday made reference to one of my predecessors at the Ministry of Education, Mr. H. A. L. Fisher, and this is how Mr. Fisher described the problem before us: How can the spread of servitude, by whatever benefits it may have been accomplished, be a matter for congratulation? A healthy man needs no narcotics. Only when the moral spine of a people is broken may plaster-of-paris become a necessary evil. The back of the British nation, even after five years of Socialism, is not broken, and we are awaiting our chance to restore the nation's morale and confidence.

3.55 p.m.

Mr. Paget (Northampton)

I am glad I caught your eye, Mr. Speaker, because I want to say something about foreign affairs, but I cannot resist making some observations, in answer to the right hon. Gentleman, on the question of building and of the target, programme, minimum programme, or whatever they call it, which was produced and imposed on right hon. Gentlemen opposite by the Blackpool conference. I would concede immediately that it is quite possible for private enterprise to build 300,000 houses in a year provided the Government creates the conditions in which that private enterprise can operate. Indeed, it has been done in the past. It was done in the 1930's, in the 1890's and in the 1850's.

I would ask this question of right hon. Gentlemen and the party opposite: Is it their intention to recreate the economic circumstances in which private enterprise was able to build 300,000 houses in the 1930's? Surely that is a question to which we are entitled to have an answer. Are they prepared to re-create those economic circumstances? I will give way to anybody who cares to answer that question. Let us consider for a moment what those economic circumstances were. In the first place, there was cruel deflation, as a result of which there was mass unemployment followed by a heavy reduction in wages. At that point interest rates were reduced, but confidence in industrial investment had been destroyed. That channelled private investments into houses. Nobody would invest in anything but bricks and mortar.

Those are the conditions which bring about a capitalistic building boom. Not only in the 1930's were those conditions created, but also in the 1890's and after the "hungry forties." The conditions for a private enterprise building boom are the aftermath of a massive slump.

Sir Ian Fraser (Morecambe and Lonsdale)

The hon. and learned Gentleman asked someone to interrupt him on this question, and I propose to do so. Surely in the four years before the war, when we were building 300,000 houses by private enterprise, we were in a state of mild inflation. [HON. MEMBERS: "Oh."] Yes we were, and there was falling unemployment. We were not in a state of slump but were emerging from it.

Mr. Paget

I do not think the hon. Gentleman followed what I said. When a building boom is created, first, there is a slump which is brought about by high interest rates. That slump results in very great unemployment and cuts wages down. Then interest rates come down but as confidence in industrial investment has been destroyed cheap money goes into bricks and mortar. The building boom occurs as an aftermath—of slump. May I quote two figures—I hate statistics—to illustrate that—in 1937, which was the height of the pre-war building boom, house building represented 60 per cent. of the total investment of the country, public and private? Today, it represents 19 per cent. That is the difference in the situation.

Private enterprise does not build working-class houses in boom conditions or in conditions of full employment. Perhaps I might just conclude this by quoting Mr. Taft, the well-known American. He said that the one field where private enterprise failed was building. Mr. Taft was a great supporter of private enterprise. It has failed completely in boom conditions, because in competition for the services of the building industry commercial and luxury interests can always outbid those who need dwellings. Thus, private enterprise, left to itself, never, in circumstances of full employment, builds working-class dwellings. Again, I would ask the Opposition: Do they intend to recreate the economic circumstances in which alone private enterprise can function? If not let us hear no more about their achievement in building 380,000 houses a year before the war, because it is utterly irrelevant.

Mr. Henry Strauss (Norwich, South)

May I ask the hon. and learned Gentleman a question, because I wish to follow his argument? Would he explain what circumstances the present Minister of Transport had in mind when, in his election address in 1945, he said that the Socialist Government would build four million houses in less than 10 years? That is a better average than 400,000 a year. What conditions did he have in mind?

Mr. Paget

I really cannot answer for everything which has been said in election addresses. The hon. and learned Gentleman's leader promised half a million steel houses. There are many silly things which have been said in the election addresses of hon. Members opposite. It is an irrelevant interruption and an interruption below the level of the hon. and learned Gentleman. I would suggest to him, frankly, that this is a serious argument which merits serious consideration.

If hon. Members opposite do not propose to revert to the economic circumstances which created there three building booms do they propose to build 300,000 houses within the framework of a planned economy of full employment? If they do, there is one drawback to an economy of full employment. One cannot get something for nothing. Under the old system one could. There was an unemployed pool, and, if that pool was brought into operation, substantially one did get something for nothing. Under a policy of full employment we cannot get something for nothing. What are they going to do about that? If we are to have 100,000 more houses, of what are we to have less? What is the answer? We have not been told. Are we to have less capital investment programme? Are we to have fewer armaments? Where are we to have less?

Mr. Gerald Williams (Tonbridge)

Less Socialism!

Mr. Paget

Surely someone will tell us. Are we to have fewer consumer goods?

Mr. Baker (Norfolk, South)

We get that anyway.

Mr. Paget

If we are to have fewer consumer goods I would have thought it probable that prices would be even higher—and they tell us prices are going to come down. Are we to follow the suggestion of the right hon. Member for Woodford (Mr. Churchill) and have less National Health Service wigs? Does the right hon. Gentleman imagine we are going to build thatched cottages? If not, why would less wigs mean more houses?

Mr. Nigel Birch (Flint, West)

Does not the argument of the hon. and learned Gentleman boil down to this, that under Socialism there never will be any more houses at all?

Mr. Paget

I am arguing at the moment that we have put forward a programme. When we have put forward programmes we have complied with them—[HON. MEMBERS: "Oh."]—the party opposite is trying to delude the electorate—[HON. MEMBERS: "Why?"] They have put forward a blatantly fraudulent prospectus—[HON. MEMBERS: "No."] I am asking them to substantiate their prospectus, and tell us what they intend to do. It is not merely a question of money, it is a question of skilled labour. Builders are fully employed—[HON. MEMBERS: No."] Well, obviously in some places there are a few building operatives out of employment. But I think that the hon. Member for Scarborough and Whitby (Mr. Spearman) would certainly tell his colleague two benches behind him that there was over-full employment in the building industry. There is not enough unemployment in the building industry today to get fluidity and adjustment. We have about as full employment in the building industry as is conceivably possible in an industry of that nature.

Since the builders are fully employed, how are they to build more houses? Do hon. Members opposite suggest that the existing building operatives can be made more productive? Do they say that? A good many of them have said it, but do any of them say it now? Can they tell us how the building operatives are to be made more productive? Is it to be more stick or more carrot?

Mr. Osborne (Louth)

The hon. and learned Member asks how shall we get more production from the same number of building operatives? The answer is, by paying men to do the job, by cutting down taxation, and, instead of penalising men by P.A.Y.E., paying them extra for overtime.

Mr. Paget

Do I understand hon. Members present today are going to suggest that the operatives should be given more stick? If that is so, I am sure the operatives would like to know about it.

Mr. Osborne

Would the hon. and learned Member deal with my point?

Mr. Paget

Are they to have more carrot, more incentive—[HON. MEMBERS: "Yes."]—in the form of bonus production schemes? Is that the suggestion? Because, of course, they are already in existence, both in public works depart- ments and with private builders. Most of the building is being done with private builders. Are hon. Members opposite proposing to control private builders by the imposition of new bonus schemes? What are they going to do, in practice, to get these incentives operating? Are they simply going to raise the wages? If so, how much will it cost?

There is another question. If hon. Members opposite have no suggestions, and I can get none out of them, as to how they are proposing to make building operatives more productive, can they make the building owners, the master builders, more productive? I think there is a way to do that, and here I will make a constructive suggestion—[HON. MEMBERS: "Hear, hear."] I have been asking some questions about a singularly unconstructive suggestion from hon. Members on the other side of the House. Now I will tell hon. Members opposite something about this, because we have some ideas in Northampton. There, we started a public works department to build houses by direct labour. It was started by a Socialist council with a good deal of criticism from the other side and then the other side won the Northampton Council. To their credit, be it said, they appointed an ex-builder. Councillor Ward, to be chairman of that public works department. He put his heart and soul into the work and has made an admirable job of it; let us give all credit to him for it.

What is the result of that public works department? We there have public enterprise in competition, on level terms, with private enterprise tendering for the houses, and the increase in production by private builders has been simply remarkable. Before that they took a housing contract and used it for spare time work between more profitable jobbing. Now the public works department keeps them up to scratch, and I would recommend that as an experiment which ought to be tried more widely. Something of the same sort is being suggested in the Gracious Speech with regard to sugar. There, public enterprise, in competition with private enterprise, provides a yardstick by which one can judge private enterprise and public enterprise. That competition would be extremely healthy, and it should be introduced.

If hon. Members opposite have no suggestions about how to get more houses with the existing building force—and they have produced none—do they propose to make changes within the building programme? Are we to have more houses at the expense of fewer schools, hospitals and factories? Is that where the saving is to be made? We ought to be told. Of course, that is not a real alternative. The kind of labour required for the hospital type of building is different. The two kinds are not really interchangeable; and there is also the question of the mobility of labour.

Again, is the building force to be increased? How would they do that? Would they do it in the traditional manner by creating unemployment elsewhere? If so, how would they do that? Would it be by prohibitive regulation, or what? Would they, on the other hand, resort to direction of labour? Would they direct people into the building industry; or would they offer higher wages to induce people to join the industry? The payment of higher wages to attract people to the industry is expensive, because is raises the prices of the houses which one would get anyway as well as the prices of the additional houses. What would be the cost of the additional wages necessary to attract the extra men to build another 100,000 houses? Has any hon. Member opposite, before bringing forward this demagogic suggestion, even considered that? We have not heard a word about it.

If more labour is introduced at this point it will be dilutee labour composed of people who have not served their apprenticeship. Labour of that kind is not very productive but, usually, it is most expensive. That would mean an enormously expensive programme.

Mr. H. Strauss

The hon. and learned Member talks about this proposal of 300,000 houses a year with the existing labour force as a demagogic promise made by the Tory Party. Does he realise that Mr. Coppock, in a recent statement, has said that it is possible, and does the hon. and learned Gentleman say that Mr. Coppock knows nothing about it?

Mr. Paget

The hon. and learned Gentleman should not quote remarks like that entirely out of context.

Do hon. Members opposite say that they will get these houses with the existing labour force? If so, will they tell us how?

Mr. Baker

Will the hon. and learned Gentleman tell us if he has thought about limiting restrictive practices within the building labour force which is available today?

Mr. Paget

That is extremely interesting. Is that the proposal?

Mr. Baker

Yes.

Mr. Paget

What are these restrictive practices? Will the hon. Gentleman tell us that? Will he show where they occur, and will he tell us by what means the Tory Party propose to impose new regulations upon the unions? It would be most interesting to know that.

Mr. Baker

We propose to have bricklayers willing to lay more than 300 bricks a day, and many of them are willing. We propose to co-operate with people like Mr. Coppock in getting the 300,000 houses which the people need.

Mr. Paget

Will the hon. Gentleman tell me what regulation of any union limits bricklayers to 300 bricks a day? Where does this piece of newspaper fiction come from? If bricklayers refuse to lay more than that number in any instance how will he deal with the matter? What is the stick that will prevent it? All this vague newspaper stuff—

Mr. Baker

It is not a stick: it is an incentive which should be brought about. It is fear of unemployment which makes men want to limit production. The Conservative long-term full employment policy will ensure that that does not happen.

Mr. Paget

Fear of unemployment—is that the stick[...] On the question of incentives, what is there to prevent any private builder giving any incentive he wishes? Nothing. All this is hypocritical nonsense.

Before putting forward this proposal, did the Conservative Party consider the housing requirements of the country? Will they be satisfied when there is one house for five people.

Brigadier Clarke (Portsmouth, West)

It would be a great improvement.

Mr. Paget

Is that enough? Do they know how many houses there are per head in this country? Would they be satisfied if there was one house to every four people?

Mr. Nigel Davies (Epping)

A house for every family.

Mr. Paget

It may be said that they would be satisfied with one house for every separate family, but how would they define a family? Would it be a married couple with a child, or where there is no child would they think it reasonable to accommodate an aged parent, or a brother or someone like that? Perhaps they would be satisfied with a figure of one house for, say, three and a half people. I wonder whether hon. Members opposite have even considered the question of how many houses are needed. In fact, at present there is one separate dwelling to every 3.4 people. That is roughly the figure. It is the highest in the world.

The problem is primarily one of distribution. I should like to quote from my own constituency an example of how that has arisen. In 1906, Northampton occupied about a quarter of its present area and it had three-quarters of its present population. Then it had less than one house to six people; now it has one house to three people. In 1906 there was no housing problem in Northampton. In every street there were boards offering houses to let. Landlords offered houses rent free for one month to tempt tenants into them. [HON. MEMBERS: "Those were the days."] Indeed, those were the days. Those were the days when poverty cured the housing problem. Those were the days when two or three families occupied one house because they could not afford separate dwellings. Now we have a different state of affairs.

I could tell hon. Members how they could cure the housing problem. If they repealed the Rent Restriction Acts, if they let rents go sky high in the present shortage, we would very soon find vacant houses. I think that certainly everybody on this side of the House agrees that that cure would be very much worse than the disease At present rent restriction has made occupation a vested interest. The result is that houses simply are not vacated. The legislation of the last few years has enabled people to afford not to take lodgers. All hon. Members have had experience of this sort of thing, and they know how impossible it is to get lodgings, particularly if there are children. Now, people can afford to do without taking lodgers, and the result is that an enormous number of houses today are occupied by single people. That is the basic problem that we are up against.

We have built well in Northampton, but our housing list is worse today than it was in 1945, and by this I do not mean that it is merely longer because of people who would like a house but do not really need it; I mean that we have more families who are separated because of housing difficulties, and more families living in seriously overcrowded conditions. There are more of them now than there were in 1945, because the progressive maldistribution of housing is proceeding at a greater rate than the building of houses. That is the serious question which we are facing, and, before bringing forward this demagogic programme, hon. Members opposite should consider the guts of the problem and how to deal with it.

I want to make this proposal, which, I think, is highly necessary, to the Minister. It is that the management of rent restricted houses ought to be placed in the hands of the local authorities. If they had the letting of these houses, if they had the control of the rents of these houses, so that they could adjust them according to circumstances, we could then, through that management, gradually, but not immediately, get the redistribution of houses which is the error at the very bottom of our present difficulties. I would very seriously commend that suggestion to my right hon. Friend the Minister.

I am afraid I have been very much diverted from the speech I started to make, and I now simply want to say one or two things quietly on the question of defence.

Mr. Profumo (Stratford)

I am much obliged to the hon. and learned Gentleman for giving way. The hon. and learned Gentleman asked us what was the big problem before us in regard to housing. May I say that if his speech, as I believe it does, represents the views of hon. and right hon. Gentlemen opposite, the biggest trouble is that the Labour Party is satisfied with the present speed of building houses and is not prepared to increase it. If that is the view of the Minister of Health himself, will he please tell us?

Mr. Paget

That is not the question at all. Of course we are not satisfied; of course we would like more. I have been asking questions of the Opposition on how they would get more.

If I may, in five minutes, put a point which seems to me to be of overwhelming importance, it is about the security of our western frontiers in Germany. The Government have at last come round to the view that these frontiers are indefensible without German participation. I welcome that view very much indeed, but I would make it quite clear that that participation can only be on a divisional level and must be as a part of a combined army of the Atlantic Powers, and not as an independent police force, because we cannot get two armies under separate command operating in the same area, as the hon. Member for Coventry, East (Mr. Crossman), suggested in a recent debate. That is a thoroughly impracticable suggestion.

I would say that the basic reason why it is necessary to have a German contribution is a question of morale rather than the question of manpower. We are limited by the arms we have available. I do not think there would be any overwhelming difficulty in providing from Europe the numbers of troops necessary to bear these arms, but it is no more use giving the arms to people who have not got morale than it was giving arms to Chiang-kai-Shek. If we are to have an effective army we must have people who have a sense of personal superiority to the enemy whom they are to meet. They must have the feeling that they can beat the other fellow.

I am afraid that the situation in Europe today is such that that sense exists only in Germany. Only in Germany do we find people who have real confidence that they can win, confidence that they can beat the Russians. When they met the Russians on anything like equal terms, even on terms of three to one against on a limited field, they found that they could beat those Russians. Unless we can bring that feeling into the army of Western Europe, that army will be no good.

We must also realise that it will not be an easy matter to get that German contribution. A lot of people are saying, "Shall we allow the Germans to do this or shall we not; that is the question?" Believe me, it is not the question. It will be a matter of the utmost difficulty to persuade the Germans to come into the armed defence of Europe, and this has certainly been my experience when I was there. Our anti-militarist policy has been more effective than a lot of hon. Members realise. The Germans are saying, "You have taught us that our fathers, brothers or sons who served in the army of the Fatherland were criminals. When you are asking us to come back and do it again, you are asking quite a lot." Fear of the Russians may be sufficient to bring it about, though it is not an easy matter.

It certainly is not a contribution which we are likely to get unless we can offer the Germans at least equal, and at least equally honourable, terms, and we should also remember that it is essential that we should get that sort of German who has the spirit of an honourable soldier. It is no use just getting the "scallywags." One of the conditions for getting the right sort of German into our defence forces is that we should stop treating the Germans who once served in the army as criminals.

There are at present people like Kesselring, Manstein and other commanders in prison. I saw a newspaper article the other day which was headed. "What sort of a people do they think we are?" It went on to ask if we imagined that they were going to serve as comrades with the men who are now imprisoning their most honoured commanders. We will never get the honourable type of man to serve on these sort of terms. I always regarded war criminal trials as unjust, because I think it is unjust for the victors to sit in judgment upon the vanquished, but in the case of the German military commanders not only were we being unjust, we were being untrue. We were seeking to establish things which were basically untrue.

Our experience of the German Army when we met it—I put the S.S. aside, as they were not in the German Army—was that they fought as decent soldiers. We got a lot of Russian propaganda to the effect that they fought like savages in the East. I examined one campaign in the East in very great detail, and, frankly, my conclusion was that the German Army had shown great discipline and a good deal of restraint in conditions of guerilla warfare of appalling hardship and against a very savage enemy. The trial of Manstein, if it did nothing else, did a very great deal to vindicate the German Army. Manstein identified himself with his army and defended that army, and was acquitted of everything save very trifling charges.

We have got to set those men free if we are to get a contribution from Germany, and I would suggest to the Government that we should hand over those prisoners in Germany to the German Government. After all, if we are to treat the Germans as democrats and as people with whom we want to get along, then it is only reasonable that we should do that. They will not let the Nazis out—do not let us be deluded about that—but they will let out those people whose conviction does not carry moral sanction in Germany. I think it is highly essential that that should be done.

4.32 p.m.

Mr. Nigel Davies (Epping)

I do not propose to be diverted to the same degree as the hon. and learned Member for Northampton (Mr. Paget) or to follow his points in detail, but I do agree with him when he says that part of the present trouble is due to maldistribution and to the effect of the Rent Restriction Acts as they now operate. At the same time, I very much doubt whether it is a problem which the local authorities could tackle. I should have thought they had quite enough on their plate already and that it is a problem to be dealt with by legislation in this House. I believe that by raising rents in certain cases, not, perhaps, in the proportion of the degree of inflation which we have had since the war, but in some lesser proportion, we should ease the situation.

I think we all agree that the main problem which has to be faced in this country today is that of meeting the cost of the re-armament programme which is to be imposed upon us.

Mr. Paget

It is not merely a question of raising rents: that will not do any good at all. What must be done is to manage the re-letting of houses.

Mr. Davies

The hon. and learned Gentleman himself gave an example of one person only occupying a house. I also know of cases where houses are not used to the full—there are one or two with which I am concerned—because the rents are kept at a level which is very low indeed. Legislation could, possibly, provide some tribunal on which local authorities could have a say, but I challenge the capability of local authorities to deal with the problem in toto.

Surely, the problem which we have to face is that of paying for re-armament and dealing with the general world inflation that has been engendered by rearmament in the free world. The Gracious Speech mentioned the sacrifices which must obviously be made. There is, of course, a natural tendency on all sides to express the hope that at least part of the cost can be met out of increased productivity. The problem is how to get that increased productivity. Of course, hon. Members opposite will say, "Since the war we have already achieved a 30 or 40 per cent. rise in productivity. We are doing very nicely, and if we can only continue like that it will be all right." Though we may have done this, I would point out that since before the war the United States and Canada have achieved a 100 per cent. increase in productivity.

Mr. Michael Foot (Plymouth, Devonport)

If the hon. Member consults the last report of the E.C.A. Commission he will see it stated that the increase in productivity in this country since 1946 is greater than that achieved in the United States.

Mr. Davies

I was talking about the increase since before the war; I was taking 1938, which is the standard usually taken in these matters. For instance, since 1938 the United States have doubled their steel production. That being so, there is surely tremendous scope for us to achieve similar increases. It is said that our production is being hampered by war damage to factories, but I cannot find any evidence to support that view. As far as I can remember, we tended before the war to compare our standard of living and production with the Transatlantic countries and not with the European countries as is done today. That seems to be a post-war development under Socialism.

I would point out in passing that the increase which has taken place has been notably in private enterprise and not in the nationalised industries. The increases gained are, to some extent, limited in value by the fact that they exclude transport and some other services. An important point to remember is that whatever rise may have taken place, the present world shortage of raw materials will probably result in the reduction of productivity in certain directions unless we are very careful. For instance, the Ministry of Supply has now reduced supplies of zinc users to 90 per cent. of last year's amount. We cannot pretend that we can make the same number of goods with nine-tenths of the material we had last year. There will also be a number of shortages and bottlenecks in many industries which will make it difficult to maintain the present production, let alone increase it as we must.

I believe that the very last way to deal with the problem, if it can possibly be avoided, is by further controls. My experience is that where the allocation of a raw material depends on the decision, if not the whim, of an official, it makes for a great deal of uncertainty in planning regular production. Although it has its weaknesses, I, frankly, would prefer the use of the price mechanism so that at least the raw materials can be obtained at a price, people can know that they are going to get them and workers will not stand idle simply because a certain raw material runs out.

I wish to make the following suggestions for increasing productivity. First of all, we must foster a greater degree of competition between private industry and nationalised industry. In some ways it is, perhaps, more difficult to do this than it would have been a year ago when a buyers' market was beginning to make itself manifest. But the problem still remains, and it is a fact that the tendency has grown up throughout many years, and has consolidated itself in this country, for trade associations, where no Government price is fixed, to fix their own prices and impose them. That leads to high prices and high costs of production. It is also true, of course, that these costs of production, which are often checked by Government Departments, can be elaborately justified. But as soon as the spur of competition is reduced, as soon as firms are protected from competition, costs will tend to rise, or not fall, as they would under the keen spur of competition. I suggest that one way of getting a higher productivity and lower costs is to pro- hibit the fixing of prices by trade associations, as it is prohibited in some countries.

