Motion made, and Question proposed,
That a sum, not exceeding £900, be granted to His Majesty, to complete the sum necessary to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1920, for the Salaries and Expenses of the Ministry of Munitions." — [Note. — £100 has been voted on account.]
§ The DEPUTY-MINISTER of MUNITIONS (Mr. Kellaway)
I have to ask the approval of the Committee for an expenditure for the year ending 31st March, 1920, of £185,000,000. If this figure of £185,000,000 were likely to be a permanent figure for any Department similar to that which I now represent, it would be an