Another point that I must mention is that it does seem illogical, at a time when all are appealing for higher productivity, that everybody should read in the local newspapers that, in certain cases, trade unionists have been fined by the trade unions for exceeding their quota or for doing more than they were supposed to do. Surely something can be done about that. The next point concerns incentives, about which it is easy to generalise but not so easy to talk in detail. Much has been said about incentives for workers in the building and other industries. We certainly need more, and where they have been introduced they have been successful.

I should like to say something about incentives for higher grades, particularly for the highest salaried grades, because it is no use pretending that developments in industry, the formation of new industries, and the difference between industries in one country and another do not depend as much as anything on the few leading brains. I do not believe they do it entirely for money, but, no doubt, here again money is a great, if not a main, spur, and present incentives are just not adequate to induce people of the widest capacity to go into or to stay in industry in this country.

I do not wish to anticipate the Chancellor's next Budget, but I suggest that it is necessary that a radical step should be taken. I would go so far as to say that we should halve the Surtax on earned income, or something of that nature. If we must have nationalised boards surely it would pay the country, in order to get the best men at the top, to pay them a net income of two or three times what they are getting at the moment. I am aware that among hon. Members opposite and the Trades Union Congress there has been a lot of quibbling about that, but I do not see how they can deny that if we want the best men we must pay for them.

Mr. Ivor Owen Thomas (The Wrekin)

Is it not a fact that the general position taken up by hon. Members opposite and by their party, with regard to the payment of members of the boards of nationalised industries, is that they are being paid too much already?

Mr. Davies

I was certainly not aware of that. I am far more aware of the criticism that the nationalised industries are working at a loss. We pay men more in private industry.

To get higher productivity and cheaper production we must push forward with creating and integrating a European market. Together with the Commonwealth countries, which I am sure will join in with us, and with which we are closely linked by trade, we should try to create a market of the size and on the scale of that of the United States. Thereby, we should have a production line of the same size, which would make a big difference, particularly in things such as automobiles. I know great progress has been made in cutting down the quota system. I believe much has now to be done in respect of tariffs to create that very market. At the same time we should be helping the political integration of Europe.

The last point I wish to make in this respect is partly political. It affects production but I think that many hon. Members on both sides will disagree with it. I believe that, in the circumstances, both to protect the security of our country and to get maximum production, we should ban the Communist Party. After all, they are saboteurs of production who have been very successful in certain cases. We are having a cold war which breaks out in certain areas into a shooting war. They are enemies in this way, and we should be entitled to treat leading and active Communists as enemies. We should be entitled to find out what they know and then, by all means, let them work.

I know it is argued that if we ban the Communists, as our Commonwealth friends in Australia and South Africa have done, we shall drive them underground. But surely where are they if they are not underground at the moment? Where were Dr. Fuchs and Mr. Pontecorvo if they were not underground? Surely, if we went to it, we could find out from Communists a bit more about other Communists, and uncover the whole iceberg, of which only a small portion shows at the moment. If we were to do this, and thereby remove certain subversive elements, about which one notable trade union leader in particular has complained, it would be easier to hope for a greater degree of cohesion and fewer unofficial strikes. I fail to see where collective bargaining leads if we get contracts which employers are bound to keep but which can be evaded against the advice of trade union leaders. If Communist influence is eliminated, surely the unions, just as the employers, should be liable for the carrying out of a contract.

However much we may increase production, and whatever methods we may employ, there will be a gap if we are to pay for rearmament. The old remedy of every Socialist Chancellor, of course, is to increase taxation. Not only will that be disastrous for production, by the diminution of incentives, but it does not seem that, nowadays, it has a corresponding effect in reducing inflation. If taxation is increased to a fantastic level, people will save less and will cash their savings to meet taxation and, thereby, we shall not secure the same degree of disinflation.

To meet the problem it is necessary to indulge in economy now, because inflation has already started on an appreciable rise again. It has been continuous, the curve has shot up, and we need to do things now if we are to avoid not merely gradual but runaway inflation with disastrous effects upon every home in the country. To meet unexpected emergency, and if we are to pay for rearmament, I believe there may be ways in which the wings of the Welfare State will have to be clipped back. There are things we just cannot afford.

First of all, surely, the food subsidies can be cut. The Socialists have cut them down already. If we are to pay for the arms to prevent another war, we cannot realistically pretend we can go on paying £400 million a year to keep food prices at some level theoretically related to what they were before the last war. Again, when the Health Services were laid before Parliament, it was originally estimated that they would cost a net £150 million. They are now running at £400 million. I frankly question whether that is an expenditure, however desirable, which can be borne in the circumstances, given this new burden of rearmament. I should have thought that the Minister of Health could be more than content if he were to spend twice the sum originally budgeted for, that is to say if it were £300 million and not £400 million.

We know that the wage freeze has ceased to be a reality. I think it should be frankly admitted that wages are bound to rise.

Mr. Foot

And salaries.

Mr. Davies

And salaries, of course. Provided we get the productivity, I do not believe that increased wages will do any harm, and I do not believe they have ever done any harm. The only people who need protection, as has been said many times, are those with small fixed incomes, such as old age pensioners for whom special provision is needed. Those are a few points relating to increased productivity and reduced expenditure, which are the only two methods by which we can face the situation realistically.

I have one further point to make on a slightly different subject. We all know that however great our own efforts and sacrifices, we cannot alone contribute enough to stem the tide of aggression. Surely our greatest contribution to the solution of the problem is the example which we set, the sacrifice we make and the influence which we exercise. By our sacrifice we can influence the countries of Europe to act likewise. Our influence, which is or should be pivotal between the United States on the one hand and Europe on the other, should be the chief influence in achieving that greater degree of unity which is necessary to peace.

The German Chancellor said a few days ago that Russia—and Communism—can only be stopped if it is faced with what is virtually one Power. I am sure that is true. It is the only way by which we can provide for an effective and secure German contribution to the defence of the West. Why should we leave it to France to produce a sudden and striking initiative? Why should we leave it to the United States to prod and urge? Has not the time come for a greater initiative from this country? I believe that in the long run, whatever may be the temporary expedient, the world can only be saved from further wars and civilisation from absolute extinction, if we go further than the present alliances and pacts and have virtually one government which goes even further than the United Nations organisation.

If we are not willing, as it appears that we are not at the moment, to go all out in integrating Europe, apart from a few measures of a limited nature, surely we should propose something else. We should form a lasting and permanent association between our Commonwealth and the United States, one of the express purposes of which would be to further a similar integration in Europe. We should propose a formal association, and formal organs would be set up to ensure not merely co-ordinated but united defences and a united single foreign policy. Some degree of economic integration should follow, but that would take much longer to work out.

If two such groups could be formed—on the one hand, let us say, the Anglo-Saxons or the British Commonwealth and the United States, and Europe on the other hand—which would be closely connected within the framework of the Atlantic Pact, then, surely, before long they could join together and form what would be the basis of one world government. Only such a government transcending all the present pacts and associations which have been formed to meet the present emergency, can save us in the long run from war and disaster.

4.55 p.m.

Mr. Keenan (Liverpool, Kirkdale)

I do not want to follow in much detail the hon. Member for Epping (Mr. Nigel Davies). He made one or two observations on which I should like to comment before I allude to a few matters on which I feel very strongly. The hon. Member referred to rearmament. I am pleased to see the Minister of Supply here. I suggest to him that any contracts which may be given by this Government either now or in time of war, if there should unfortunately be such a time, should not be given on the "cost-plus" basis. That system permitted contractors in private enterprise to rob this country in the last two wars. I hope my right hon. Friend will take note of that remark.

On the question of food subsidies, the hon. Member for Epping referred to the old age pensioners. Might I remind him that they would be the hardest hit in the community if food subsidies were removed?

Mr. Nigel Davies

The hon. Member obviously did not understand that I particularly said that those were the sort of people—for the sake of brevity I omitted other categories—for whom special pro- vision should be made. Among those special provisions should be an increase in the old age pension to enable those people to meet such a situations.

Mr. Keenan

The fact remains that what the hon. Member really wants is to lower the high taxation now imposed on his friends who are reasonably well oft, with good salaries and incomes. He wants to abolish food subsidies so that the taxation on his friends may be eased. It is about time the Opposition realised that the basis of taxation since 1945 has been, generally speaking, a levelling-up process of taking the money from those who already have too much and providing social services and so on, for those who are short of money.

I do not want to do what my hon. and learned Friend the Member for Northampton (Mr. Paget) did, namely, to speak too long on something on which he said he did not rise to speak. I think he has stolen a lot of the thunder of myself and others. My hon. and learned Friend made a very reasoned and seasoned contribution, with which I did not wholly agree, but he asked the Opposition how they intended to provide the additional 50 per cent., or 100,000 houses, more than the number laid down in the Government's capital expenditure programme.

I should like to comment on one thing that my hon. and learned Friend said. We are now experiencing a difficulty the like of which has not been experienced during the last two generations at least. When I was a boy and a young man, in the Liverpool area, there were thousands of houses of the four-roomed type at 5s. a week, and the workers at the docks, in the factories and the ship-repairing yards could not afford the rents of those houses. Even in those days they lived two and three families in a four-roomed house because they did not have the courage which people have today, or they would not have tolerated such a situation. They would have gone into the houses, whether they could pay for them or not.

I knew of cases of three, four or five people living in a room with only a small grate which could hardly burn coal in it at all. They had to do that because they could not afford the rents. There were plenty of houses to let. After the First World War, as we know, the position altered, and it is true that before 1938 we were building well over 300,000 houses a year. Most of the workers could not buy them, however, although that was the only way in which some of them could obtain a house.

Be that as it may, this question of housing will obviously receive a lot of attention from politicians. Quite naturally, the Opposition are cashing in on what they believe to be a good point, knowing how it affects so many people. Let us be quite frank about it. Even some of my right hon. Friends on the Government Front Bench, and certainly some right hon. Gentlemen on the Front Bench opposite, do not understand that the housing problem affects nearly every family in the country. If it is not a question of somebody living in one or two rooms and wanting a house, then it is a question of people living with relatives who do not want them because there is no room for them all. Thus housing affects, directly or indirectly, nearly every family in the industrial areas, and that is attractive to politicians.

Mr. Osborne

The rural areas, too.

Mr. Keenan

I am speaking of what I know best and I would not attempt to speak on behalf of the rural areas, unlike the hon. Member for Louth (Mr. Osborne), who often speaks on things about which he obviously knows little or nothing. It is suggested by the Opposition that, if they get the opportunity, the housing target will be 300,000. They might just as well have said 600,000. Like the hon. and learned Member for Northampton, I ask hon. Members opposite what they are going to do to reach this figure. Do they intend to stop all other building? Personally, I am prepared to do that. I have said this before, earlier this year in the old Chamber, and I will repeat it now: if I had my way I would stop all building of any kind, except housing, for two years.

Mr. James Hudson (Ealing, North)

And "pubs"?

Mr. Keenan

Yes, "pubs." too. What is the good of having fine schools or even fine hospitals if there is no home in which the children can rest'? For that reason I have said, and I repeat, that I believe in bedrooms before schoolrooms or before great stores like those we have in Liverpool—Lewis's Stores. I know the Ministry of Works may 0be blamed for what has happened there, but the fact is that it is costing £1,250,000. That amount of money would provide many houses in Liverpool.

My hon. and learned Friend the Member for Northampton said that building trade labour could not be transferred to other branches of the trade. He said they were confined to certain branches of the building trade. That may be true of civil engineering on certain large constructions, but it is certainly a fact that not all building trade workers who are capable of house-building are engaged on house-building. Many are engaged on repairs. If we went to the warehousing sites in my own city, where warehouses are being rebuilt, we should find plenty of labour. I do not know whether they are working on another dance hall or not, but they worked on one recently and, of course, there is also the question of Lewis's. I am told by private builders in the North, many of whom I know, that they have difficulty in keeping their bricklayers because the men are attracted to the more remunerative forms of building in which they receive, perhaps, a couple of coppers an hour over the odds or an incentive bonus. Complaints have been made about that.

I think we must have second thoughts on this question. I do not expect that the Government will agree to stop all building except house-building, but certainly there are many things that could be stopped and the resources and the men diverted towards increasing the housing programme. I am satisfied that, unless we change in the way I have suggested, we cannot deal with the housing problem. I would prefer to stop all other building except housing. As has been said over and over again in this Debate, and on many other occasions, lack of housing has a demoralising effect. The children cannot be looked after because they have to be chased out into the street and they get into trouble. For all those reasons, I believe we have seriously to get down to the question of building more houses and fewer other buildings.

There is another subject I should like to raise with the President of the Board of Trade. It has been suggested that devaluation is the cause of the increase in prices which has been taking place for some time. That is not altogether true. One of the things about which I have wanted to complain for a long time is the cost of clothing. Men are fortunate; we can all get a utility suit for about £11 or £12 if we do not want to go to Saville Row or some place like that, and we can get utility footwear.

But consider the position of the average family—the average father and mother. What do they have to pay for footwear for their children? For children of about 18 months, they have been paying about £1 for a pair of shoes. For children of two or three or four years, they have been paying 30s. or more. If they wanted a coat for a little child of four or five, a raincoat or a gabardine coat or something of that kind, it cost them £4, £5 or £6—nearly a week's wages for men in the lower-paid grades. I suggest that the Board of Trade must do something about this, because all prices will have a tendency to increase as a result of the international position with regard to cotton and wool. That is inevitable. The fact remains that the profit margins in the past have been far too great. I believe that that should be taken into consideration.

Mr. Osborne

The hon. Member said earlier that I often talked about things I did not understand. May I tell him that I have been associated with the manufacturing of the clothes to which he refers? Wool yarn, which before the war cost 2s. 9d. and before devaluation cost 10s., today costs 20s., and the manufacturers can do nothing about that—and I do not think the President of the Board of Trade can, either. Until world prices fall, it will be utterly impossible to prevent the cost of clothing from rising still further.

Mr. Keenan

I had an idea of where the hon. Gentleman's business interests lay and at once I admit that he will be able to speak competently on this subject. Whether he tells the whole story or not is another matter. I was speaking about this only a few days ago to somebody who knew something of the boot and shoe industry, and I complained, as I am complaining now, that 34s. had to be paid for a pair of shoes for a certain child I know. I got to know what they cost to make. Even allowing for a margin for distribution, they would have cost 18s., and yet they were sold for 34s.

One has only to consider the ridiculous prices being asked for women's clothing. That was certainly the position 12 months or so ago. I do not know whether it has eased up or not. Utility clothing was available only in what I think are called the middle sizes. Anyhow, the fact remains that quite a number of outsizes amongst my constituents—bonny girls and bonny women—naturally wanted to know why something was not done about utility clothes of their size. Probably the noble Lady the Member for Aberdeen, South (Lady Tweedsmuir), will know something about it. She is the only lady Member I see knocking about here.

The fact is that any person who is reasonably slim can buy a utility garment, and get a reasonably good dress at about £3 or £4 or £5. [An HON. MEMBER: "Less than that."] Less than that. I do not want to exaggerate the point, but take somebody, if I may say so. of the size of one or two of our lady Members on this side of the House—that kind of customer—[Laughter.] If such a lady went to a shop to buy a dress, she would be a customer. I do not know what everyone is laughing at. The fact is that if she went for an article of clothing, she would be called upon to pay something like £8, £9, or £10. or more. That was wrong. It is still wrong. It is to that point that particular attention ought to be given. Mention is made in the Gracious Speech of the control of prices, and I think it is time we got some rigid application of control of prices.

I have talked now for about the average length of time hon. Members are taking in this Debate, and which they are expected to take, and I want to give everybody else a chance to get in, and so I shall conclude. I finish, as I started, on the question of housing. Whether both parties take advantage of the position or not, I think that it is the most serious social problem with which we are faced. Everyone who has had local government experience knows how serious housing problems can be. I had a good deal of local government experience and guardian experience long before the war and for about 25 years before I came to the House of Commons. I know the difficulties caused by unsatisfactory housing conditions. Things are much worse today.

I think that if we could by any means at all, switch over to a concentration of effort on building houses and homes for the people, it would be well worth while. It certainly would be worth while to defer taking raw materials for building "flash" clubs, cinemas, big stores, and so on which could be used for building homes for the people and to defer also so using up the labour force that should be devoted to making homes for the people.

5.14 p.m.

Captain Duncan (South Angus)

It is obvious, I think, that the decision arrived at by the English Conservative conference has got well under the skins of hon. Gentlemen opposite. We had a very long speech from the hon. and learned Gentleman the Member for Northampton (Mr. Paget), and now we have had a speech by the hon. Gentleman the Member for Kirkdale (Mr. Keenan), both of whom started and ended on the subject of housing. Both asked this question: As we say we can erect 300,000 houses a year, how are we going to do it? I would say to both that the answer will be given on Monday when the experts will be debating this matter on an Amendment which, as I gather, and as I certainly hope, is being brought forward, and will be discussed in detail.

I would only add, on this question of housing, that the problem is just as great in Scotland as it is in England if not greater and we are quite prepared to take common action on the lines suggested by the hon. Gentleman who has just spoken in order to see that this problem is really dealt with. It is certainly a problem in my constituency, at any rate. The waiting lists are just as long as they ever were, and the cost of building houses is such that they cannot be let to the people to whom they are intended to be let.

In a debate like this it is possible for an hon. Member who is called, to survey any aspect of His Majesty's Government's policy or any matter affecting his constituents. In my case it would be possible for me to discuss agriculture, housing, or industry, or the effect on industry of the rearmament programme. Hon. Friends of mine will be doing that during the next three or four days, and I intervene today to deal only with one specific point that is not a constituency point at all but which does affect a considerable number of people in the world today.

I wish to raise the question of refugees. I do so for three reasons. First, because the Lord President of the Council made a broadcast the other day—a deplorable broadcast, in my opinion—in which he said that the Labour Party were interested in people. The implication was that we on this side of the House were not: that we were interested only in profits. I raise this partly to answer that accusation made by the Lord President's broadcast. We are interested in people just as much as anybody. The people of whom I specially wish to speak, although foreigners, are human people as much as anybody else and they are suffering today. The second reason is the facts of the case which I shall shortly—and very shortly—give. The third is that, although certain Questions were asked of the Foreign Secretary as recently as 18th October, he was unable to give any satisfactory answers to them, and ended by saying, when speaking of this Question: I will look into it again."—[OFFICIAL REPORT, 18th October, 1950; Vol. 478, c. 2020.] I am glad that the Under-Secretary of State for Foreign Affairs is here and is, I gather, to reply to the debate, because there has been time for his right hon. Friend to look into the question of the refugees again.

The first point I want to make is the number of refugees in the world today. The Foreign Secretary, in answer to me, said that there were roughly 238,000 of whom 200,000 could be settled; but in the advanced statistical report of the International Refugee Organisation the figure is different. It is dated the end of August, and the figure is 304,938. I should like the Government to attempt to reconcile those two figures and to give us their best estimate of what are the real figures.

Next, I should like to deal with the status of the refugee. This is a somewhat technical matter, because before 1945 a displaced person was officially called a refugee if he was able to prove that he was a refugee from Nazi persecution. At the end of the war, in 1945, obviously that description could no longer apply, but the definition has never changed, and although, unofficially, the I.R.O. has been accepting people from behind the Iron Curtain as refugees, they cannot be so described officially, because they are not refugees from Nazi persecution.

The people who are coming from behind the Iron Curtain, and who have been coming since 1945, are refugees from Communist persecution, but the definition has never been changed, and I am informed that it is extremely difficult for anybody who gets away from behind the Iron Curtain to obtain the official designation. It is important that the definition should be changed, if possible, at the General Assembly of the United Nations which is to discuss the matter this month. I should like to know how many extra people would be included in the total number of refugees if the definition were changed.

Next is the question of classification. Although at the end of August there was a total of 304,938, the classification is as follows: those desiring repatriation, about 2,000; those deemed presentable for resettlement, 212,488; those with limited opportunities for resettlement, 60,774; those requiring continuing institutional care, 16,236, and 18,000 odd unclassified. From the right hon. Gentleman's answer to my Question on 18th October it would seem that the 212,000 suitable for resettlement ought to be resettled before the I.R.O. is wound up. But there remains the hard core which seems to consist of the 60,000 with limited opportunities for resettlement plus those requiring continuing institutional care—that is, the old, the sick and those who cannot be resettled for various and different reasons. I therefore ask what the Government are doing, or will do after the International Refugee Organisation is wound up, with the hard core of those who are already admitted as refugees.

What is to be the future of the International Refugee Organisation? This organisation was set up by the United Nations and has done magnificent work. It has resettled well over a million people who were officially described as refugees from Nazi or Communist persecution. Of those, 806,000 have been resettled in countries overseas—countries of all kinds and in all continents, mainly in the United States and Australia, although many other countries have accepted and resettled them. I wish to pay tribute to the great work that the organisation has, done. This organisation, originally scheduled to close down on 30th June, 1949, is now, I understand, due to close on 31st March of next year—although there is this large accumulation of refugees still to be dealt with—and a High Commissioner is to take over.

There is a rumour which I have heard from more than one source that that statement is not accurate, that a change has taken place, that a new decision has been made, and that the I.R.O. will be continued, at any rate for another year, until December, 1951. I should like to know from the Under-Secretary whether that rumour is accurate, because if it is, it will make an enormous difference to the whole refugee situation. The date-line from which a person could be considered as a refugee is rumoured to be now 1st October, 1950, instead of 31st December, 1949, which means that an extra number of people may now be considered officially as refugees, is that new dateline accurate, or is the old date still operating?

After the I.R.O. is wound up, what are to be the powers of the new High Commissioner for Refugees? Are they simply to be protective and legal, or do they include continuing resettlement? It seems to me that purely legal and protective powers are not enough to deal with the size of the problem, and I do not believe that a High Commissioner alone would have the staff or the organisation to deal with this problem, which is still continuing. The Government will have the opportunity of making their policy known, if not now at any rate at the General Assembly, and I suggest that they should press for some form of continuing organisation, not necessarily as elaborate as the I.R.O. but at any rate with greater powers than are proposed under the suggestion for a High Commissioner.

The I.R.O. has acted under the Economic and Social Council of the United Nations, and I hold in my hand an annotated provisional agenda of the General Assembly for the Fifth Session, which is now going on. Resolution 32 deals with the status and the legal definition of a refugee. I do not propose to read it out, because no doubt the Under-Secretary has that agenda with him, but it does define a refugee, and it will help in solving the refugee problem if this resolution, which was carried by 10 votes to two in the Economic and Social Council, becomes a decision of the General Assembly. My question is: What is the attitude of His Majesty's Government to resolution 32 of the Economic and Social Council; and will they support it at the General Assembly when it reaches there this month?

In this connection, I should like to read a few words from the last report that I have of the Economic and Social Council, dated May, 1950, to prove not only that the International Refugee Organisation has done great work in the past, but, also, that there is a great deal more to be done. It says: During the period January 1st, 1950, to the 31st March, 1951, the Organisation will have to accomplish a task of considerable magnitude and complexity. The prospects of the period were brightened at the time of writing this report by the likelihood of the impending legislation now in its final stages before the United States Congress which will permit the admission of large numbers of refugees and displaced persons within the mandate of their Organisation. I think that I am right in saying that the Bill has now gone through and will help to speed up the admission of refugees into the United States.

However, in the months to come, operations will have to be conducted at high speed in terms of the actual moving of people and the handling of cases, particularly the handling of difficult cases. The individual basis will have to be intensified. At the same time, it will be necessary to reduce the staff to the gradual run-down of the organisation in order to live within the resources available. I ask the hon. Gentleman what we are doing in this country on a voluntary and individual basis to deal with the difficult cases.

What voluntary societies have been approached in this country to help to take some of the difficult cases? What churches have been approached, and what other approach has been made to deal with these extremely hard and difficult cases which seem to me to be the most difficult of all the problems which have to be dealt with? I recognise that the Government are hard pressed financially, economically, and in many other ways, and has special security problems which must not be neglected. It is traditional British policy to be liberal and humanitarian in dealing with foreigners who are sufferers from oppression of any kind. On the grounds of humanity, I raise this question tonight.

5.33 p.m.

Mr. Turner-Samuels (Gloucester)

Listening to the speeches this afternoon, I could not help but feel that the new House seems to have refreshed both the spirit and the imagination. Certainly, the hon. and learned Member for Northampton (Mr. Paget) was in very good form indeed. I personally must make it clear that I do not accept for a moment some of his housing politics. He apparently thought that the intervention of the local authorities might be an excellent device in dealing with the management of all houses. I must confess to some doubt in my own mind as to the way that some of the local authorities are managing their own houses, never mind adding any more to them.

When added to that is the element of rent, I think that what is occurring in relation to local authorities leaves some things very much to be desired. Why, for instance, there is no restrictive legislation in regard to the rent of local authority houses has always been a matter of some curiosity to me. I know, of course, that it has been said that when we confine things to the hands of a body such as a local authority there is no need to take precautions which must be taken with a private individual. That sounds to me very unfair and very doubtful as well.

I cannot see why a local authority should be left completely untrammelled to charge any rent it likes and, in many cases, rents which are higher than for property privately owned in the same neighbourhood. I am at a loss to see how it can be justified. Much less than doing what the hon. and learned Member proposes—getting rid of rent restriction altogether—I should have thought that the desideratum was that we should extend and tighten rent restriction further. In any case, I think that the local authorities have their hands full enough without transferring any other obligations in this respect to them.

I would go further and say that all rents should be restricted and controlled whatever the amount. There is a considerable exploitation at the present moment in this field. Whether it is in London or in the country, rents which have been allowed to get outside the grip of the rent restriction legislation have been raised and, in some cases, exces- sively raised beyond what they could possibly be if there were rent restriction. This cannot always be corrected by tribunals. It is not everyone who is prepared to go to a tribunal in a matter of that kind. People are either too timid or have other difficulties and reservations in regard to that matter, and in consequence are not being justly dealt with.

May I refer to what I think has been the effect of the new House on the imagination, which, I think, was very actively at work in the case of the hon. Member for Epping (Mr. Nigel Davies). It is an amazing thing how one sits in this House and observes the capacity of the other side for self-delusion. When we hear someone on the other side getting up and saying that competition should not be done away with, we are not only dis. armed, so far as any argument is concerned, but we are completely silenced. The curious fact about it is that while one hears this about competition from the other side, no one can discover any evidence anywhere that that tenet has been followed or observed at any time by the party opposite.

The hon. Gentleman said that we should prohibit price-fixing. Would he like to tell that to the Federation of British Industries? I wonder how, while deploring and proposing to get rid of price restrictions, he explains why, under continuous years of Tory régimes, this very system of price-fixing was allowed to grow up, continue and to get so strong. Incidentally, the F.B.I. is, of course, one of the chief Tory political fund-builders: It would, accordingly, be very interesting to see the Opposition approach that body with the proposal that was adumbrated by the hon. Member for Epping. In any case, we have a clear piece of evidence as to how the F.B.I. would react to that suggestion. Not so long ago, there was the Lloyd Jacob Report on Resale Price Maintenance, and a recommendation was embodied in it that the Government should invite consultations with trades and businesses. It may surprise the naive right hon. Gentleman to hear that when the matter was put to the F.B.I., it met with a very cold reception indeed.

Everyone knows that one of the main factors in the rising cost of living is price-control, and it is upon that topic, and housing, that I intend to address the observations I wish to make on the Gracious Speech. There is no doubt that price-fixing, which, as I have said, flourished under Tory régimes, gradually destroyed competition. I do not think anyone will gainsay that proposition for one moment. Not only that, but in many cases it even prevented entry into a trade. Another problem was that it produced excessive profits. The fact to note, and it is a fact that the electors and the country generally will note, is that with every move and on every occasion it was the consumer who had to pay, and still does.

The Linlithgow Report of 1922 raised this very question of resale price maintenance and the high cost of distribution. What did the Tories do that year, and in all the years that followed when they were in office and in power? The answer is that they wasted each one of those years. The Government must not, of course, seek to use that as a screen for not acting in the matter. I say to the Government Front Bench that the Government have a very vital duty in this matter. We have, as the House knows—it was passed during the last Parliament—the Monopolies and Restrictive Practices (Inquiry and Control) Act, 1948, and it is only fair to say that that Act was passed with the consent of the three parties. That is an Act which has to be administered by the Board of Trade. I notice that the President of the Board of Trade made a speech at the begining of the week to some London housewives, and any reference to that Act was conspicuous by its absence.

The effect of not properly operating that Act is the cause of many of the pressures that are weighing heavily on the housewife's purse. I ask the Government whether they have taken any new steps to implement that Statute. I know, of course, as does the House, that a commission was appointed under it, but it is no use pretending that it was anything more than an appointment, because the Commission has done little or nothing. I do not need to be told that six industries have been inquired into, but the extent of the inquiry and the results have been practically nil. I want to know from the Government, because I think that the Government have a duty in this respect to make it clear, whether the machinery which has been created under that Act is adequate? I save said that six firms have been inquired into, but there are a large number and range of firms, businesses and industries that have to be investigated in connection with this vital question of the cost of living.

The Government gave an explicit warning in March last, but a warning is no good unless some regard is paid to it. I remind the Government of this, because they stated that something would be done by the middle of this year, and already it is past that time and nothing has been done. The warning was given to the trade protection associations that unless they gave full co-operation to put right the glaring abuses that existed, the Government would take appropriate action. Have the Government taken appropriate action? If so, I should like to know what it is.

I am sure it will 'be agreed on both sides that there have been rapid rises in prices ever since 1945. Clothing, for instance, and household goods have risen somewhere in the region of more than 24 per cent. Food has risen by at least 32 per cent. That is bad enough, but what is still more disturbing is that prices are rising every day. Any housewife can tell us that there is a rise in price of some article every day of the week. Unfortunately—I am sure everyone must be perturbed about this—the Gracious Speech is not explicit, either on the cost of living or on housing. I should be no friend of the Government if I did not say that the test of the Gracious Speech will be the bringing down of the cost of living and putting up the number of houses built.

I should like to transfer my attention for a moment to the question of housing. The Gracious Speech makes an allusion—a very short one, a general one, which is perhaps unavoidable in a document of this character—to leasehold reform and to the continuance of ground leases, as well as to the question of tenancies of business premises in order to prevent hardship. These are all properties that are in existence. I should like to ask the Government, what about the houses that are not in existence? [Laughter.] I do not think the Opposition have anything to smile about over this question. Their record on housing is not too good. There is this talk about the hardship of these cases of existing properties. What about the family hardship and disruption that is going on because of the lack of houses? It is perfectly true, and I am only too ready not only to accept it but to applaud it that in the last five years the Government have done a great job on housing. Surely no one can deny that. The question in which I am interested, and in which it is the duty of every hon. Member of this House to be interested, is, Can more be done? The fact is that more must be done.

I do not think there is a single Member of this House whose mailbag each day does not bring him several letters revealing the hardships and distress that have been caused to people and families who are without a home. In Gloucester, as in so many other places, we have a huge waiting list. There are two to three thousand people on the list, but of course that does not represent the total number of human beings affected because if one adds their families to that number it means that thousands of people are without a house. The cruelty of the position is that these families often have to be separated, and when they are not separated they are only too frequently living under pitiful conditions.

However well the Government may have done, that fact is there, and it has to he attacked and conquered. I am not satisfied that there is an all-out effort. No one has been a more loyal member of this party for 30 years than I have, but I like to be frank, and I say to the Government that they cannot afford to be complacent on this crucial and vital matter in the life of the nation. I might be asked what the Government can do. One thing they can do is to ginger up the local authorities. There are local authorities who are habitually not building and completing their allocations. Let there be no doubt about that. Everyone who knows anything about housing knows that the allocations made by the Ministry of Health are less than the capacity of the councils rather than more. Nevertheless, they are not finishing their allocations. I know of a case where the 1948 allocations are still not completed. [HON. MEMBERS: "Where?"] I will tell hon. Members—in my own constituency.

Private enterprise is absolutely to blame for the position. [Laughter.] Hon. Members opposite may laugh, but it is no laughing matter to people who are suffering as a result. The duty imposed upon the local authority is to provide the houses. The duty of private enterprise is to build the houses, and it is not doing it. The master builders are themselves openly saying—it was said by the president of some master builders' association not long ago in Cheltenham, they cannot deny it—that they have not got enough incentive. I should like to know what incentive they want. Do they want higher prices? Prices at the moment are surely high enough, and those prices affect the cost of living because they translate themselves into the form of rents, which are far higher than they ought to be. In the case even of prefabricated houses, prices are incredibly high, and this affects rents considerably. In order to get an economic rent to cover the high cost—some prefabricated houses are costing no less than. £2,500, which seems absolutely unbelievable—a rent of at least 35s. a week would have to be charged. That would be a monstrous impost to put upon the ordinary working man particularly the lower paid wage earner.

Traditional houses are not going up at the rate they should. Is anyone on either side of this House satisfied with the rate of production of such houses? Whose fault is it? Whoever is at fault, it is perfectly clear that it is the Government's duty to act. Local manpower is not going to local house-building. To take as an example my own constituency, in Gloucester the proportion of manpower on the sites to the manpower in the city is egregiously small. The men are being used, but not to build houses in Gloucester. This has gone on for years. If the building industry will not do the job under present arrangements, the Government should see that we get direct labour or some other method of putting up the houses. It is perfectly clear that no Tory-dominated council will ever adopt direct labour.

Of course the housing shortage is naturally a godsend to the Tory Party. Their 300,000 a year myth is good propaganda, although it has not even any solid basis to it. The strange thing is that this rate of construction was achieved only once in all the years under Tory Governments. The only year when there was an output of 300,000 houses was in 1938–39, and there the private builder erected and got two-thirds of them for sale. If the Tory case is that the building industry can do the job, then I ask why are they not doing it.

Why should the building trade hold the country to ransom? I say to the Government, why should the builders be allowed to hold the country to ransom? However well the Government have done in the matter of housing, they must do better, not by meaningless numerals on paper, but by manpower on the housing sites and by houses actually produced. The Minister of Health himself referred to direct labour at the recent Labour Conference. I would like to see him bring it to much more practical fruition at his Ministry, and in that way we might get more houses and so help to remove one of the most serious pressures on the cost of living.

6.1 p.m.

Lady Tweedsmuir (Aberdeen, South)

About 25 minutes ago the hon. and learned Member for Gloucester (Mr. Turner-Samuels) said that he had been silenced by my hon. Friend the Member for Epping (Mr. Nigel Davies). I can only conclude with surprise that he also has caught that atmosphere of the new House which he described as profoundly affecting the imagination. The remarks which he has made on housing show that effect very clearly. The tenor of most of the speeches of hon. Members opposite has been to defend the housing record and policy of His Majesty's Government. One cannot help feeling that "qui s'excuse s'accuse."

I should like to make reference to the engaging speech of the hon. Member for Kirkdale (Mr. Keenan), because he mentioned the lady Members of this House. He discussed the possibilities or the impossibilities of clothing the lady Members of this House. His imagination ran wide. He gave us a contribution in regard to the prices of clothes, as well as to sizes and the shapes. I can only say that it will give me the greatest pleasure to take his remarks down to the lady Members' room, where we may be able to discuss them at leisure.

I want to say something in relation to foreign affairs, because I understood that that was to be the main subject of this Debate. It is always said that there should be continuity in foreign policy, and therefore perhaps we can all discuss together some of the very serious problems which confront us and can try, in the atmosphere of this new House, to follow an unswerving line between partiality on the one hand and impartiality on the other.

First, I would make particular reference to Germany, a country which has always been of deep interest to me and which presents us with very great problems at this time. I was very sorry that in the Gracious Speech there was no specific reference to Germany. At the opening of this new Session this House should have been given a considered statement by the Foreign Secretary or the Under-Secretary of State for Foreign Affairs as to the position to date. We cannot help feeling that His Majesty's Government are not showing that strong leadership which this era demands. I hope very much that that is not the case. It is in such a Debate as this that we shall give the Government a chance to refute or amplify the feeling which is prevalent throughout the country.

There is in the public mind very great confusion about the Germans. Some people are still prejudiced against them. There must be few families in this country who have not suffered at Germany's hands. Nevertheless, all thinking people realise that this country and Europe need Germany. A nation of 80 million people that has produced such outstanding personalities as Goethe and Pastor Niemoller will always be a significant race. Because of her geographical position, wars always have been, and always will be, fought in and around her own country.

If we are agreed that we need Germany, we should agree that we need her now. Should there be another world conflagration, the free world will win it again, but how much harder the task will be than if Germany were our ally. There are some who say that Germany might remain neutral. How can that be in the terrible circumstances of modern war, with its widespread devastation and degradation? There always will be some section or faction in Germany which will travel with the victorious warrior. We cannot afford to ignore any sphere where potential power resides. I believe that it is still true that he who is not with us is against us.

If we are agreed on this major theme, we cannot help regretting that we have not seen more definite results. Can it be that His Majesty's Government are doing the right thing but in the wrong way? Every day when we pick up a newspaper we read about dissension, sometimes between France and ourselves, sometimes in Germany, as to the part that Germany should play. I believe that Germany should have a force to help in the defence of Europe, but it should be part of the European Army. The logic of events has forced the Government to take certain action: we cannot occupy Germany for ever and we must therefore give her more control over her own affairs. That knowledge brings us to the stage where we must make great decisions on production and defence. The natural result of all this is that we see a resurgence of an ever-more-powerful Germany. looking once more for a motive force, what we might call a star to follow, which is much needed by her 80 million people.

Reference was made by the hon. and learned Member for Northampton (Mr. Paget) to the idea that if Germany were to come in with us, it must be because of a moral impulse. I would suggest that Germany will not just become a willing partner with the free West because of her native love of democracy. We make a very great mistake if we think that democracy is catching. Democracy depends on tolerance of mind and a certain attitude of thought, and they are not achieved all at once by a nation with Germany's history. Consider the climate of thought in Germany today: constant hard work, increasing production—much stimulated by Nature's profit motive—has made it possible for Germany to begin to improve her standard of living.

It is said that Communism is on the wane and, equally, that there is a revival of religious thought. One must ask oneself whether those tendencies will last. What about the German youth who are now getting to the stage of manhood where they will have more and more to take vital decisions about Germany's future—that youth which has been trained under the Nazi régime, which demanded of them, and got, selfless and ruthless devotion to a cause in which the end always justified the means? One must ask: "Will the youth be content with what they have today?" Would it be so very surprising if they went in search once more for the ideal of the united German race, a concept that has been with them through so many fateful years?

We have examples of this already. Hon. Members will know of the so-called Brotherhood movement in Germany. I shall not go into that subject in detail, but I will just commend to hon. Members the study of the organisation and character of the Brotherhood movement in Germany today. If there is one such organisation, we may be sure that there are others. The movement is efficiently run by ex-army officers, members of that officer caste which in a military nation it is most important to study, because they reflect to a large degree the views of the average citizen.

If Germany is a nation which is accustomed to be led, so also she must respect the strong. At the moment she is in a very difficult position midway between strong Communist pressure on the one hand and one the other what I would describe as, to a large extent, a democratic vacuum. She is a little in the position in which many nations on the Continent have been, where, if in imagination we asked them on what side they were, they would reply. "The me side." She is rather like a man who is wondering which of two insurance policies to take out; she is obviously in search of the best security.

It is the free world's determination and strength which are the best security for Germany today. Hon. Members will remember the popular ovation which was given to General Clay not long ago, because his name is always associated with the Berlin air-lift; and, equally, the continued success of the United Nations in Korea has had a profound effect in Germany. I think it true to say today that, however much the standard of living improves, it is not butter but guns which Germany must have, so close to the Russian border.

The other day my hon. Friend the Member for Aberdeenshire, East (Mr. Boothby) was making a speech at Strasbourg, and on the subject of defence he said that in any conflict between committees of defence and tanks the tanks were apt to win. I should like the Under-Secretary to tell us, in terms as specific as is possible for the Government at this stage, how far the many discussions in committee have gone on the great subject of the European Army, bearing in mind that it is said that a committee is a group of people who individually can, take no collective action and collectively decide that no effective action can be taken.

It is not only in the economic and military sphere that Britain must show her strength in the West. There are also very important considerations in the political field. The hon. and gallant Member for Angus, South (Captain Duncan) referred to the great subject of the refugees. I shall not follow his remarks, except to say that we have also to take into account the refugees as a political force. The hon. and gallant Member talked in terms of 300,000 refugees, but in the Western zones of Germany there are over nine million people of German origin who are in fact refugees or displaced people. These nine million people are stateless and homeless, and if they find no support from the West it is more than likely that they will ask for the return of the lands and properties which were lost in Germany in 1945. The return of those territories would make a very wide appeal to Germany as a whole, because, of course, she wants to be a whole and united country. If that appeal is also stimulated by such movements as the Brotherhood, the Allied Powers will be in a very difficult situation, if, for instance, in the course of her cold war campaign Russia were to offer the return of those lands and properties.

I will not go further into the question of the refugees because I understand that it will come up on the Debate on the Strasbourg resolutions if we have it in Government time shortly, but I want to put one or two points to the Under-Secretary, because he will be going to Rome on 3rd November and will be considering the resolutions which were passed at Strasbourg. I would ask him to use his influence to see that the Strasbourg resolution about refugees is debated by the national Governments. The main purpose of the resolution was, first, that all national Governments in Europe should take a hand and a personal responsibility in doing everything on a national level for the refugees; secondly, that there should be established within Europe, under the Council of Europe, a provisional service which would look after the refugees of all categories and, furthermore, that that would lead eventually to the establishment of a European Refugees Office. I hope that the Under-Secretary will stand up for Britain and really press this most important social, economic, political and humanitarian case when he goes to Rome.

If the Under-Secretary sees fit tonight to give a considered statement about the relations to date with Germany, I hope that he will also tell us what is being done not only in the military sphere but also in the political sphere in regard to education and propaganda. I feel that the House—I hope I speak for all hon. Members about this—wants to be assured that His Majesty's Government are giving the powerful stimulant in Germany and in Europe of a Government determined to lead and determined to tip the scales in favour of the free West, of which I should say that this Chamber is the hub.

To sum up, our task is threefold. First, we have to prove that the free West is the stronger by the quality of the troops and equipment that we muster, and muster now secondly. we must counter the propaganda of the cold war, either direct or indirect, not only by our own propaganda but by proving by practical means that we mean what we say while Russia just gives promises; and, lastly, we should bear in mind that Communism is fought not only by material means but can be beaten by that side which shows that it has the most deeply held faith, the one which not only gives hope but will also inspire the personal dedication which human beings need. That is the golden thread which should lie through all our foreign policy. We must show that we believe in our way of life and that if pushed to defend it to the awful sanction of war, that we shall fight to the end—and beyond, if victory lies beyond.

6.18 p.m.

Mr. Michael Foot (Plymouth, Devonport)

One of the advantages and one of the difficulties of Debates on the Address is that hon. Members are permitted to raise almost any subject they like and therefore there is a danger that two or three consecutive speeches may have little relevance one to the other. I could make one proposal on that subject which might overcome our difficulties. The noble Lady the Member for Aberdeen, South (Lady Tweedsmuir) referred to the possibility of a Debate on the Strasbourg Resolutions. I have no object- tion to such a Debate, but I should have thought that if we are to make an arrangement whereby time is given by the Government for such a Debate there is a prior claim and that is that a day should be set aside in this House once a year for a Debate on some of the lesser matters which come before the United Nations. There are many important subjects, though perhaps not the most important, which are raised every year at the General Assembly, or very often raised, which should be discussed in this House. We ought to have an opportunity to discuss them, just as we should have a Debate on what happened at Strasbourg.

For instance, I would like an explanation of the vote given at the United Nations yesterday on the subject of Spain. I cannot understand why the British Government should abstain. That seems to me an abdication of duty. The Government should have voted against the motion. I would like to have seen the countries that abstained, such as Australia, India, Britain and the United States, voting against that motion and trying to prevent the re-entry of Franco Spain through the back door into, eventually, the United Nations and the organisation of Western Europe.

I would also like a discussion on the subject—raised in some of the speeches yesterday—of the atrocities that have been taking place on both sides in Korea. Some important speeches were made on that subject in the latter part of the Debate yesterday. I would also like to see the British Government raising at the United Nations the question of what is to be done to prevent the atrocities which have been committed by those with whom we are acting in concert in Korea, atrocities of which proof was given in the remarkable and appalling despatch published in "The Times" last week. I hope that on such matters the British Government will take the initiative in having the question discussed, either on the Security Council or at the General Assembly, whichever is the appropriate body.

Before I turn to some of the other questions of foreign policy referred to by the right hon. Member for Saffron Walden (Mr. Butler) I wish to make a brief reference to a subject in the Gracious Speech which has not been mentioned so far today, the proposal about the beet sugar industry. I do not know who thought up this half-baked proposal, but whoever did so should take it back and cook it a little longer. It is a ludicrous proposal that the Government should take over a section of this industry—it happens to be the section which needs to be subsidised—while we leave Messrs. Tate and Lyle to profit from the monopoly position which they hold in the rest of the industry.

Also, it will have some complications from the point of view of our relations with places from which we draw the major part of our sugar if the Government take a vested interest solely in the refining of the beet sugar and leave the refining of the cane sugar in a different category. I do not believe there is any defence of this proposal whatever, and I hope the Government will think it over again. I sincerely hope the Government will not show the same timidity in approaching the major economic problems which we have to face at present.

Before I discuss those and, in particular, the burden of rearmament and how it is to be paid for, which, I believe, is the main economic problem we have to face, I shall make one or two references to the speech of the right hon. Member for Saffron Walden. The right hon. Member speaks in such an amiable manner that sometimes one does not recognise how brazen he is being. His speech today was the most brazen speech I have heard for a long time in the House of Commons. In particular, I always have a curious feeling in some part of my anatomy—I am not sure where it is—whenever I hear him calling for British leadership in foreign affairs.

I have been reading recently a magnificent document produced by the Americans. I am sure the right hon. Gentleman, who has paid such a tribute to the Americans today, will be glad to read the document produced by the State Department and published a week or so ago, a document which they thought well worth publishing at this time, a document which describes how the Germans and the Italians carried out their aggression in Spain at the very moment when the right hon. Gentleman was at the Despatch Box denying that they were there at all. He did that for three years on end, but we must welcome his conversion to the principle of collective security even if we think it is somewhat brazen that he should have been put forward to make the appeal for greater British leadership in foreign affairs.

There was another suggestion made by the right hon. Member which was even more brazen. If I remember his words correctly he said, referring to the Government, that there had been something psychologically wrong in our handling of the people in Asia. I wonder what approach towards the people of Asia he thinks would have been psychologically right. Is it the policy of his leader towards Asia which he thinks is psychologically right? It is said, of course, that the mind of the Asiatic works in a curious way, but I should have thought it would not have been a psychologically wise proposal to have approached the Indians in the manner of the Leader of the Opposition when he suggested that we should have sent troops there to prevent the agreement that was made by the British Government a few years ago.

It was even more brazen for the right hon. Gentleman, in almost the next sentence after he had brushed aside the whole political history of the relations between this country and India in the past five years, to say that what we need to do now is to keep in the closest touch with Mr. Nehru, respect him, consider his views, and pay attention to what he has to say. It was a most glowing tribute. But if the policy of the right hon. Gentleman and his party had been carried into effect, we would not have been able to talk to Prime Minister Nehru because, under the rule of the right hon. Gentleman's party he was in a British concentration camp and he would be there today if the policy of the right hon. Gentleman's party had been followed.

Mr. R. A. Butler

Perhaps the hon. Gentleman would allow me to intervene for a moment? I was engaged in working strenuously for the goal of self-government in India just as soon as, and probably long before, the hon. Member was interested in the subject.

Mr. Foot

And it so happens that the Prime Minister of India today, to whom the right hon. Member paid such a glowing tribute, denounced the Act—in which the right hon. Member played a big part in putting through this House—as a fake and a fraud and not a promise for self-government for India at all. If the right hon. Gentleman likes to deny that and say it was a great gesture of friendship to Mr. Nehru and to Mr. Gandhi he can, but of course it is not so.

Mr. Butler

I can say this, as I do know a great deal about self-government in India today, that the structure of self-government in India is largely based on the foundation of the Act to which the hon. Gentleman refers.

Mr. Foot

The right hon. Member really must not talk as if nothing has happened in India since 1935. Quite a lot has happened. He is suggesting that the Government of India Act, 1935, which he helped to put through this House—which, incidentally, was violently opposed by his Leader—was a great liberating act for the people of India. Who shall we ask whether this was an act of liberation? The person to ask is the person to whom the right hon. Member paid a glowing tribute, Mr. Nehru. Mr. Nehru denounced that Act and the whole proposal of the British Government at that time as a hypocritical Act which did not intend to carry through the promise of saying to the Indians that they could be fully independent if they wished, as did the Act which was carried through by His Majesty's Government. Really, it would be better for the right hon. Gentleman to keep off those areas of South-East Asia when he is debating with a Government which did carry through an act of liberation there in defiance of all that was said by the Leader of the Opposition.

Mr. Butler

I am sorry to interrupt the hon. Member again, but there are some things upon which one feels deeply in public life. It is a travesty to try to make out before this House that I have not devoted the greater part of my life to serving India and encouraging her self-government. If the hon. Member likes to attack me on other subjects, I will take it, but on that one I feel deeply. Perhaps he will do me the honour of communicating with the Government of India. If he does I have no doubt that he will get a very dusty answer.

Mr. Foot

I am not making any attack on the sincerity of the right hon. Gentleman, but I would respect better the opinion he has now stated if he had got up and denounced his own Leader when his Leader was fighting against the whole Measure for liberating India as it passed through the House of Commons. The right hon. Gentleman was absent on those occasions, just as he was absent from the debate about the Burma loan, when he felt that the policy of his party was so disgraceful that he could not attend to see what happened.

Take another of the glowing tributes which the right hon. Gentleman has paid to another country; any country can be praised from the Tory benches except this country, but let us consider this one which was paid by the right hon. Gentleman. He said that he was very glad to see the manner in which the recent proposals about Marshall Aid had gone through Congress. I propose to say something of how those measures were put through Congress, and of the facts which were presented to Congress when they were put through.

Before I come to that however, turning now from the speech of the right hon. Gentleman on foreign affairs to his remarks on domestic matters and the consequences of the present rearmament programme, the problem seems to me to be how we are to sustain the standard of life of the British people at the same time as we need to meet a whole series of other demands. The first demand—I am not taking them in order of priority—is to continue to balance our foreign payments at a time when Marshall Aid will be disappearing.

I certainly congratulate the right hon. Gentleman, because since the White Paper was published showing that we have balanced our accounts for the past six months, for the first time since, I think, 1935 or 1936, he is, I believe, the first Conservative leader who has come within measurable distance of making any reference whatever to the balance of payments crisis. It was not mentioned at all yesterday by the right hon. Member for Woodford (Mr. Churchill). He talked a lot about it last year, and about this mendicant nation not being able to close the gap. His speeches during the two previous Debates on the Addresses in reply to the King's Speeches were about this nation not being able to close the gap and living on charity. We did not hear any of that, not even a reference to the balance of payments, yesterday. We did not hear a reference to it in the speech of the right hon. Member for Warwick and Leamington (Mr. Eden) on the radio the other day. One might have thought that our closing of the gap in the previous six months, for the first time for some years, was a matter worth mentioning, but there was not one word about it in that broadcast.

The right hon. Member for Saffron Walden has carried off the crown; he is the first to mention it. What he said, I think, was that there has been improvement in this respect, although not enough. No one would imagine that this was a matter which we had been debating and discussing for the past five years, and that during that time we had been saying that the biggest economic problem facing us was how we were to close the gap and achieve economic independence. One would have thought that the Opposition would not have found it so disagreeable to say at least one good word about that achievement. That demand, however, is the first demand that we have to meet, and no doubt it will be difficult to meet.

The second demand which we have to meet, while seeking to sustain the standard of life of our people, is that if we are to carry out wise policies in the Far East and elsewhere we must increase the amount we are prepared to devote to colonial development and to the assistance of backward areas in the Far East. Do not let anyone "kid" himself about it: this means taking resources out of British production and giving to other people, which imposes a burden upon us.

The third thing we have to do is to maintain the capital investment programme, which, of course, includes the housing programme. But then comes the fourth demand. While we do all these other things, we must also fulfil the increasing needs for re-armament. This is altogether a very heavy burden upon the British people.

The miracle of the past five years is that we have been able to carry all these burdens and that our backs have not been broken. We have carried proportionately a much heavier defence programme than before the war, heavier even than the United States of America: and if we add together the amount of aid which we have given to other nations in the form of releases of sterling balances and the rest, plus the greater proportionate contribution we have made to defence than have the Americans, I say that in the past five years, despite all our difficulties, the British people have made at least as big a contribution to the free world by this form of aid as have the United States of America—and probably greater. That ought to be recognised. We never hear it said by anybody, but it is surely something which is worth boasting about. At the same time we have maintained a bigger capital investment programme than ever before the war, and considerably bigger than the Americans have done during this period, and we have made an enormous contribution to countries in backward areas. These are immense burdens.

The hon. Member for Epping (Mr. Nigel Davies) made some comparison between productivity in this country and in the U.S.A. It is not very fair to this country, however, to say we can make the comparison between 1938 and 1950 and imagine that the Americans have had to face the same situation as have the British throughout that period. [HON. MEMBERS: "Tell them who fought."] There is a good deal—[HON. MEMBERS: "It was not always the Tories who fought."] No, we do not want any sneers from hon. Gentlemen opposite. [Laughter.] The British people—[An HON. MEMBER: "Make it clear."] I am making it clear, because, apparently, it is left out of all Tory speeches.

I have had many interruptions from the benches opposite; there is nothing that angers Tories more than the facts. If they will not take the facts from me, perhaps they will take them from the document which was presented to Congress by the E.C.A. Mission to the United Kingdom, describing the facts and comparing what had been done in this country since the end of the war and what had been done in the United States. All the comparisons are very agreeable to this country. In production it is shown that we have made a comparable increase with the United States——

Mr. Nigel Davies

The hon. Member seems to be maintaining that the chief reason why productivity should have risen more in the United States than here is that they came into the war later. Is he not aware that the greatest part of the rise in productivity came about since the United States entered the war?

Mr. Foot

The hon. Member has got it a bit wrong. I was complaining of his comparison of the year 1938 with 1950 as between this country and of the United States, and I thought it was an unfair comparison towards this country. That is proved, for if he looks at the facts he will discover that whereas, during the war, British production in so many respects went down because we were transferring so much to military purposes, United States production went up enormously; and in the United States today production is lower than at the peak of the war, but that is not the case with this country.

Mr. Davies

Would the hon. Member be prepared to take 1942 as a deadline and compare production then?

Mr. Foot

I will take, not my own figure, but the figure used by the E.C.A. Mission; it is not "cooked" by Mr. Morgan Phillips at Transport House. What the Americans say is this: In manufacturing we find in Britain a 20 per cent. improvement in output per man since 1946. Except during the fuel and transportation crisis of 1947 which was precipitated by exceptionally had weather"— The Americans did not take their information about that crisis from the Tory Front Bench. Their Report continues: progress has been steady as well as rapid. The overall rate of improvement in these years outstrips the comparable progress made in the United States, hut, of course, the United States starts from a much higher base. Who left the base? It was a base left in a capitalist Britain at the end of the Second World War, not by a Socialist Britain. It was not a Socialist Government which organised the affairs of Great Britain before 1939. Moreover, the right hon. Gentleman said he could not see how we were still suffering from any damage left from before the war, but the document published by the American Congress shows that it is only in the year 1950 that Britain has been able to make good the capital stock she had before the war.

All through these years, 1946 to 1950, we have been increasing our production far beyond anything known before the war and increasing our productivity at a more rapid rate than was known before the war with a smaller capital stock and equipment than before the war. These are tremendous achievements. I am eager to acknowledge the generosity with which the Americans have stated the facts to Congress, but the more I acknowledge their generosity the more disgusted I am with the meanness of the Tories of this country who will not say one word about the most spectacular recovery of any country in Europe.

If it had not been for the re-armament programme we could have expected that this process would have continued with growing success. We could have looked forward to wage increases of several millions without the danger of inflation. We could have looked forward to a Budget next year in which there would have been considerable tax reliefs or disbursements of fresh benefits, perhaps 5s. for the first child under the family allowances scheme. We could have looked forward to that quite confidently in view of what has been achieved in the last five years, and we could have carried through the programme of balancing our accounts before Marshall Aid came to a close. There is no doubt, therefore, that if that happened there would have been no question of what the result of the forthcoming General Election would be.

Mr. Nigel Davies

What about the last one?

Mr. Foot

At the last election the main cry of the Tories at every election meeting was, "What will happen when Marshall Aid comes to an end? There will be a great economic crash." If the hon. Member, who, I have no doubt, made speeches on that subject, will now go and tell his electorate that we have closed the gap he will be the second Conservative to admit it.

Mr. Nabarro (Kidderminster)

Will the hon. Member be mean enough to admit that the closing of the gap in overseas payments is largely due to excessive prices prevailing for commodities provided by our Colonies?

Mr. Foot

It just sticks in the Opposition's throat. They cannot say one good word for this country.

If it had been the other way and we had had no great swing in prices against us throughout these years we would hardly have had a gap at all, but the situation is that many of these perfectly legitimate hopes have been dashed by the requirements of re-armament and the situation may be that there is a likelihood of considerable increases in prices in the next 12 months and no Government could stop it, however ruthless and effective they were in applying controls. Even so, I believe we will be bound to see a considerable increase in prices.

That will be met to some extent and will be compensated in the homes of some by an increase in wages for a considerable number of people, but there will be a great many others who will not get a wage increase, a considerable number of pensioners and the like, who will be put in a very difficult situation by our rearmament programme. I say that it is intolerable that a Socialist Government should allow a considerable part of the weight of the increased re-armament programme to fall on those people while there are still so many people in the country who have plenty of money, who would not suffer by the re-armament programme in increased costs at all. Apparently, they are still to be subject to no further action. They should pay the contribution for re-armament rather than the people at the bottom.

This is the main issue, I believe, that faces the Government in dealing with the immediate cost of re-armament in this country. Someone has to bear the burden and I say it should not be the people who are the wage earners, unfortunate enough not to get an increase in the next six months, or the pensioners. It should not be people of this kind at a moment when there are still plenty who have more than they need. In the past five years a certain amount of redistribution of income, quite an appreciable amount, has been carried through, but it has left almost untouched the distribution of property in this country. That is almost untouched, indeed it may be that private accumulations have more than kept pace with the burden of Death Duties and the rest—[HON. MEMBERS: "No."]—I should think that is the case.

If we look at the facts before the war we find that it was certainly the case that for 30 years before the war there was practically no change in the distribution of property in this country, despite Death Duties and steeply graduated taxation. We have had a boom for something like 10 or 15 years and I say to the Government that if it is to act as a Socialist Government it must take some action in this respect. The only kind of action which can be taken is some form of capital levy, or re-armament levy. I do not see who could complain about it because, if there are in this country people who are still drawing enormous sums from unearned income and property they inherit, surely they ought to pay for rearment before the pensioner who will be affected by increases in the cost of living.

I do not expect this argument to appeal to hon. Members opposite, but I expect it to appeal to a Labour Government and I say it is much better for a Labour Government to challenge this House of Commons and, if necessary, the country on this kind of issue than it is for them to try to manoeuvre and scheme to avoid any clash in this delicately balanced House of Commons. I hope that these are some of the matters which the Government will consider before they introduce the next Budget and that it will be a Socialist Budget and one which will indicate to the country that the burdens of re-armament are to be fairly borne.

If the burdens of re-armament are to be fairly borne, they should be fairly borne not only between one class and another in this country, but also between different countries. I must say that the way in which the latest re-armament proposals have gone through the House of Commons has been very curious. I blame myself as much as anyone else, because no one has a right to complain if he did not protest at the time—and I did not protest when the proposals went through the House. But, I think that if hon. Members had foreseen how these negotiations would turn out they would never have acted in the same way and responded in a few hours to the proposal made by the Americans and have said that this was the contribution we would make on the basis of a contribution also being made by the United States of America.

Some statements have been published about these recent negotiations and it looks as if that situation is greatly altered. If it has altered I think the Government should explain it. I hope the Chancellor of the Exchequer will explain it to-morrow. If it is a fact that the negotiations with the Americans on this subject have not gone as well as we would have liked, and if that amount of re-armament we were proposing originally was as much as we could bear then it follows that if we carry through this full programme, it is more than the Government itself thinks the country can stand. I say we ought to review the rearmament policy in that light, partly because I believe there are always possibilities of enforcing a stricter economy in the Armed Services. That is one of the lines of action that should be taken.

The only thing I would say, in conclusion, is that although we have balanced our foreign accounts and thus have dealt with this problem about which we have argued for five years, and although it looks at first glance as if it has brought great disadvantages to us—because we are now having Marshall Aid cut down at a rapid rate and finding that it might affect the amount the Americans are prepared to advance for the rearmament programme—I personally am thankful, grateful and proud that we have achieved this balance in our foreign accounts.

I hope the Government are not by any chance preparing to relax some of the controls over our foreign exchange and foreign trading, which have been the main means of bringing about this satisfactory state of affairs. We have been able to escape from this position partly because we got the British Commonwealth to agree to a cut of 25 per cent. in their dollar imports—that is, all Commonwealth countries except one or two, and these have recently been lecturing us about how much we ought to spend on defence. That cut in imports was one of the main instruments which enabled us to achieve the independence which we wished to secure, and despite all the enticements from "The Times" newspaper and from Free Traders like the "Economist" and others, I hope the Government will stick to the programme of building up a powerful, strong sterling area, which can stand on its own feet and that we shall not give away any of these controls.

Let us be proud that we have achieved this independence. I think Members on all sides of the House were of the opinion that it was undignified in some respects that we should have to accept assistance from the United States. It was one of the fervent aims of all Members of all parties that we should achieve our independence as speedily as possible. Certainly, many of us on this side of the House wished to see that goal reached, because we believed that thereby British influence throughout the Commonwealth and the world would be greatly enhanced. I hope the Government will pursue the Socialist measures which are required to maintain this independence and the Socialist measures required to share fairly and equitably any additional burdens that have to be carried. I hope, also, that in their foreign policies they will show that this country stands on its own feet, and that it has a voice of its own with which to speak about the affairs of this world.

6.54 p.m.

Commander Maitland (Horncastle)

The hon. Member for Devonport (Mr. Foot) made an extremely able debating speech, as he always does. We have listened with great interest to what he had to say. He is perfectly entitled to take the point of view which he does—that our re-armament should be financed by private capital and presumably by saving. He should not, however, delude the people of this country who have not got private capital into thinking that it is going to make very much difference to the kind of burden that they will have to bear. All of us will have to bear the burden, and it is right that those who have the most money available should bear the heaviest part. At the same time, he should not delude the people of this country into thinking that rearmament can be financed without considerable sacrifices.

I was hoping that the hon. Member was going to make a speech on foreign affairs. He did mention Spain in passing, and that is a subject to which I wish to address myself tonight. In one of the last Debates in the other House, the Minister of Defence, concluding a speech on defence, used these words: We have no quarrel with the Russian people. They can live their own lives, and so can the people in the satellite countries. We have no desire to interfere with them, but we resent any attempt to interfere with our way of life and with our democratic principles."—[OFFICIAL REPORT, 14th September, 1950; Vol. 478. c. 1398.] I do not think there are very many people who would disagree with those sentiments, and certainly I do not. They express beliefs I have always held. It seems to me that if we apply this doctrine to a stronger Power, why cannot we apply it to a weaker country, namely, Spain? I want to try to examine this question objectively and to avoid controversy as much as I can.

After the war there was deep feeling in this country in favour of intervention in Spain. For many years we had been fighting Fascist countries, and it was argued that it would have been only a logical step to have entered the only remaining Fascist country and do what we could to alter that Government. In my opinion quite rightly, the Prime Minister, entirely in agreement with my right hon. Friend the Member for Woodford (Mr. Churchill), put these ideas on one side, but there remained an attitude in this country towards Spain which I believe was quite impracticable.

Our attitude to Russia has changed. It is against her that we are arming and not Spain, and surely today we would not consider active intervention in Russia. We would not say, as did the predecessor of the present Under-Secretary of State for Foreign Affairs in a Debate in this House, that until there was a different régime in Spain and until General Franco's Government had been deposed, we would not deal with them. The Prime Minister has told us that the policy towards Spain was the right one, and that he believed it would bring right results, thereby providing Spain with a happier Government, which is something for which we all wish.

Surely we ought to look at this question again in the light of what is happening today. All through our Debates on foreign affairs, I have listened for any references to Spain and I have read any that I missed. I have found that the general opinion was that it was fear of Communism that was keeping Franco in power. If that is so, an assurance of our support against Communism would be the better way of helping the Spanish people to obtain the Government that they require.

I want the House to think for a moment about the position of Spain should a war with Russia occur. One does not have to be a great General like Eisenhower to realise the enormous strategic importance of Spain. That country is the guardian of the entrance to the Mediterranean, and in the Pyrenees it has the last remaining natural tank ditch in Europe. Its ports would be useful to us for submarine warfare, and even more useful to an enemy. Some of the ports could be used by us for bringing in supplies to Europe, as well as spreading the area which those supplies would serve. There is also its proximity to Africa. Surely these are matters which must appeal to anybody who is considering the strategic defence of Europe on the basis of an attack from the East.

If we could have an alliance or a friendship with Spain, I feel that it would save us an enormous amount in our rearmament programme. It is, after all, to deter the Russians from aggression that we are arming. Anything that we can do to improve our position is a deterrent, and a friendship and alliance with Spain would undoubtedly achieve that object. It is always interesting to see what the other side think about such a proposition. I had the information from the Foreign Office only this morning that extracts from "Pravda" take the line that the developing of interest in Spain is an imperialistic plot to get Spain in the western camp. If they think that, it might not be a bad thing to get Spain into the western camp. Perhaps that is an argument of expediency, and expediency is always highly criticised and condemned when it is used as an argument; but expediency is a strong master, and there would not have been the need to make an argument simply from expediency if what I believe to be the correct, right and proper attitude to Spain had been adopted by the Government in their foreign policy from the beginning of their term of office.

I agree with the hon. Member for Devonport in feeling dismay that the British delegates at the United Nations abstained. I do not like political abstainers. In my own voting record in this House, I have abstained on one or two occasions and I have always despised myself for doing so. It was not for that my constituents sent me to this House. Neither is it for that our delegates are at the United Nations Assembly today. But I disagree with the hon. Gentleman as regards the way in which they should have voted. They have merely made an almost indefensible position more indefensible, and I think they have made a great mistake.

We have to face, as almost from today, the fact of a new attitude towards Spain, and we have an opportunity now. It is clear that now it is open to us to resume full diplomatic relations with that country. I should like to know from the Under Secretary of State—and it is a very important matter — what action the Government are proposing to take. I think they must have considered this and I feel there can be nothing to stop the hon. Gentleman giving me an answer this evening. The opportunity has not yet been entirely lost. The key to the situation rests with whom we appoint as ambassador, if we do appoint an ambassador shortly, as I hope we shall. I disagree entirely with the views expressed from the other side of the House when hon. Members have said that the present representation in Spain fulfils all the needs of representation.

Mr. George Thomas (Cardiff, West)

Why not Oswald Mosley?

Commander Maitland

The whole machinery is there ready, but I believe that who is to be the ambassador is a vitally important matter. How much, for example, do the Government owe to Lord Mountbatten for the way in which he handled India? There is an example of what one man can do, and throughout our history, particularly in our foreign affairs and diplomacy, it has always been the work of one man. The only way we can get out of this mess into which we have been manœuvred is by appointing the right man to this most difficult post. I do not believe there is any man too great to take on that job. Any great man would at once realise the importance of it, and the difficulty. He could do no greater service to his country than to bring this country and the people of Spain into friendship and co-operation.

We are at the beginning of a new era in our relations with Spain. Obviously they have to change, and it is my hope and prayer that they will change for the better. It is no use founding this relationship on an easy hatred. All of us know it is much easier to appeal to the political dislikes and hatreds of people in order to obtain their loyalty and support than it is to appeal to their better principles. But that policy is always wrong in politics, and I am certain it is absolutely wrong in foreign policy. We must try to make friends with Spain. We must appoint a great man in Spain to enable us to do it, and I hope that this opportunity will not be lost. I hope this new Session, this new opportunity in this new House, may be used to the full by the Government, who have completely failed to use the opportunities of the past.

7.6 p.m.

The Under-Secretary of State for Foreign Affairs (Mr. Ernest Davies)

It may be for the convenience of the House if I intervene in the Debate at this stage to reply to matters which have been raised regarding foreign affairs. A wide field of home policy has been covered, the aspects of which will be dealt with by subsequent speakers during the next few days; but it was decided to confine the Government spokesman today entirely to the matters of foreign policy, and consequently a number of points have been made to which I will endeavour to reply.

Both my hon. Friend the hon. Member for Devonport (Mr. Foot) and the hon. and gallant Member for Horncastle (Commander Maitland) have raised questions on Spain. I think it is not difficult to explain to them the reason it was decided that we should abstain when it came to voting at the United Nations Assembly earlier this week. The explanation of our action is that we do not want in any way to give to the world an indication that we have changed in our attitude towards the Franco régime, but that we still condemn the basis on which the Franco régime was established, and that we are opposed to many of the actions which Franco has taken in carrying on his totalitarian régime.

Commander Maitland

I entirely agree that we should show that we are in no way in agreement with General Franco or his régime. Neither are the Americans. The Americans have made it perfectly clear in their approach to this matter that they entirely disagree with his régime, although they have taken an entirely different and better way of doing it.

Mr. Davies

In view of the policy which we have pursued in the past, it was considered that if we had voted for the proposals put before the United Nations this week we would have appeared to be condoning something which we had condemned. It was for that reason that we abstained in the vote rather than cast a negative or an affirmative vote.

The hon. and gallant Member for Horncastle appears to be equally ashamed of the behaviour of Franco, but at the same time wishes to make use of him. We do not consider that we can regard the question of Spain purely from the point of view of strategy. There are many other factors involved in our relationship with Spain and the present régime there which prevent us from regarding it solely in that way, and our policy has been framed accordingly. If the resolution gets through the Assembly, if it is carried by a two-thirds majority, it will be time enough to consider whether we shall return an ambassador to Madrid, and, if so, whom that ambassador shall be.

The right hon. Member for Saffron Walden (Mr. R. A. Butler) referred to the recent resolution passed at the United Nations concerning peace. He said that the policy on his side of the House, which was, of course, shared by all the House, had the avoidance of war as an objective—and a noble objective. The foreign policy we are pursuing today and which we have supported in the United Nations is the building up of our strength, and is directed entirely to that end; but we must regret that the methods envisaged in the United Nations Charter for maintaining peace have not been as effective as we had hoped; that only through the fortuitous circumstance of Russia being absent from the Security Council when aggression took place in Korea was it possible for the Security Council to act in the manner in which it did and to take strong action which has eventually resulted in the victory of the Southern Korean and the United Nations forces over the aggressor.

Because of this fortuitous circumstance, and because it was evident that the United Nations could succeed when it did act in the way in which it had been envisaged it should act in standing up against aggression, it was decided that, because of the use of the veto and the failure to obtain full co-operation in the Security Council in the past, it was necessary to give more powers to the General Assembly itself so that, in a repetition of the Korean incident or in any other circumstances where aggression was threatened or took place, it would be possible for the General Assembly to take action without waiting on the Security Council, which was subject to the veto.

It was, therefore, necessary to seek other means. We are hopeful that this new resolution, which has gone through this year's session of the United Nations Assembly, will make that body effective in preventing aggression in the same way as the Security Council has been successful in meeting aggression. In our view, it is not enough to be prepared and to stand up against aggression when aggression takes place. The purpose of the United Nations—and the test of its success—is to deter the aggressor, to prevent aggression from occurring. It is to that end not only that we have supported this resolution at the United Nations and given more power to the Assembly itself, but that our building up of the North Atlantic organisation is directed.

As right hon. and hon. Gentlemen are aware, this resolution provides for emergency sessions of the Assembly to be called at short notice and recommends the steps which will ensure that particular States are in a position to respond promptly, if they wish to do so, to any recommendation, including one involving the use of armed force, which the Assembly may consider necessary. It also provides a new machinery whereby United Nations observers, with the permission of the State concerned, can be sent without delay to any area where peace is threatened. Our belief is that the principle of collective security has been strengthened by recent events and that the possibility of making a policy of collective security fully effective has been enhanced by action which has recently been taken by the United Nations. We hope that the lessons have been brought home to all potential aggressors and that a step has been taken towards the preservation of peace.

Sir Ralph Glyn (Abingdon)

Are we to understand that the passage of this resolution in itself is sufficient to make this part of the new organisation?

Mr. Davies

No, Sir. The passage of this resolution in itself does no more than to create machinery for more speedy action on the part of the United Nations and to overcome the danger of obstruction in the Security Council.

Sir R. Glyn

Is it effective from now?

Mr. Davies

It is setting up the machinery and it becomes effective during this meeting of the General Assembly, once it has gone through the General Assembly itself. I believe that so far it has only passed through a Committee and that it still has to go to the General Assembly.

The right hon. Gentleman the Member for Saffron Walden asked questions concerning Korean relief and rehabilitation. We are much concerned with this matter. The House may not realise the tremendous problem which confronts the United Nations in establishing a system for relieving immediate distress in Korea, for rebuilding that country and rehabilitating both South and North Korea. The problem is one of great magnitude which will inevitably involve tens of millions of pounds; but already the Economic and Social Council are discussing a motion to establish an agent-general with power to receive contributions and to administer relief in liaison with the United Nations Unification Commission.

A decision on the amount of money required and the financial methods to be adopted will shortly be taken in New York. When that has been done and the contribution of this country has been decided upon, it will be necessary to lay a Supplementary Estimate before the House. Meanwhile, His Majesty's Government are doing what they can to meet the immediate demands for relief. They are sending supplies requested by the Unified Command. They are arranging for medical stores and other commodities which are in great demand. It is hoped that our contribution which, as has been stated, in the first instance is in the nature of £500,000, will be of some assistance.

I think it was the hon. Member for Devonport (Mr. Foot) who referred to the question of atrocities in Korea. Of course, His Majesty's Government consider that it is most regrettable that such atrocities should have taken place Clearly, there have been atrocities on both sides. That cannot be brought into question. The attention of the Americans has been drawn to these reports which have been widely circulated in this country—including "The Times" report which has attracted much attention and which has been brought to the notice of the House to-day. The Americans have replied to us that the military command is doing what it can to stamp out any vindictiveness. I assure the House that the Government will watch the situation and do all they can to prevent any further atrocities and to try to bring an end to any vindictiveness.

The right hon. Member for Saffron Walden said that he considered that we in this country were not taking a sufficient lead in foreign affairs. Then he criticised us for the action we took in China. It seems to me that when we take the lead and it does not suit the policy of the Opposition, they do not give us credit for taking a lead but they criticise us and suggest that we should wait on the United States of America. Similarly, the right hon. Gentleman referred to Pandit Nehru. It was Pandit Nehru who also took the lead regarding China. Surely, the right hon. Gentleman would not suggest that he, too, should have waited for a lead from the United States?

In recognising the People's Government of China we considered that we were facing the facts. We were accepting the fact that the People's Government of China was the effective Government of the country; and we recognised the Government at that time. It is unfortunate that the establishment of diplomatic relations has not yet been completed and that no real progress has been made. It is for the Chinese to take the next step. We have exercised considerable patience in this respect, and it seems that patience is essential.

Mr. Peter Roberts (Sheffield, Heeley)

I wish to follow the hon. Gentleman's argument. The Chinese Government is one which has come into power by the use of force, in the same way, possibly, as the Spanish Government came into power. I fail to see how the argument be applied about the recognition of Spain and the question of sending an ambassador, can justify sending an ambassador to China. It seems to me to be inconsistent.

Mr. Davies

The attitude of Spain during the last war was very different from the attitude of China. Further, in regard to China, we have taken the lead at the United Nations, and it is the earnest hope of His Majesty's Government that the change-over from Chinese Nationalist to Peoples Government representation will take place as soon as possible in all competent organs of the United Nations. We cast an affirmative vote in the General Assembly and in the Economic and Social Council for what we considered to be the true representation of the Chinese Government, and we regret that so far it has not been possible to obtain the necessary majority to bring about the change in this representation on the United Nations.

The right hon. Gentleman also referred to the question of South-East Asia, and I can assure him that we are equally concerned about conditions there. I think he must, however, give us credit here again for taking a lead which he is so loth to admit that this Government do on occasions take in the foreign field. We have just held in London a conference of South-East Asian countries, mainly Commonwealth, which discussed economic matters. Plans which have been drawn up by the different countries represented were laid before it—plans for considerable assistance being given on a mutual basis. The report of the Conference, which will be published within a few days and will be available to hon. Members, makes certain proposals regarding the economic development of the South-East Asian countries.

Although this Conference was called primarily for members of the Commonwealth, we were very glad that it was attended by representatives of the States of Indo-China, and that Burma and Indonesia also sent observers, because we consider that the economic development of South and South-East Asia provides one of the strongest bulwarks against the spread of Communism in that area, and that the work which we are doing in cooperation in the economic field is as valuable as the contribution which we are compelled to make in the military field, particularly in Malaya, and that which the French are being compelled to make in Indo-China.

We are far from complacent about the gravity of the situation in these countries, but we do stand by the position that, parallel with military action or police action, there must be rehabilitation and development of the areas concerned, and that only thus will we be able ultimately to bring home to the peoples of those countries the fact that the alternative to Communism will offer them a greater hope of improvement in their standards of living than adherence to the false promises and false predictions in the nationalist appeal of the Communist forces.

If I may now turn to the question of the Consultative Assembly at Strasbourg, which has been raised this afternoon, I would point out that my right hon. Friend the Prime Minister stated yesterday that the House should have a day's debate on these resolutions, but there is some difference of view whether this should take place on a Supply Day or whether it should be provided out of Government time. As we have already stated, we think that this can be arranged on a Supply Day, and we take that view for the reason that it was the right hon. Gentleman the Leader of the Opposition himself who, at Strasbourg on 11th August, told the Consultative Assembly that for Great Britain he could promise that the resolutions which had been put forward at the Assembly would be brought before the House of Commons through the procedural opportunities open to the official Opposition. We interpreted that, understandably enough, as meaning that they themselves would find the time from the time at their disposal. The right hon. Gentleman made this offer on his own initiative, but he appears now to be trying to get out of it. The Leader of the Opposition appears to say one thing at Strasbourg and another when he comes to this House.

Mr. Harold Macmillan (Bromley)

I do not wish to raise undue controversy, but I was present at these meetings at Strasbourg. If the hon. Gentleman will consult his colleagues, I think he will find that they will have the same impression as myself—that my right hon. Friend the Leader of the Opposition made it perfectly clear that there would be no difficulty in arranging a debate, because, under our procedure, if the Government did not wish themselves to initiate the debate, we would undertake to raise it under the opportunities open to us. If the Government did not wish to take what I think would be the more honourable, correct and appropriate procedure and pay some deference and honour to this great new experiment in Europe, my right hon. Friend promised that there would be no difficulty in arranging the debate out of the time of the Opposition. I am sure that that was the impression left on all those who heard the statement, and I appeal to any colleagues of mine on the other side of the House to say that that was their impression.

Mr. Davies

The right hon. and learned Gentleman appears to be putting a different interpretation——

Mr. Macmillan

I was once gallant, but I am not learned.

Mr. Davies

I apologise for giving the right hon. Gentleman credit which does not appear to be his due.

The right hon. Gentleman is putting a different interpretation upon it from that of the reporters at the Consultative Assembly. I have taken the trouble this afternoon to look up the report in which the statement was made, and I find that it was reported in the words I have read out. The right hon. Gentleman promised that the resolutions would be brought before the House of Commons through the procedural opportunities open to the official Opposition. I may add that the Government are quite desirous of having this Debate and of having the views of both sides of the House aired on the important and interesting issues raised at Strasbourg, and we look forward to the debate.

Meanwhile, I may say that I am deputising for my right hon. Friend the Foreign Minister at the Committee of Ministers which meets at Rome on Friday, and I hope that there we shall be able to make the position of the United Kingdom delegation and of His Majesty's Government clear, and that, as a result of the policy which we propose to follow at Rome, it will be seen that we are not taking a negative attitude in the Council of Europe and that it will no longer be just, if it ever was just, for us to he accused of dragging our feet.

There are, of course, certain clear and strict limitations which are imposed upon the activities of the Council of Europe by the Status, which, in our view, expresses the maximum agreement which could be reached between the European countries to work together within that context in the pursuit of peace. The extent of their agreement and the authority of the Council was carefully considered, and it is in the Statute. We do not think it is proper to introduce new principles, except in the form of amendments to the Statute with the consent of the Governments and Parliaments concerned, and I should add that we have now had the experience of two Sessions of the Consultative Assembly.

Differences have arisen between the Assembly and the Committee of Ministers, and proposals have been made by the Consultative Assembly and recommendations put forward which would, in effect, amend the Statute. While we cannot accept these recommendations as they stand, we do not say that the Statute is necessarily perfect, nor that no case has been made out for a reconsideration of the Statute, and we will go to Rome prepared to agree to some measures being taken which would enable the Statute to be examined again and full consideration being given to it, whether amendments are called for or not.

To that I would add that it is our intention that, if it is decided that certain amendments to the Statute are necessary, if the recommendations are not accepted and it is desired by others that they should take action either to federate or not, by partial agreement, then His Majesty's Government certainly will not stand in the way of any such partial agreements. That means to say that we will certainly not obstruct any action which any nations wish to take either to federate among themselves or to enter into agreements on a functional basis. If such partial agreements are entered into, then we will, of course, see whether we can associate ourselves with them. That, I think the right hon. Gentleman opposite, who was at Strasbourg, will agree, is some advance on the way in which in the past our policy was interpreted, and I hope that when the discussions end at Rome it will be seen that His Majesty's Government are anxious and desirous to make the Council of Europe work, provided there is willingness between the two bodies to co-operate, and that we desire to help in establishing harmonious relations between them.

But in referring to Strasbourg the right hon. Member for Saffron Walden mentioned the speech made by M. Spaak in London recently in which he said there was widespread mistrust of Britain on the Continent and that we were criticised for not taking the lead. I must say that when I was in Europe this summer I certainly did not gather that impression, and I believe that my colleagues with whom I have discussed these matters also do not share the view of the right hon. Gentleman that Europe considers that we are not taking the lead in foreign affairs. Wherever I went I found that Britain's leadership was much welcomed and eagerly accepted.

In that connection, it seems to me that one of the great leads we have given to Europe and to the world during recent years has been our own economic recovery. We cannot separate foreign affairs and home policy and place them in watertight compartments. The home policy which has been pursued in this country, the economic success with which we have met, the recovery which has taken place, the increase in productivity, full employment and the maintenance of our standard of living, all these and the other achievements during the last five years have been an encouragement and a lead to the people of Europe.

We are looked to as a country which has succeeded in maintaining full employment, in successfully carrying out economic planning and, at the same time, maintaining freedom and democracy. We consider that this policy which has met with so much success is one of the greatest contributions we can make to the preservation of democracy in Europe and that in itself it helps to stem the forces of Communism in Europe because it sets an example and shows that there is an alternative both to Communism and capitalism—the planned economic Socialism which we in this country are developing successfully.

Mr. R. A. Butler

Would it be true to say that M. Spaak, who made these criticisms to which I referred in passing, is himself a Socialist?

Mr. Davies

Yes, that is perfectly true; he is a leading Belgian Socialist and is perfectly entitled to express the views and opinions which he holds at the present time. But he was expressing them in the context of the Council of Europe.

Regarding our taking the lead through our economic recovery, I was gratified to find the right hon. Gentleman admitting, on behalf of the Opposition, that we have succeeded in establishing some economic recovery in this country. He did so when he referred to the possibility of Marshall Aid coming to an end through mutual agreement. We are determined to reach this stage as soon as possible, and the fact that we have now reached so satisfactory a position regarding our balance of payments indicates the correct- ness of the policy we have pursued both as regards devaluation and full employment, and also as regards our policy of increasing production in this country.

Considerable developments have taken place since devaluation was decided upon in September, 1949. I think that the success of our export drive which has followed, and which has only been possible through the continuation of controls in this country, shows the correctness of the devaluation which has taken place. But these are not matters with which I propose to deal; they will be dealt with at far greater length by subsequent speakers from this bench.

There is one other matter to which I wish to refer and which arises out of two or three speeches made this afternoon and that is the question of refugees. A great number of questions were put to me by hon. Members opposite concerning the International Refugee Organisation and the position of refugees when it is wound up. I will see that they receive detailed replies to their questions, but I do not wish to weary the House with them now. All I will say is that it is expected that most of the activities of the International Refugee Organisation will have ceased by the end of September next year; it will continue in one way or another until the end of September next year.

By that date there will be 300,000 refugees who will not have been repatriated or resettled and who will remain on the books of the I.R.O. Of these only 60,000, that is, 20 per cent., are likely to be in need of material assistance. The remaining 240,000, that is, the other 80 per cent., will by then, we hope, have been fully absorbed into the economy of the countries in which they are residing, and until they are so absorbed relief arrangements can be made for them by the local authorities. There will be no further financial calls upon contributing Governments for the I.R.O., but hon. Members who have raised this matter will be glad to learn that the I.R.O. still holds some 93 million dollars which, it is considered, should suffice until next September. It is by careful housekeeping that they have succeeded in maintaining this residue of funds with a view to tiding over the transition period

In reply to the question regarding the future status of refugees, the position is that the United Nations High Commissioner for Refugees will deal with much broader groups than those eligible under the I.R.O. His duties will include the promotion, through special arrangements with Governments, of any measures calculated to improve the situation of refugees and to reduce the number requiring protection. We think that that mandate is broad enough to ensure that there will not be any large number of refugees left uncared for once the I.R.O. comes to an end.

Mr. Butler

Can the hon. Gentleman give us any assurance about the adequacy of the funds available to this officer, and also whether the I.R.O. will be responsible not only for refugees in Europe, but also in the Middle East?

Mr. Davies

As regards funds, the residual funds of I.R.O., used for resettlement of persons, will be partly administered, of course, by him. He will be in association with I.R.O. in the carry-over functions of I.R.O. In addition, there will be budgetary action to ensure that funds are at his disposal. As regards whether the I.R.O. will be responsible for refugees elsewhere, of course, at present, responsibility for the Middle East refugees is in another organisation of the United Nations agency. Similarly, it is not yet decided who is going to be responsible, apart from the United Nations Commission, for refugees arising out of the fighting in Korea. I can assure the right hon. Member for Saffron Walden that, where they do not come under I.R.O., as far as the major bodies of refugees are concerned, other action is being taken over them, as in the case of Palestine refugees.

This Debate, which has been largely devoted to foreign affairs this evening, has not aroused much controversy. Compared with that on home issues, controversy has been negligible. That does not mean, necessarily, that views are not held on both sides of the House which have not been expressed today; but I think we are united in the belief that the action which was taken in Korea was the correct action, that it is ending in a satisfactory manner, that it has enhanced the value of the United Nations and the principle of collective security, that the measure of recovery which has taken place in this country is enabling us to take an even stronger lead in international affairs, in foreign policy, and that the measure of recovery in this country will contribute greatly to the economic development and recovery of those countries in South and South-East Asia and elsewhere. I do say that foreign policy, based as it is on collective security, on the one hand, and building up our strength on the other, combined with economic recovery here, is bringing satisfactory results.

7.43 p.m.

Lieut.-Colonel Sir Walter Smiles (Down, North)

I shall come later in my speech to what the Under-Secretary of State said but, first, I would like to say a word or two in answer to what the hon. Member for Davenport (Mr. Foot) said about India. I went out there in 1904. As a non-official I was encouraged by the company I was in, to join local councils. I can remember an I.C.S. official there, who presided at my first meeting, saying, "I welcome you to the council, but you must remember that England is determined to lead India on the road to self-government." That was their intention, and that was said in a little place hardly known to any person living outside the immediate district.

That was the object right through, whoever was in power here, whether Liberals, Conservatives or a Coalition. They progressed on those lines. The father and uncle of my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) gave their lives to India. Let us remember Lord Halifax who was then Lord Irwin. He tried all the time, steadily and conscientiously, to put India on the road to self-government. When the last vote was taken in the House here to give India self-government I voted with the Opposition, against my own Leader. What the hon. Member for Devonport said about the British Raj is completely unfair, and gave no credit to generations of British who worked in India's interest.

In this connection I might mention the earthquake in Assam. I should like to ask whoever is to speak for the Government later, what help is being given to India in connection with the recent terrible Assam earthquake, the worst for 100 years. I know they are short of transport, river steamers and rolling stock and anything that the British Government could do in that line would, I know, help the poor people there.

I regret that there is no mention in the Gracious Speech of the idea of the United Nations having a small army, a little striking force of their own. I remember mentioning this some 20 years ago to the late Lord Londonderry, the man who helped to put in the air the first Hurricane aeroplane. He said, "I know of that idea. It was the late Lord Davies, of course, who originally brought the idea forward. It is a great ideal, but I shall be dead before we ever see its realisation." He added, "I think it is more important for the country today to have good fighting aeroplanes." Lord Londonderry is dead, but now may be the time to put forward that idea again—an independent striking force, recruited by and under the orders of the United Nations.

I think the Under-Secretary of State mentioned success in Korea. We were in a singularly fortunate state in Korea. We had a great United States Army only "just across the road," in Japan, and they were able to come to the aid of South Korea quickly and were assisted by ourselves, the British Commonwealth and other people. Will that sort of thing happen again? Can it happen again? I very much doubt it. I should like to see the idea of the late Lord Davies being supported by our representatives in the United Nations because in the next case of aggression help may not be as quickly available.

When the United Nations Charter was being discussed in this House, in 1945, there were 100 Members who put their names to a Motion on those lines. If they are here today I would like to see those 100 Members still supporting it. We must thank the United States of America for their able and generous help in Korea. Between 1815 and 1915, it is fair to say, the British led and policed the whole world. In those 100 years there were no disastrous wars like the last two that have occurred.

It was good to hear from the Under-Secretary of State about the new powers it is proposed to give to the General Assembly of the United Nations. I am quite sure everybody on this side of the House will support him most loyally. There is no doubt that the old League of Nations failed, but the United States of America was not a member of the League when that happened. Finance is, of course, most important. Indeed, when the hon. Member for Devonport was speaking about finance a few moments ago, I thought he was the very man to speak alongside Lord Mackintosh on savings, although a capital levy may not always encourage saving. One of the reasons the League of Nations failed was that all the nations did not pay their subscriptions. Any club or organisation will fail if members do not pay their subscriptions.

Let us consider the defence costs we have to foot in the next year. We are on the way to spending £1,000 million on defence. If we go on like this, our standard of living will fall, because it will be necessary to spend all our money on defence. High taxation and a low standard of living assists Communism. It would be a splendid insurance policy to put some 2 per cent. of that £1,000 million —I do not think it will need more—to the creation of a small striking force for the United Nations. Such a force could be ready, just as firemen are ready and slide down the station poles, buttoning their coats on the fire engine as they go, when they are called to a fire.

It will not be the case next time of being able to wait a month or so. Even on this occasion South Korea nearly fell before aid came to it. It will be a matter of perhaps only a week next time and we should make sure that the action is fought on the aggressor's territory and not on that of the people we are to defend. Those people may say, as perhaps the people in South Korea are saying, "Lord save us from our friends," because their country may be laid desolate. I remember when, in 1916, the Russian army went in to Roumania to save the Roumanians. They tore the doors off the people's houses and burned them in the snow. I can quite understand some of the Roumanians saying that their allies were just as bad as their friends.

When these battles come to be fought in the future we should endeavour not to fight on the territory of the people whom we have to defend. Think of the countries who might join an organisation such I have referred to, and subscribe to it. Some nations in the First World War "sat pretty." Holland came out of the First World War a rich nation. Sweden and Switzerland have come out of it well in two wars. In the last war, of course, Holland was attacked. I can understand Sweden's position. She is right on the borders of Soviet Russia. I understand that there was a Swedish film star, Miss Greta Garbo, who used to go about saying, "I want to be alone." I believe that is a Swedish characteristic; they want to be alone. They have certainly never joined up very much to fight the aggressor.

This is a matter for everybody. I have not heard that the South Americans are taking much part in the defence of Korea. We want them all—Brazil, the Argentine, and even Spain, despite all this controversy about her—and no colour bar, either. It is a case for individual enlistment. Of course, people would say, "Who would command this army? You want a great name." I know a man whom I should like to see at the head of this army—Field Marshal Montgomery, because he is a man completely devoid of ambition or self-interest. All he thinks about is serving this country and the world.

France at the moment is reluctant to allow Germany to re-arm. I think France is prepared to allow Germany to re-arm up to battalion strength. That is almost too big, in my opinion. I think that German individuals should be able to enlist in the United Nations army. But it is very dangerous to allow Germany to re-arm on her own. Reference has been made to a regional army, a European army. That is not an ideal; it is a dangerous policy. What about a Pan-American army or a Pan-Asian army or a Pan-African army? All those possibilities occur if one starts a European army. Only a force such as I have advocated, complete with their own aircraft and ships ready to go into action at the drop of the hat, will secure peace for the world.

Already, the Chinese armies are on the march. I know that our Government have recognised China, and there is controversy about this, but my belief about the Chinese armies is this. During the past 30 years there has been nothing but civil war in China, and the different war lords there have gathered armies together. They write letters to each other; one says, "I have got 20,000 men"; the other fellow has got 10,000 men, and the 10,000 join up with the others without a fight. The population of China is so great that these armies are going over the country eating all that is in it. Now the new Government in China say, "We cannot dissolve these armies at once. If you have got to eat or loot do it in some other country, not in China." So they start in Korea. They are trying to get into Indo-China already. [An HON. MEMBER: "No."] One of my hon. Friends disagrees with me. It is a good thing when somebody disagrees with me when he is on the same benches as myself. At any rate, it shows that he is listening.

How are we to defend Tibet? It is absolutely impossible. I am sure that Mr. Nehru, who, like Nelson, has been turning a blind eye to aggression in Korea and Indo-China, is getting a bit nervous now.

Mr. Sorensen (Leyton)

No.

Sir W. Smiles

Another hon. Member disagrees with me. That is a very healthy sign indeed.

Mr. Sorensen

Is the hon. Gentleman aware that India voted with the rest of the nations at Lake Success in condemnation of aggression in Korea?

Sir W. Smiles

Perhaps I have not been reading my papers properly, but I have not heard of Indian troops in Korea or on their way there. I have read an American paper about Indonesia. The Americans supported the Indonesian case against the Dutch, but I understand that not one American destroyer could get any oil or food in Java from the new Indonesian Government. My hon. and gallant Friend the Member for Macclesfield (Air Commodore Harvey) and the hon. Member for Leyton (Mr. Sorensen), who have both disagreed with me, may correct me if I am wrong. I suggest that in 1950 a completely new military technique is required. We know the destruction wrought by an advancing army we have got to strike even more speedily and more effectively than even the United States Army did when it went into battle in Korea.

7.56 p.m.

Mr. Carmichael (Glasgow, Bridgeton)

As has already been said in our deliberations today, we are covering a very wide field. We have been discussing our foreign relationships and we all recognise that the subject is closely linked with our economy at home. I do not wish to follow the hon. and gallant Member for Down. North (Sir W. Smiles), in any detail, but I was very happy when he indicated his support for the unity of Korea. I wish that some day he would exercise his influence for the unity of Ireland. It would be very helpful.

Sir W. Smiles

We should be very glad if the South of Ireland would join up with the United Kingdom.

Mr. Carmichael

I do not wish to digress, but I think the first step should be towards a united Ireland, before we take any steps towards a larger unity.

Like many, I am a bit happier about the Korean situation than I was a few weeks ago. It is quite clear to every hon. Member, and I think to the country in general, that the military aspect is almost over. I fear, however, that, while the Under-Secretary today indicated that the United Nations are watching the situation there, the President of South Korea has far too much power. His intimation that he has already appointed governors to many parts of Northern Korea seems to me to be challenging the whole policy of the United Nations in Korea. I wonder why the United Nations have not called a halt to his conduct. My view is that there will always be a great danger in Korea while this man has any authority of any kind.

Let me turn to the proposition submitted today with regard to re-arming Germany. We are living in a very strange world. Only a few years ago we were united with Russia, many convinced that not only had we to destroy the German army but that the Germans had an attitude of mind, a military mind, that could not be destroyed even if we took their army away. We had to begin a process of re-education.

I have heard it said from both Front Benches that we needed to re-educate the German people until we had destroyed the military mind. But what have we today? It is suggested that the Germans should be allowed to have something like 10 divisions in a European army. What for? In order that they might line up to stop aggression. But surely we went to war in 1939 to stop aggression. Are we to believe that the very many people whom we fought in order to destroy aggression are now capable of linking up with us to destroy the very thing of which they were the creators? I believe the Germans are a great people, but I think we are approaching the problems of Europe far too much with a military mind. It is time to call a halt.

I do not think all the fault is on the side of Russia. I do not accept the philosophy of the Russian Government, nor do I accept the theory of the Communist Party in power in Russia or in any other part of the world, but I believe there is far too much loose talk about the principle of Communism. I say that there is grave reason for the Russians to be suspicious of the United Nations. Let us put ourselves in the position of the Russians. The British Foreign Secretary leaves these shores to go to the United Nations Assembly but, in his journey, he attends two other meetings. One was a meeting of the Western Powers held to consolidate the military forces of the Western Powers against a possible aggressor. We do not give away any secrets when we admit that we regard Russia as the possible aggressor. Thus, the Foreign Secretary attends a meeting of the Western Powers to prepare the defences against Russia. That meeting is followed by a meeting of those associated with the Atlantic Pact. Again, the meeting is held because of the fear of someone building military forces more powerful than those of the Western Powers.

There may be very sound reasons for doing that, but let us consider what must be the attitude of mind of the delegates of Russia at the United Nations Assembly when those same people who have taken part in the Western Powers argeement and in the Atlantic Pact agreement assemble together in the chambers of the United Nations to devise ways and means of preventing war in any part of the world. The Russian delegates are bound to be suspicious, and I believe that in the last few weeks suspicion has been increased by the propaganda in support of the rearming of Germany I believe it has been further aggravated by the declaration yesterday of the inclusion of Spain in the General Assembly.

Mr. Ernest Davies

Spain has not been included in the General Assembly at all. In the Political Committee yesterday it was voted that the Resolution on the withdrawal of ambassadors from Spain should be rescinded, that Member States should be free to send their ambassadors back and that Spain should be invited to reciprocate, if she so desired. There was no question of Spain being invited to join the United Nations.

Mr. Carmichael

I accept the procedural correction, but anybody will recognise that that is the beginning of the recognition of Spain. If we are prepared to admit ambassadors, then it is the height of folly to keep Spain out of the larger Assembly. Once we have accepted that, then geographically a very strong case can be made for the arming and equipping of the Spanish army to link it up with the Western Powers. I cannot understand how that can be squared with the principles of the free democracies.

I suggest that at this point our Foreign Secretary and the people responsible for our foreign affairs should try to devise ways and means of getting closer to the Russian people. It has been admitted in this House on more than one occasion that the people of Russia fear war as much as do the people of any other country. We should seriously consider the proposal made by the Russians for the complete withdrawal of all the occupying forces in Germany. After all, we shall not stop Communism merely by military power.

Some hon. Members have argued that Russia is engaged only in a cold war and that she has no intention ever of engaging in open military conflict. Let us be careful and watch that, in the process of the cold war, we do not rebuild our armaments to such an extent that we destroy even our own welfare State, because that is the situation which we face in connection with our foreign relations and the building up of armaments.

Until now the Government have done a remarkable job, both in the foreign field and in our home affairs, but we are now at a most critical stage because, in strengthening our armed forces we are in grave danger of destroying any gains we have made in the last five years. I do not want to argue with hon. Members opposite about what they have done in the past and what we have done in the last five years. The point is, what are we going to do in the years that lie ahead?

Hon. Members

Hear, hear.

Mr. G. Thomas

There is always a cheer from hon. Members opposite for that.

Mr. Carmichael

While saying that, I cannot shut my eyes to the sins the Opposition have committed in the past. As in the case of the judge in court, the sentence is sometimes given according to the past record.

Mr. Jennings (Sheffield, Hallam)

The hon. Member is telling the old, old story.

Mr. Carmichael

I want now to deal with a few aspects of home affairs which I think are important. Very great play has been made with housing. The Opposition intend to build 300,000 houses a year if they have the opportunity. [HON. MEMBERS: "Hear, hear."] Why do not they make it 400,000? That would have been double the present target. But I am not concerned about the Opposition building 300,000 houses. My concern is that I do not want the Opposition ever to occupy the Government Benches. I realise that, as a political force, they will play on the misfortunes of the people; I know they will do that. In my opinion we have to prevent that from happening, if it can be done, by action by the Government themselves.

First of all, I will deal, in particular with housing in Scotland. I know that legislation cannot construct houses, but I think there is a serious gap between those responsible for the legislation, those associated with local government and those who are responsible for the actual building. From time to time members of the trade union movement meet the appropriate members of the Government to discuss our domestic and economic problems, but I want the co-operation to be closer than that. In my view, in great cities like Glasgow there should be regular meetings between members of the trade union movement in the building industry and the local authorities.

I even go to the length of suggesting that Members of Parliament should be associated with such meetings, so as to bring back from time to time the views of the people in the industry. I suggest that because, in my view, the operators are still afraid that if they speed up production they will be in grave danger of becoming unemployed. The only way of obtaining increased production in the building industry is, first of all, to have a closer unity between those who are responsible for the legislation and the administration and those who are engaged in the actual building.

I take Glasgow because probably, with Liverpool, it has the most terrible housing situation in Britain. We are building something like 4,000 houses per year, but at that rate we shall not overcome our waiting list in the next 25 years. Yet we are advised, even by the appropriate officials locally, that the deterioration of present houses is at the rate of 5,000 per annum. That is a legacy from past Governments and past local authorities. Nobody can deny that. But people are living in the vilest conditions and great danger in the City of Glasgow, and I think there are far too many people in the building industry not directly engaged in building houses. I think something should be done to pool them for this great task, and I ask the Secretary of State to look after the Scottish side of it. The same problem exists in England, but I do not want to intrude upon the discussion of the English Members on housing in England—except to say that I disagree very strongly with the approach of my hon. and learned Friend the Member for Northampton (Mr. Paget) to the housing problem.

My last point is about the increased cost of living. I think we have had loyalty from the poorer paid artisans even the most optimistic were not entitled to expect. Men living on under £5 per week have been going through an extremely difficult time. I think we have got to get much closer to the trade union movement. I am still a trade unionist, and so I would offer a word to the trade union movement and to the hon. Member for Southend, East (Mr. McAdden), who spoke yesterday on incentives and differentiation.

In my view, the critical economy of the country is such that when the lower paid workers are rightly seeking an increase in their wages they ought not to be unduly prejudiced by the higher salaried or higher paid earners. One of the tragedies of the lower paid workers during the last two years has been that they have been handicapped in seeking increases because of the attitude of the higher paid workers. I think the trade union movement will require to understand that if we are moving towards a period when we are attempting to get equality in our social life the whole structure and approach of their union movement must be considerably altered.

In talking of the cost of living my hon. Friend the Member for Devonport (Mr. Foot) has already mentioned the old age pensioners. They must not be overlooked. It may be argued by the actuarial experts of the Ministry of National Insurance that it is quite impossible to take money from the insurance fund to increase the allowances. If that is the view of the actuaries, then I will accept it. However, we established the National Assistance Board so that we should be able to compensate people if the insurance fund could not meet the claims. A few months ago we had new regulations introduced in connection with the Assistance Board. I criticised them then because I felt they were quite inadequate. In the last few months the cost of living has risen steadily, and I do not think we are asking too much of the Government when we ask them seriously to consider bringing in new regulations to increase the scale for the very aged and the sick people of the country.

If I made any criticism of the Government in either the foreign or the domestic fields it is because I feel that their work in the last five years has shown that they are capable of doing a big job for this country. I know that the manœuvring in the debate is associated with the possibility of an early election. I hope we shall not lose sight of that on this side of the House. This Parliament is in a very precarious position, with sickness saving it now and again. I have never accepted the view at any time in my political life that the last word must be said either from the Government benches or from those Opposition benches, and I hope that the Government, when preparing legislation, will not merely take stock of the possible opposition in this House but will also take stock of the possible reaction in the country.

This Government came into power because of the great agitation over the last 50 years that a real attack should be made on the poverty among the mass of the people. I hope we realise that this poverty is still there, although there has been some remedying of the position. I hope we shall not pay much attention to the hon. Member for Epping (Mr. Nigel Davies), who suggested that we should reduce the tax on the Supertax payers. If I had anything to do with it I should increase it. But I am concerned with the fact that the Government have an opportunity of going to the country at either an early or a late date, and I want them to do so conscious of the fact that they can still have the good will and support of the mass of the people. Let the Opposition not be too confident. They made a great noise about Scotstoun in the recent by-election. Well, it was their own seat. Yet 6,000 who voted at the General Election failed to vote at the by-election.

Mr. Nabarro

Where was Morgan Phillips?

Mr. Carmichael

He was probably looking after opencast coal.

I say that those 6,000 abstentions are a very important consideration in a democracy. It is our job to win that 6,000. I think we can do it. I think it would be a serious disaster to this country and to the possibility of world peace if anything happened, either in legislation or in an appeal to the country, that made possible the return of the Tories to power.

8.17 p.m.

Mr. Reader Harris (Heston and Isleworth)

I always listen to the hon. Member for Bridgeton (Mr. Carmichael) with interest and respect, and he has not disappointed me tonight. He will not, obviously, expect me to agree with everything he has said; at the same time, I must express my appreciation of his concern about the housing position, the cost of living, and the poverty of many people in these islands. He is a very brave man, because he was one of the few speakers in this Debate—I have listened to nearly all the speeches since the Debate began, and nearly all of them mentioned housing—who, in mentioning housing, made a constructive suggestion; and I think that anybody who makes a constructive suggestion about how to deal with the housing problem, is rendering a service not only to the House but to the country.

There have been three concrete suggestions that I have heard about how to deal with this housing problem, and I shall come to them in a moment. I speak tonight for the electors of Heston and Isleworth who sent me here, and I think I should be failing in my duty if I did not first make it absolutely clear that the housing problem in my constituency, as in many others, is the most desperate problem. It is a problem which distracts me as a Member of Parliament, let alone the people who are actually suffering. Like so many Members of this House, I have a "surgery" on Friday nights. It begins at 7 o'clock, and I come out about 9 o'clock absolutely distracted. There is no other word for it. I have had bus conductors come in tears; I have had policemen come in tears; I have had women come in tears. I have had men come to me and say, "Unless you can get me a house in a month, I am going to have a divorce from my wife. We cannot live together any longer in one room with three children."

I could keep the House a long time describing some of the terrible conditions in which my constituents have to live—and I am quite prepared to believe that my constituency is by no means the worst. In Heston and Isleworth we have a housing list of 5,000 people being added to at the rate of 60 a month, and our allocation for this year by the Minister of Health is 150 houses against 200 last year. Now at this moment I am not casting blame on anybody. I am doing my best to try to make some constructive suggestions for the future.

Mr. Manuel (Ayrshire, Central)

What about the past?

Mr. Harris

We have nothing to be ashamed of about the past. [HON. MEMBERS: "Oh!"] Most certainly not. We have nothing to be ashamed of in the building of houses in the past. In Heston and Isleworth an enormous number of houses were put up before the war by the Conservative local authority. We have large council housing estates built before the war, although I might mention that today many of those council houses are too expensive for the people who live in them, but I will say nothing about that at the moment.

Mr. Harrison (Nottingham, East)

Can the hon. Gentleman explain how it comes about that in his constituency they are so short of houses today if they built so many before the war, unless there has been a large increase in the population? What is the cause of the present shortage if they were in such a happy position before?

Mr. Harris

There has been, amongst other things, an enormous increase in the population. It is the fourth largest constituency in the country. We have a population of 104,000 now as against 80,000 before the war.

Some practical suggestions have been made about how to deal with the housing problem. I thought that the hon. Member for Kirkdale (Mr. Keenan) was a very brave man when he said "Let us stop all building except that of houses. Stop the building of schools and hospitals. What is the point of having these things unless you can have the houses?' In my constituency the situation is so desperate that I will support him in that, because it seems pointless to go on building hospitals to house ail the people who are being made ill as a result of bad or insufficient housing. Yesterday the hon. Member for Ayrshire, South (Mr. Emrys Hughes) said that the housing situation was so desperate that building operatives should be exempted from military service alongside miners and agricultural workers. I know that many other sections of the population would be very annoyed if that happened, but again it is an expedient that I am prepared to accept if only we can deal with the housing problem.

Mr. Manuel

I should like to understand more clearly the attitude of the hon. Gentleman towards education. Do I take it that he is now associating himself with the opinion that on the vast housing estates now being built the plans made for the schools should not be proceeded with; that the children living on those estates should not be educated, or alternatively that more transport should be used to take them to schools which could not take them in any way?

Mr. Harris

My suggestion is that temporary buildings must be used for all these things until we have built the houses. I will support offices and businesses being moved into temporary buildings. When I went round the Continent last year I saw that in a number of places the type of pre-fabs in which we have people living were being used as offices, while the people were in traditionally built houses. I should like to see an extension of that principle here. I urge the Government to recognise that one of the reasons they lost so many seats at the last General Election was because of their failure over housing.

The rising cost of living, which the hon. Member for Bridgeton also mentioned, is of the utmost importance, and I am sorry that there is no mention in the Gracious Speech of the part that the nationalised industries have to play in keeping the cost of living stable. I thought that the Under-Secretary was a little smug and complacent when he spoke of the attitude of Europe towards what he described as our amazing recovery and the maintenance of our standard of living. I cannot see that our standard of living is being maintained. I think that poverty in this country is at the moment getting worse because of the increase in the cost of living.

I find myself wishing that every Minister in this Government could have the calendar which was printed in yesterday's "Daily Express" enlarged and put on his desk, and a copy also put on the Table, so that they might see the large number of items which have gone up during the month of October. There was an increase on every day last month. On the 1st of the month it was fares; on the 2nd it was tyres; on the 3rd, rice; on the 4th, children's raincoats; on the 5th, baby wool; on the 6th, batteries; on the 7th, dustbins; on the 8th, chocolate; on the 9th, costumes; on the 10th roll-ons, when 8d. in the £ went on the shop price; on the 11th, oil; on the 12th, cotton—on the 13th, a forecast of high prices of turkeys for Christmas.

Mr. Hector Hughes (Aberdeen, North)

The hon. Gentleman is reading from a daily newspaper. Can he vouch for the accuracy of the figures he is giving us?

Mr. Harris

There has been no denial from any official source of any of these increases.

Mr. Hughes

Is that not yesterday's paper?

Mr. Harris

Yes, yesterday's paper.

Mr. Hughes

There has been no opportunity for a denial.

Mr. Harris

I am at 14th October and I am going to go to 31st October. On the 14th it was toys that went up; on the 15th, eggs; on the 16th, stockings; on the 17th, men's utility suits; on the 18th, newsprint; on the 19th, shoes; on the 20th, knitwear; on the 21st, utility furs; on the 22nd, biscuits; on the 23rd, shirts; on the 24th, cotton; on the 25th, thread; on the 26th, coffee; on the 27th, pyjamas; on the 28th, wallpaper; on the 29th, cardigans; on the 30th, carpets; on the 31st, tobacco; and next week it is going to be sausages. That is just one month. What will November be like? What will December be like?

I ask pointedly: What contribution are the nationalised industries playing in keeping down the cost of living? A few days ago we had a debate on the Report of the British Transport Commission—the second debate we have had. For two years running now we have had the unedifying spectacle, as my hon. Friend the Member for Monmouth (Mr. P. Thorneycroft) described it, of one nationalised industry spitting at another. Coal goes up in price so, of course, it costs more to run the railways, and as soon as it costs more to run the railways freight charges are put up and it costs more to transport the coal, so coal goes up. Ninepence is put on the cost of a gallon of petrol in order to pay for the Health Service, amongst other things. [HON. MEMBERS: "No."] It does. As soon as 9d. is put on the cost of a gallon of petrol it costs more to run London's buses, so the people cannot afford to use the buses and have to walk or cycle a bit more, their health deteriorates and they need the Health Service a bit more. So we are back again where we started. It goes on like this all the way round. Since the cost of coal goes up, so up goes the cost of electricity and gas, and some people cannot afford to use so much of them.

I always understood that the basic industries of this country were to be nationalised in order to keep the economy of the country stable. But we have not economic stability; we have economic chaos. I suppose that is because we have so many economists on the Government Front Bench. I always think an economist is a man who, in order to save the wear on his two guinea shoes, takes longer strides and thereby splits his three guinea trousers.

A few days ago, when I was trying to keep in touch with my constituents, I tried to find some words wherewith to describe the last five years of rule by the Socialist Government and I came across some words which I thought I could use almost without alteration. They are as follows: The people … accepted the election promises of the leaders of the"— Labour Party— at their face value. So the 'hard-faced men who had done well out of the war' were able to get the kind of peace that suited themselves. The people lost that peace. And when we say 'peace' we mean not only the treaty, but the social and economic policy which followed the fighting. In the years that followed, the 'hard-faced' men and their political friends kept control of the Government. They controlled the banks, the mines, the big industries. … They controlled the means by which the people got their living.… Great economic blizzards swept the world in those years.… They were the sure and certain result of too much economic power in the hands of too few men. These men had only learnt how to act in the interest of their own bureaucratically-run … monopolies which may he likened to totalitarian oligarchies within our democratic State. That was the description in "Let us face the Future" of life in this country after the First World War and, with hardly any alteration, it just about describes the last five years. [HON. MEMBERS: "Oh."] Yes, indeed. What better description could there be of, for example, the British Transport Commission than, "A bureaucratically-run monopoly, which may be likened to a totalitarian oligarchy within our democratic State"? It is a perfect description of the London Transport Executive.

It is a matter of regret to me that there is no mention in the Gracious Speech of methods whereby Parliament can keep some sort of control over the nationalised industries. The Gracious Speech contains the proposal that carte blanche powers should be given to the Government in regard to a matter about which we feel strongly, but there is supposed to be the saving provision that they shall be subject to adequate Parliamentary safeguards. At the moment there are no adequate Parliamentary safeguards whatever over the nationalised industries. Many of us on this side of the House want to make some constructive suggestions as to how, for instance, the London Transport Executive could run their buses a little more efficiently. Londoners are beginning to realise that the integration of inland transport means that they have to stand a great many of the losses in running transport throughout the country.

People in my constituency, which is about 12 miles from the centre of London, are having to pay 2s. to 2s. 6d. a week more as the result of the increase of fares on 1st October, and they do not like it. Some of us feel that London is being made to pay rather more than its fair share. People are beginning to realise that the integration of inland transport simply means that there is one banking account for the whole lot, for the London transport system, the railways, the docks and the road transport service, and that London has to contribute to a common pool.

Some of us want to make practical suggestions. We are not out to wreck the London Transport Executive. It is there and has to be made to work. How can we do so? We cannot ask Questions in the House about it. Some of us would like to suggest that if London Transport wants to take more money it should do away with the 1½d. fare and revert to the 1d. fare, even if it means reducing stages a little. The London Transport Executive is losing a lot of money over the difficulty of collecting the 1½d. fare. There is a station in my constituency which is the terminus for the buses as well as for the underground railway, and people come off the railway and get on the buses and go off to a housing estate, a run of four or five minutes in the bus. The conductor just has not a hope of collecting all the fares. He collects a third of them if he is lucky.

Mr. G. Thomas

Is the hon. Gentleman suggesting that his constituents are dishonest?

Mr. Harris

Certainly not. I am trying to be practical, and hon. Members on both sides of the House know that I am speaking the truth. [HON. MEMBERS: "No."] Yes, it is so. A lot of fares are not being collected in cases like that. I have given only one instance. We should like to make suggestions to the London Transport Executive, such as the use of combined season tickets for trolley buses, ordinary buses and the underground railway; but we can make no suggestions like that at the moment, and there are no adequate Parliamentary safeguards for the nationalised industries. It is a grave omission from the Gracious Speech.

Now I come back to the point that the nationalised industries are not contribut- ing towards a stable economy. They are not contributing towards a reduction in the cost of living; if anything, they are increasing it. That is serious, particularly when the Government are proposing that if they get returned to power again they will nationalise still further industries.

Mr. Ivor Owen Thomas

The hon. Gentleman has mentioned the present position arising out of the nationalisation of certain industries and, particularly, the coal industry. Would he indicate at what period in the years between the two wars we had anything like stable satisfactory conditions in the coal industry, a contented mining population, and an efficient industry answerable to anybody else but its shareholders?

Mr. Harris

Of course, there was no security before the war because there was great unemployment. [HON. MEMBERS: "Exactly."] But it is incontrovertible that although there was widespread unemployment in all industries before the war, the Socialist Party had not the slightest idea how to get rid of it. This point needs to be rammed home throughout the country. [HON. MEMBERS: "Nationalisation!"] Nationalisation does not get rid of unemployment. Let that be well understood. A great deal of the economic stability that we have been enjoying in this country since the last war as compared with the previous war is due to the enormous amount of help we have had from America and our own Empire. Let that never be forgotten.

Now I come back to the point of unemployment. It is essential that everyone should recognise that before the last war nobody in the country knew how to deal with unemployment. There were all sorts of theories. Lord Keynes eventually came out with one in 1936, but the Socialist Party did not adopt it. It was being studied. Everyone was thinking about it, and during the war it was embodied in the White Paper on Employment issued in 1944 under the leadership of the right hon. Member for Woodford (Mr. Churchill). However, we still do not know whether that theory works because it has not been put to the test. So I do not think it is a fair question to ask about conditions before the war, because even though the Government then in power may not have done as well as this Government have done, the fact is that nobody was very wise in those days.

Mrs. Middleton (Plymouth, Sutton) rose——

Mr. Harris

I cannot give way because I have to sit down so that others may speak. I will conclude by saying that in the bible of the Socialist Party: "Let us Face the Future," I see the classic words: Each industry must have applied to it the test of national service. If it serves the nation, well and good; if it is inefficient and falls down on its job, the nation must see that things are put right. That is the opportunity we seek for this honourable House.

8.39 p.m.

Mr. Granville West (Pontypool)

I am sure that hon. Gentlemen on all sides of the House have enjoyed the speech of the hon. Member for Heston & Isleworth (Mr. R. Harris). We have enjoyed it not so much for its content but for the quips he so lightly made in the course of it. I thought the hon. Gentleman was in some difficulty, when he was dealing with housing in saying that there were mounting waiting lists for houses. It is perfectly true. But why are the lists mounting? It is not because this Socialist Government are pulling down houses. The real answer is that they have so provided full employment and raised the standards of life that many more people now desire decent homes in which to live. In the years before the Labour Government came into power many families had not the means with which to pay rent for a decent home and were herded together in overcrowded conditions. Therefore, to suggest that the Government have not done much to relieve the suffering of the people is to deny the obvious truth.

The hon. Member also spoke about poverty getting worse. Does he really mean that?

Mr. R. Harris

Since I am asked, my answer is "yes."

Mr. Granville West

All I can say is that the hon. Member really has not had very much experience of the conditions prevailing in constituencies in South Wales, Monmouthshire, and other industrial areas. If he had had any such experience he would have known that the lives of people in those areas have been completely transformed by the Labour Government.

However, the subject on which I wish to detain the House for a short time is related to the statement by the hon. Member about too much power being in the hands of too few people. I will deal with that in relation to that part of the Gracious Speech which hon. Members on this side most particularly welcome—the proposal to extend the building leases which are now falling in. Those of us who have been concerned with this problem know full well that, although the hon. Member did not intend his remarks to be taken in this way, too much power has, in fact, been concentrated into the hands of too few people.

One of the most evil and vicious consequences of the building lease system is due to that. The monopoly which has existed in various parts of the country has so enabled the landowner to exercise his powers that he has prevented people from buying land on which to build their houses, and has insisted upon their taking a building lease, not out of any consideration for the tenant, but to extract from him the best rent that the landlord could obtain at the time. Now we find, after the passing of the years, that many of these building leases are falling in and that the monopolistic landlords are gathering in not only the land which they let upon the building lease system, but the houses erected upon it by the lessees.

Mr. Geoffrey Wilson (Truro)

Would the hon. Member agree that leasehold in its origin was a means of enabling the development of settled estates where the tenant for life had no opportunity of selling, and that, therefore, had there been no leasehold there would have been no development?

Mr. Granville West

If the hon. Member will go a little further back into history he will find that one of the reasons for the creation of long-term leaseholds was that it was one method of evading the usury laws. That is one of the origins of the leasehold system.

Mr. Wilson

How long ago were there usury laws in this country?

Mr. Granville West

If the hon. Member has forgotten the excellent work of Cheshire on Real Property. I would recommend him to read it again.

Those of us who have taken an interest in the problem of the building lease system have been very much concerned with the great pressure which has been imposed upon the building lessee. The Government, in the Gracious Speech, have now given to the building lessee some encouragement and hope which have been denied to them over the years. The Labour Government set up a leasehold committee to investigate the problem. It is true that other Governments have set up similar inquiries and those committees of inquiry recommended to the Governments of the day that leasehold enfranchisement should be brought into operation.

Mr. Bowen (Cardigan)

Will the hon. Member agree that in the meantime, right up to date, Socialist councils throughout the country have continued to grant building leases?

Mr. Granville West

I do not know whether the hon. Member is trying to suggest that local authorities, under the powers conferred upon them by Conservative and Liberal Governments, have not exercised the powers entrusted to them, or whether he thinks that they should not have exercised the powers the Governments have imposed upon them. What I suggest is that the building lease system has no place whatever in the conditions of our modern society. For my part I would like to see the building lease system completely abolished, so that no building lease could be granted in the future.

We have had the advantage of considering the Leasehold Committee Report, of which the hon. Member for Cardigan, (Mr. Bowen) was so distinguished a member. The hon. Member was a member of the majority who reported upon it and I must confess that, having read that Report with some care, I have not found any statement of the case of the building lessor stated more persuasively than was done by the hon. Member and his colleagues in the majority on that Committee. In fact, the grounds on which they claimed that it was improper to interfere with the building lease system were, first, that it would interfere with the fundamental rights of property and freedom of contract. I had the privilege of submitting a memorandum to the Leasehold Committee and giving evidence before it. The hon. Member will probably remember that I referred to the inquiry of the Land Inquiry Committee who stated in their Report that the introduction of the system has only proved possible where landowners were few and have acted in actual or tacit combination. Its parents are the monopoly of the landlord and the necessity of the tenant and it has created all the evils of land monopoly. I also referred in that memorandum to the view of Sir Frederick Pollock in his celebrated work "The Land Laws," in which he said that it was absurd to speak of freedom of contract in relation to such a system.

Any of us who have had anything to do with the building lease system know full well that in areas where the landlord had a monopoly of land and a person wanted to have a plot on which to build a cottage or house he was confronted with the building lease, and he either had to accept it or do without the land. There was no question of negotiation or of the lessee discussing the terms in the lease. Indeed, in the constituency of the hon. Member for Monmouth (Mr. P. Thorneycroft) I have seen leases in which a clause providing that the property and house built upon it shall be forfeited to the landowner if the lessee at any time embraces the Roman Catholic religion. Yet they talk about freedom of contract.

The second point on which they argue in favour of retention of the building lease system is that it is useful to the community as a means of planning and to the lessee as a means of financing development. How the hon. Member, who was a member of the Committee, could subscribe to the view that the building lease system is today an instrument of planning, I fail to understand. He knows full well that under the Town and Country Planning Act, town and country planning committees have been set up, and that it is not possible even for the ground landlord to build a house unless it is sanctioned by the planning committee. When the hon. Gentleman and his colleague talk about the instrument of planning which the ground landlords exercise, it is the very negation of truth. They cannot exercise any planning control at the present time, and I suggest that if any planning is to take place it can more effectively be done by a planning authority than by the landowner who is concerned more about his profit than he is about amenities.

Mr. Bowen

I am reluctant to interrupt the hon. Member again, but why did the Ministry of Town and Country Planning oppose leasehold enfranchisement? Why is the policy of the Government in relation to the new towns such that it embodies a leasehold system?

Mr. Granville West

I entirely agree that the New Towns Act enables the new towns corporations to grant building leases, but I do not care whether it is a Government Department, a local authority or a private landowner, I am against the building lease system. Until we have a complete change in its entirety in the ownership of land, I say that the building lease has no position whatsoever in modern society.

The hon. Gentleman the Member for Cardigan will agree that there can be no truth in the suggestion that the landlordism of old has been responsible in many parts of the country for very good development. Let him go into the industrial valleys of Monmouthshire, so well-known to the hon. Member for Monmouth, and into Glamorgan and other valleys and towns in South Wales and examine the conditions there. Would either of the hon. Gentlemen say that the conditions of the dwellings built under building leases in these areas was any praise to the landowner? They are a disgrace, and, therefore, there would be little support for the argument that landlordism has been responsible for planning.

One further point I want to make is that the building lease system has only operated in those pockets or areas where a monopoly in land existed. The greater part of the country has been developed under freehold tenure. Will anyone suggest that in the other parts of the country where freehold tenure was in operation planning and development cannot compare favourably with the building lease system? I would ask hon. Members to compare the conditions of the industrial valleys of South Wales under landlord planning and the condition of the other parts of the country, where development has taken place under freehold tenure. There can be no comparison between them.

It is further suggested that the taking out of a building lease has enabled the lessee to get, by annual payments, something for which he would otherwise have to pay a capital price. There is no substance in that argument. In many of the cases which are now falling in, the houses were built by reason of assistance on mortgage, and I have not come across any mortgagee or building society which is not prepared to advance the extra purchase money to enable the property to be freehold against advancing the money on leasehold when they know that at the end of a given time it will revert to the ground landlord.

The last point upon which the Committee put the case for the ground landlord is the best of all. They say that grave hardship will he caused to freeholders through inability to find alternative sources of investment. The hon. Member for Heston and Isle-worth, who has now left the Chamber, was talking about the difficulties of poverty and the increase in the cost of living. He did not mention that today there are working people in all of the areas where the building lease system operates, who are now concerned with exorbitant demands from the landowners as a condition for their remaining in the houses, which they have paid for or which their fathers or grandfathers built at their own expense.

Fancy talking about the increased cost of living, and the cost of roll-ons being more, when the lease owner is imposing upon the lessee of a dwelling house a fine of £500 or £600 as a condition of his remaining in his own home! Can there be any justification for such a system in this country at the present time? I could tell the House of many cases of which I have personal knowledge where great hardship and anxiety has been caused to building lessees by the operation of this wicked system; and I am very glad to see in the Gracious Speech that proposals are being made which will extend for a time building leases now falling in until the Report which has been brought in by the Leasehold Committee can have full consideration.

I hope that the Government will reject of views of the majority of that Committee and decide in favour of a more radical scheme of enfranchisement; also that when they bring in legislation to extend building leases it will be to the effect of extending such leases upon the present terms and conditions, and to provide that the building lessee shall not he evicted nor held to ransom by the landowner, either by demands for dilapidations or of high premiums. I hope the Government will decide, in the legislation they propose to introduce, that building leases at present in existence will continue until a radical reform is brought about and that this will be done as soon as possible to abolish completely this wicked and pernicious system.

8.56 p.m.

Brigadier Rayner (Totnes)

I am very lucky to have been called to speak in this Debate, but it is more questionable luck to have to follow two such orators as the last two speakers. It is also rather difficult in this Debate which covers such a very wide field to go back to subjects dealt with some time before. I thought that tonight we were expected to talk about foreign affairs and defence, but we have talked about foreign affairs, housing and the cost of living. Therefore, I do not think I need make any great apology for harking back to the speech of the Under-Secretary of State for Foreign Affairs.

With reference to his remarks on Spain, in so far as he tried to justify the policy of the Government on Spain, I think his arguments were particularly weak. He referred, first, to the inability of our representative now at Lake Success to vote on the Spanish question. I felt that was rather an undignified line to take. Our present representative is the Solicitor-General and when the special committee were discussing the question of the future of one of our important neighbours, I think it would have been such more dignified if our representative had taken a definite line. Instead of that, it was left to the smaller countries, like Paraguay and other South American countries, and even to members of our Empire, to decide what was to be done, and this very great country was left sitting on the fence. The Under-Secretary of State also tried to justify the fact that we should have an ambassador in Peking and not in Madrid. I think that was the weakest argument I have ever heard.

I want to refer to the strategic value of Spain, a subject which has been dealt with to some extent by my hon. and gallant Friend the Member for Horn- castle (Commander Maitland). In that connection, the Minister rather suggested that at the present time the strategic value was somewhat unimportant. Of course, many of us would disagree with that suggestion. Today we give a great deal of thought to Western Union defence. We have not got much further than thought, because the difficulties are simply enormous. First, we must overcome the jealousy and suspicion which seem to riddle all questions of international co-operation. Then we must decide the question of responsibility. Although it has been suggested that there should be a Western Union Minister of Defence, no one seems to know to whom he should be responsible.

But far worse than those problems and far more difficult are the questions of the administration, the supply and the signal communications of a mixed force which talks a number of different languages. It will take a lot of time to solve all these questions, and no one knows how much time we have. Those of us—and there are quite a few in this House on both sides—who in 1940 saw the Belgium army overwhelmed and the collapse of the French army, and who made their get-away with difficulty, know perfectly well that that might easily happen again.

Therefore, as my hon. and gallant Friend suggested, one of the main requirements of Western Union defence is the preparation of a strong natural barrier behind which, in case of need and in the early stages, we could reorganise ourselves and wait for American reinforcements. One glance at the map of Europe is sufficient to show where that barrier exists. About three weeks ago I motored to Spain, where I have had certain interests for many years, and as from the vineyards around Narbonne I saw the peaks of the Pyrenees looming ever larger, I thought it was about time that we brought that splendid mountain barrier into our grand design of Western Union defence.

After passing from the rather strained tension of France into the easy, leisurely atmosphere of Spain, I made the same remarks to a Catalan friend of mine. I noted his reply in my diary so that I could quote it to the House. He said, "Oh, yes. We would make a most useful ally but you will not let bygones be bygones; your policy towards us is hypocritical and stupid, and we dislike you increasingly." Those last words were strong ones, and I think it would be profitable in this Debate to consider whether they were justified. I, like the hon. and gallant Member for Horncastle, do not want to bring this vexed question too much to the fore tonight. It has been altogether too controversial in the past.

Although some of us had strong sympathies in one way or another during the Spanish civil war, and some of us blamed General Franco for his contacts with Hitler during the great war, surely it is time to let bygones be bygones? We have forgiven the Italians, we have been generous to the Germans, yet the Spaniards, who did not bomb any of our towns or ships, or kill any of our warriors, but on the contrary rendered aid to many of our submarine and air crews, and prevented Gibraltar from being taken by the back-door, we still blacklist and boycott.

Then, referring again to my Catalan friend's attack, would the Spaniards make good allies as conditions are at the present time? Certainly they would, for many reasons. First of all, they are a Christian Power, and as the nations of Christendom stand on guard against the powers of evil centred in the Kremlin, we cannot afford to do without the help of a single Christian Power. Secondly, they are strong and virile. Not only do the Pyrenees make the Iberian Peninsula a natural fortress, but that fortress is garrisoned by an army of 400,000 men, with two million trained reserves. Moreover, these men have that courage and dash common to most Spaniards, and are therefore a good deal more dependable than some other armies which I could mention. Thirdly, the Spaniards are now most surprisingly united.

At the end of the civil war, putting it at a rather low estimate, General Franco had half the nation on his side. Since then, the proportion has increased in the most incredible way. Hundreds of thousands have gone over to him month after month in gratitude for his having kept them out of the war and for the tremendous social improvements which he has made in a socially backward country. Republican exiles have been returning, even the best of them, such as Senor Azaña. As for the rest, it is noteworthy that, in the recent round-up of dangerous Communists in France, most of them were found to be Spanish exiles.

On most grounds, therefore, Spain would make a desirable ally, and yet we continue to pull her nose. Why is it? It is for the simple reason that we do not agree with her Government. Yet nobody in his senses can pretend that Spain is an aggressive nation, and what right have we to say what kind of Government Spain shall have? What right have we to try to impose our own system of government on Spain? It is a bad habit which we have got into and which we are likely to regret in the years to come even in our own Commonwealth and Empire. Surely, in the case of a proud and independent people with a history and a geography entirely different from ours, it is quite indefensible. Surely we should allow Spain to feel her way towards a democratic system of Government which suits her own customs and traditions and faith.

Now let me consider my Catalan friend's final crack that our Spanish policy is hypocritical and stupid. It is hypocrisy to send ambassadors into virtual imprisonment behind the Iron Curtain and yet to deny on totalitarian grounds an ambassador to a country where visitors and foreign journalists can go where they like and report what they will. And it is stupid at the present time to pursue a vendetta which denies to us the help of a country like Spain, with its strong army, a navy equal to that of France, and with its wonderful strategic position.

When these remarks were made to me, I must say that, although I felt there was a good deal of truth in them, I stood up in a foreign country even for our Socialist Government. That I had to do, but unquestionably a lot of other Spaniards must feel the same way about us as did that chap, and it did not surprise me to find the other day Sir Maurice Petersen reporting that Spain is now very anti-British. Surely there are quite enough anti-British in the world already without our adding to them unduly, and it is really time that we did something about Spain.

In the first place, we refused at the end of the war to back Spain for the United Nations largely because we wanted to make it easier for Russia to come in. But now the situation really is that in the warming up "cold war" against Communism we are keeping out one of the most anti-Communist nations in order to please the main Communist Power, and that seems rather silly. There are hon. Members opposite who have been to Spain recently, to my knowledge, and who have come back with the same opinion as I am putting forward now, but they remain silent. Let them support my suggestion that we should do the generous and gracious thing towards Spain and back her for entry, not only into the United Nations but also into Western Union.

After all, we should remember that years ago Spain fought with us under Wellington in order to defeat the Napoleonic scourge. [An HON. MEMBER: "What about the Armada? "] Never mind about the Armada; Spain fought with us under Wellington to defeat the Napoleonic scourge, and this time we might give her the chance to fight alongside us a scourge which is a good deal worse.

9.13 p.m.

Mr. J. J. Robertson (Berwick and East Lothian)

The hon. and gallant Member for Totnes (Brigadier Rayner) will forgive me if I do not follow him in the tribute which he has just paid to the present Spanish régime or embrace the suggestion which he has put forward that a democratic people such as we are should openly and willingly accept the present régime in Spain. I seem to remember——

Brigadier Rayner

I did not suggest anything of the sort. I said there was no need for us to accept the present Spanish régime, that it was no business of ours, that Spain was not an aggressive country, and that we should accept Spain at its face value at this stage in our history.

Mr. Robertson

I would say that the more objection we display to the present régime in Spain, the easier it will be for the Spanish people to throw off the present dictatorship in that country and follow the example of this country in setting up a democratic form of Government. I seem to remember that in the past the present Franco Spain was not as blameless as the hon. and gallant Member tried to make out so far as this country was concerned. I seem to remember that there were occasions when our merchant seamen were mercilessly bombed from the air by Spanish forces, at the behest of General Franco.

I want to make it quite clear that in saying that I do not suggest any unfriendliness towards the Spanish people. I know very well that they are a tine people, because I used to go to their ports very frequently in the past when I was a sailor. It is a tragedy that they have been allowed, or have allowed themselves, to become the one country in Western Europe which still has fastened upon itself this vile thing—a dictatorial government.

Brigadier Rayner

The hon. Member for Berwick and East Lothian (Mr. Robertson) is not quite right. Take Portugal, which has been our ally for many years. What is the difference between the government of Portugal and that of Spain.

An Hon. Member

They never bombed our seamen, for one thing.

Mr. Robertson

I shall leave it to the House whether this régime in Spain is one which should have the full support of a democratic country such as this.

Hon. Members opposite have had rather a good time today on the question of the increase in the prices of consumable commodities in this country. Almost every hon. Member opposite has made the most of this very serious situation, which the common people of this country are facing today, with the increase in the cost of living due largely to conditions not under the control of the British Government.

I hope that when we come to discuss the reference in the Gracious Speech to steps to be taken to secure powers to regulate production, distribution and consumption, and to control prices, those hon. Members who have been making so much political capital of the increased cost of living will be on the Government side in giving the Government effective powers to deal with this difficulty. I imagine the right hon. Gentleman the Member for Woodford (Mr. Churchill) will have some difficulty in pursuading all those who have spoken today in this Debate to oppose the Measures which the Government propose to put forward to deal with this problem.

I want now to refer to one item in the Gracious Speech to which, as far as I am aware, no other hon. Member has made reference. That is to the proposal in the Gracious Speech to bring in a measure to deal effectively with the re-organisation of the fishing industry. Here we have an industry which is of inestimable value to the people of this country. The food production of that industry is something which must be organised on a sound basis. As a result of the action which the Government have taken in setting up the White Fish Authority, machinery must be created which will bridge that gap between the primary producer and the consumer, the gap in the difference in price which the producer gets and which the consumer has to pay. I admit that this is a rather belated action on the part of the Government, because many of us who know this industry so well have urged the Government, for several years now, to take effective action in this field of food production.

I congratulate the Government on taking that action, and I sincerely hope that the result of it will be that we will be able to save this industry from the collapse and the decline which now surrounds it. I think it would be true to say that the fishing industry is probably the last of the individualistic, private enterprise industries in this country which have so far been endeavouring to struggle along without any great measure of Government financial assistance, although I must say that since the Labour Government came to power considerable financial assistance has been given to the industry; but in the days before the war it was brought to a very low state and would have completely collapsed had it not been for the advent of the war, which gave it a new lease of life.

The greatest threat to the industry is that of over-fishing. I hope the Government will vest in this new authority very wide powers to deal with that matter. We have heard a lot about the need for European economic co-operation. We have heard of the Schuman Plan and all the rest of it, but surely here is a field in which the countries bordering on the North Sea should have some kind of common arrangement by which they should agree not to destroy this possible source of wealth but to moderate their fishing to such an extent that the industry will not suffer as it did in the days before the war. It is evident that this industry is long overdue for thorough re-organisation if it is to provide an attractive career for the producer and a cheap food for the people. Therefore, this step which the Government have taken in setting up the White Fish Authority is a step in the right direction.

There is one other matter to which I want to refer, and that is the question of food production in the field of agriculture. I note that the Government are about to take steps to increase the production of livestock on the upland portions of our country. I hope they will encourage in the Highlands of Scotland the experiments which have recently been carried on there in the production of cattle in the glens and the uplands and Highlands of Scotland. There is a great possibility there, and I hope that the measures which the Government propose to take in this Parliament will encourage that development.

If we are to have a healthy, thriving and prosperous agriculture in this country we should re-double our efforts not only to attract more people to the country areas but to keep them there. I was very sorry to note that the Scottish Wages Board the other day decided not to grant an increase in the agricultural worker's wage. For the life of me I cannot understand how it is that a judicial body, such as this may be regarded, should on the English side agree that an agricultural worker ought to have 6s. a week more, while on the Scottish side of the Border he should not have that increase. I hope that the Government will bear that in mind when they come to the February review for price fixing and when they consider the question of the subsidies paid to Scottish farmers, because I noticed that the farmers were opposed to the increase for agricultural workers and that the independent members voted with them.

Mr. Joynson-Hicks (Chichester)

The opposition of the farming industry is only to the extent that they believe that with a rise in wages there should be compensation through a rise in prices.

Mr. Robertson

I do not know that that always follows, although I imagine that the farmers would expect the Government to foot the bill for any increase in the wages of agricultural workers. I am not certain that that would be justified, for most of us are aware that there is a very considerable profit in farming today. I hope the Government will be careful about this, particularly with the Scottish farmers who so solidly voted against the increase for agricultural workers on the Scottish side of the Border.

There are many other points with which I should have liked to deal in connection with the Gracious Speech. I think the Government would be well advised to have a look at the administration of some of our nationalised industries in order to see that there is the maximum amount of de-centralisation and also the maximum amount of Parliamentary control. [HON. MEMBERS: "Hear, hear."] I notice that the Opposition do not look upon that with disfavour, nor, I think, do hon. Members on this side of the House. It is right that when any citizen in this country finds something with which he does not agree, and when he has done everything possible to have it remedied, he should be able to go to his Member of Parliament and have the subject raised on the Floor of the House. If we can reach a solution whereby we do not have too much centralisation and too much control from Whitehall and, at the same time, can have the maximum amount of autonomous power and authority given to the various boards which have been set up, then I think that would be much to the satisfaction of our people.

I want to close by saying that I con gratulate the Government on the steps they propose to take to introduce legislation to deal with the fishing industry, which was so sadly neglected during the years when Conservative majorities held power in this House.

9.28 p.m.

Mr. A. R. W. Low (Blackpool, North)

I find myself in general agreement with the hon. Member for Berwick and East Lothian (Mr. Robertson) in what he said about the nationalised industries, and I noticed that my right hon. and hon. Friends seemed to agree, too. I was, interested, too, in what the hon. Member said about the white fishing industry because sitting next to me, on my right, is my hon. Friend the Member for Bodmin (Mr. D. Marshall) who, I think, is as much responsible as anybody in the House for persuading His Majesty's Government to take some interest in the grave problems of the white fishing industry. It was rather extraordinary to find the hon. Member for Berwick and East Lothian, in the same speech, coupling Spain and the white fishing industry. I understand that one of the white fishing problems concerns Spain but, in an international discussion which they called to deal with the industry, His Majesty's Government omitted altogether to call Spain to the table. That seems to me one practical result of the policy which the Government have been pursuing over Spain.

I propose this evening to concentrate my remarks on the defence situation. Before I do so I have a few words to say on another subject and, in saying them, I will try not to follow the example of the hon. and learned Member for Northampton (Mr. Paget) who, this afternoon, began a speech by saying that he proposed to speak on foreign affairs and then spoke for 30 minutes on housing. I should not be able to follow it quite so successfully, because I do not possess, as he seemed to possess, an advance copy of the brief of the Minister of Health. Many of the questions he put to us we shall, no doubt, hear again. However, I would agree with many other hon. Members that the housing problem is the problem which is engaging my constituents and all our constituents; and I want to say that as much as any hon. Member in this House. I am confident that the policy that the hon. and learned Gentleman tried to defend will not produce any more houses. Indeed, he admitted it himself; and the only point he seemed to make was that the rents of houses must go up. I do not think that that is much of a contribution.

Now I come to defence. The concluding words of the speech of the Under-Secretary of State for Foreign Affairs, in the middle of the day, confirmed the opinion which, I think, we all hold, that our foreign policy will fail if our defence policy fails. They are closely linked. Our defence policy must fail in some details if our foreign policy fails in some details. I mean, there, to refer to our policy towards Europe, about which I was very glad to hear the Under-Secretary give us a more reassuring assurance, if I may so put it.

It is now generally understood that when we talk about defence we have as our object the prevention of war. In fact, we defence-mongers on this side of the House, who used, three or four years ago, to be known as war-mongers, may now. perhaps, be described truthfully as peace; mongers. It is generally accepted that that is what we are out to get, and it is the Government's own admission that their foreign policy succeeds or fails on the ability of our defences, working with the defences of the Atlantic countries and the other free countries of the world, to deter aggression; and we shall deter aggression only if the potential aggressor understands not only that we can defend ourselves but that we can defeat him.

In that context it was, therefore, very disturbing to read in "The Times" of 30th October that General Marshall made, as almost his first public statement on the defence situation of the West, a very serious criticism of our present position. What has been done he said, so far, good as it may be. is far from good enough." … Then, later, he said this: The actual collective forces of the North Atlantic States may not be enough to deter aggression in our North Atlantic area, and are definitely not enough to resist attack without serious and critical initial losses.".. If I needed any apology for raising the subject of defence tonight I think I should not have to apologise any further to the House after reading those words from a man who is generally trusted for his ideas on world policy, and generally trusted as much by right hon. and hon. Gentlemen on the opposite side of the House as he is by right hon. and hon. Gentlemen on this side of the House.

Of all the troubles and problems of defence the most important of all seems to me at this moment to be the problem of time. Time is of the essence. The Minister of Defence himself admitted that to the House on 14th September, when he reminded us that: However interesting it may he to plan for 1953 or 1954, I am much more concerned about 1951."—[OFFICIAL REPORT, 14th September. 1950 Vol. 478, c. 1392.] Some of us on this side of the House have been much more concerned about 1951 for some time, and we were very glad to hear him say that.

But I must admit that I smell an atmosphere of delay about the present arrangements for Atlantic defence. Perhaps I should not say that in this new Chamber. It is an unfortunate metaphor. There seems to be delay in many things. There is delay in appointing the Commander-in-Chief to the allied army in Europe. There is delay in reaching a settlement over the re-armament of Germany. There is delay—or so it seems to us—in ordering more equipment in this country. There is delay in sending more divisions and a larger tactical air force to Germany, where the results of doing so would bear such fruit in European defence. There is delay in reaching a decision here over the Home Guard and deciding how to fill up the glaring gaps in the Territorial Army and the other auxiliary forces.

Delay, when time is of the essence, is a very serious thing which we in this House should have in mind, and about which we should not allow Ministers to come here and excuse themselves by saying, "It is all very difficult. We have got to reach agreement with other countries." We all realise the problems of collective action. Of course we do. But it is vital that we find a way round these constant delays. In particular, though we have only a joint responsibility for the first two delays—the delay over the Commander-in-Chief and the delay over the decision about the rearmament of Germany—we have a further responsibility which we should acknowledge, and that is our failure to be strong enough on the ground in Europe.

It is largely because of that failure that morale in France is not as high as it should be—and, I would add, morale in Germany, too. There is no doubt that the additional strength in Germany that we and the Americans can produce will add to the confidence of France, which will, in its turn, increase the strength of France in Europe, which will, in its turn, increase the morale of Germany and help as much as anything else to get the combined European Army we all want to see.

We must not be too hard upon the French, for we cannot but sympathise with the suspicions they have, and openly proclaim, about the rearmament of Germany. We are all agreed now that there will not be a national German army, but that Germans will provide contingents for a European army or for an allied army in Europe. We are all agreed about that. The safeguard that the French have long wished to see lies there, and lies there the more forcibly the more interest we take in European affairs. The apparent indifference on the part of this country in the affairs of Europe will delay the creation of European defence, and I think that His Majesty's Government should examine their actions to see whether they cannot now show an obviously increased interest in the affairs of Europe and an increased willingness to share the burdens and take their full part, because without that we shall face more and more delay.

The recent announcements of the French Government about the creation of a European army with German units as the German contingent seemed to me wholly inadequate. I would go so far as to say that it seems to make a complete mockery of the idea of a European army, and a complete mockery of the Germans. German units by themselves in a European army of many languages could hardly create an efficient army, and could hardly give to the Germans that feeling of responsibility which is surely essential if we are to get people to fight properly. The smallest contingent must be the division.

What of the German position? I say at once that I, like many other hon. Members on all sides of the House, was very reluctant, two or three years ago, to consider the possibility of re-arming Germany. We were very reluctant for obvious reasons, and to many of us it is a painful decision that we have got to take now, but it is necessary. It is largely necessary because of our own fault, and by that I mean the fault of all the Atlantic Powers. In these circumstances the only way of avoiding the re-armament of Germany was for us to build up sufficient forces in Europe to defend Europe.

We have failed to do that. The French have failed, we have failed, and the United States have failed. Therefore, we are now faced with the unpleasant task and unpleasant necessity of quickly taking a decision about the re-armament of Germany, and taking it at a time when our forces are not as strong as we should have liked them to be when we re-armed the Germans. Nevertheless, we have to take it.

There was much in the short part of the speech of the hon. and learned Gentleman the Member for Northampton in which he referred to foreign affairs—it took him only four minutes—with which I wholly agreed, but there was one thing with which I disagreed. He said, in effect, that alone of all the countries of Europe the Germans had confidence in victory over the Russians. I think some do, but a lot do not. It is my opinion after talking to a number of persons who have been in Germany, and to Germans who should know, that if we asked the Germans now it is very likely that a majority would vote against making a contribution to the European defence forces. Why is that? It is because their morale is down and that they have no confidence that we should win in Germany. We must show them that we are building up forces which can win a land battle against any aggressor, east of the Rhine and as near as possible to the Elbe.

Mr. Paget

I did not mean to say that there was a sense in Germany now that they could defeat the enemy. What I meant to say was that in Germany alone we find individuals with a sense of personal superiority, on which alone we can build up a morale.

Mr. Low

I am grateful to the hon. and learned Gentleman for his explanation. I understand.

There were other points in the hon. and learned Gentleman's speech with which I agreed. The importance of one of them is not generally understood and that is the effect that our deliberate anti-militarist policy has had on the German view of rearmament. The hon. and learned Gentleman put the point very well, and I do not wish to weary the House by repeating it; but we must bear in mind, whether we like it or not, that the treatment of certain German commanders and soldiers has bitten deep into the soul of many Germans. I hope that His Majesty's Government are at any rate conscious of that fact. Without further consideration, I do not think that this is the moment at which to release to the German Government prisoners of ours who have been tried and found to be criminals.

I believe I have made it clear that I consider that our contribution to the defence of Western Europe must be increased as soon as possible if Western Europe is to defend itself. The number of divisions and the tactical air force strength—which is just as important—that we can station in Germany will bear fruit several-fold the actual value of those forces in Germany itself.

His Majesty's Government propose at the moment to send one further division during the next year. We have said several times in this House that we consider two is the very minimum, but if they are going to send one division that must be an extra division. There must be no pruning of troops already in Germany to make a division out of them. We cannot bluff the French, we cannot bluff the Germans and, above all, we shall not bluff the Russians. If we are serious about our increased contribution to Germany we must see that the world can find no fault with the fulfilment of the intentions which we announce in this House.

There has been much talk about the number of divisions we are aiming to create in Europe. Fifty divisions have been mentioned, 60 divisions have been mentioned. If we are to reach either of those figures we shall have to send far more than three and a half from this country. We have had explained to us many times by the Minister of Defence how difficult it is for us to spare even that number. In a moment I shall ask the Government whether the bottle-neck lies in manpower or equipment. If it is difficult to send three and a half, how much more difficult it would be to send six and a half or seven. Indeed, it seems to me that if we are to send our contribution towards this 50-division European army we need to create a British Army of about 14 or 15 divisions. I have seen no proposals on the part of the Government as to how that will be done and how the equipment will be supplied..

Before I say a word about equipment I want to say one thing about the British Army of the Rhine. For the second successive year hon. Members of this House have been to Germany to watch the manoeuvres of the British Army of the Rhine. So far as I can gather from their reports, and from newspaper reports, the manoeuvres showed that instead of an increase in the strength this year as opposed to last year, the situation had got worse. That is very disquieting. There are stories of lorries breaking down. There are many stories of bad communications. This is a state of affairs which ought not to have been allowed to occur in a year when public opinion has been focused on the defence of Western Europe.

There is really no excuse now for the two best divisions of our Army—for so they ought to be—to be equipped with out-of-date vehicles. There is a curious idea that any old vehicle is good enough for the Army in peace-time. People look back to the days of the desert Army where there were literally wizards who made their old, broken-down vehicles go with the aid of pieces of string. But that is not the way to carry on in peace-time, and it is certainly not right to equip British Forces in peace-time with equipment of that kind.

It is time that our Army in Germany was properly equipped for the task it has to carry out. Part of the trouble with defence in peace-time is that one cannot answer the question: What are these Forces meant to do? But that is one question we can answer about our Army in Germany, and because we can answer it, His Majesty's Government ought now to be providing them with the kind of equipment which will allow them to carry out that task. This is a proposition which applies outside Germany, too. We now know our enemy. We know the sort of things our Forces will have to do. We should be equipping them to carry out their task in the best way possible so that they may take advantage of the primary qualities of the British Army—skill, mobility and fire power.

The British Army should be equipped with infantry-carrying vehicles which will take them across country and with amphibious vehicles which will take them across rivers. I understand there were five amphibians in the British Army of the Rhine manoeuvres, and they all broke down. That is a situation which we cannot tolerate in a period when General Marshall is able to get up in public and say what he said about the defence situation. Incidentally, I notice that the Government, despite the fact that they might have guessed that defence would be spoken of tonight, do not have a Defence Department representative here. I hope that the Under-Secretary of State for Foreign Affairs will see that somebody reads some of the things I am now saying.

Another deficiency in those manoeuvres of the British Army of the Rhine which was shown up was this. Despite the fact that the whole basic assumption of the exercise was that the enemy would have complete air superiority, there is not one heavy anti-aircraft gun with the B.A.O.R. What a ridiculous and dangerous situation.

I am conscious, having said that about the British Army of the Rhine, that I might seem to the House to be saying things which ought to have been kept secret. But all these things have been in the newspapers; that is where I have got them from. I am also conscious that no valuable defence speech can be made while the House is meeting in public, and I reinforce what my right hon. Friend the Leader of the Opposition said yesterday, that we really must have a secret Session in which we can discuss the progress of the Government's whole programme.

I should like now to say a few words about the vital question of re-equipment. In my opinion, the bottleneck preventing the expansion of our forces—I have taken the Army as an example—is one now of equipment and not of manpower. The recent steps which the Government have taken in increasing the pay of the Forces, for which we on this side were pressing for nearly three years, have to a large extent given them an opportunity of solving the manpower problem. At any rate, the main problem today is one of equipment. If anybody on the benches opposite does not believe me, he has only to refer to the speech by the Minister of Defence on 14th September at column 1394 of the OFFICIAL REPORT. In those circumstances, one would have expected the Government to be going ahead fast with their equipment programme.

To find out what had happened, I put down a Question to the Minister of Defence on 23rd October about the progress of supply orders. The answer of the right hon. Gentleman was that Orders to the amount of over £70 million have been placed or are under active negotiation with industry by the Admiralty and Ministry of Supply. As regards the longer term plan announced in August, it has been agreed that, as an interim measure, orders should be placed to the value of a further £100 million in order to ensure that there is adequate capacity for the production of the most important items of equipment."—[OFFICIAL REPORT, 23rd October, 1950; Vol. 478, c. 316.] That was really disquieting, because if we are to get on with a programme of expenditure of £400 million extra each year which concerns defence equipment, we must start with our orders very quickly. One would have expected orders to have been placed with industry for a far greater amount. I was glad, however, to hear the Prime Minister say yesterday that we are going ahead on the basis of this planned expenditure—that is, the £3,600 million programme—which the Government announced in August. That is a change from 23rd October, but it seems to me wrong that the Government should have delayed so long before getting on with the vital orders; nothing can happen until the orders are placed.

I pass from the supply of equipment to the organisation of our Forces. Mention was made in previous Debates of the lack of air transport; Transport Command orders for new aircraft had been postponed. Of course, it is vital to the mobility of our Army and Air Force that we should be properly equipped with suitable air transports. That decision is only justifiable if proper arrangements have been made with the charter companies and the corporations, and I ask the Government to tell us later in this Debate whether those arrangements have been made; and to supplement that—I see that the Under Secretary of State for Air has now left the Chamber—I should like to know how many auxiliary air transport squadrons announced by the Secretary of State for Air in July have yet been formed.

I have one other question to put on organisation. Can the Government be really happy about the organisation of our Army when the average British division, although containing more than 50 per cent. more men than a Russian division, has less fire power? I make that statement in all seriousness. When it was first made by the hon. and learned Member for Northampton I and others questioned it, but on the latest evidence I can find that is true. That is a position which is both dangerous and not tolerable to hon. Members of this House who think about our defence situation seriously.

So far, I have referred primarily to the active Forces. I now want to mention the auxiliary Forces and particularly the Territorial Army and the air defence organisation of Great Britain. We rely upon these volunteers in particular for the defence of our homeland and I think it would not be putting the case too highly to say that the Territorial Army as at present organised will be quite useless for immediate action in 1951. There are too many gaps in the strengths of the units, too few men and too few guns, too few predictors, too few radar sets, and so on, issued to the men for training. The Government ought to show the urgency with which they speak now in this House in trying to solve the problem of our home defence and when they are thinking on these things the sooner they reach a decision about the Home Guard and expansion of the Civil Defence services the better for all of us.

Defence has, rightly, in my view, figured quite largely in the Gracious Speech. There are minor matters to which I make no reference, but I welcome the announcement that some steps are now to be taken about appeals from courts-martial, although I think we shall have to consider seriously what effect this may have in the case of courts-martial on really active service. That is a matter for discussion, but we on this side of the House welcome the fact that the Government have at last taken some step in this matter.

We also welcome the decision to introduce a Bill for re-instatement in civil occupations of recalled reservists and national Service men who volunteer for extra service. It amazed me that when the Government came out with proposals for longer National Service they did not plan for such a measure to come into operation at once. That made for uncertainty and too often we find that in plans affecting the lives of soldiers, sailors and airmen there is a failure to look to the importance of certainty in their plans. On another occasion I referred to the importance we ought to attach to letting young men know when they could go to university, for example. This re-instatement doubt is now to be put right by a new Bill.

I began by saying that the effectiveness of our defence policy directly governs the effectiveness of our foreign policy. I would add to that that the absence of waste, or the presence of waste, in the carrying out of our defences affects also our standard of life at home, the cost of living and the number of houses we will have to build. We want to be assured that the defence programme and re-equipment is to be carried out effectively and with drive and I think we are entitled to have that assurance from His Majesty's Government, although, as I have said, it is impossible adequately to question their policy except in secret session.

It is quite clear that we cannot have defence without tears. There is a burden of £400 million more to be borne, and that burden must be borne fairly.

It being Ten o'Clock, the Debate stood adjourned.

Debate to be resumed Tomorrow.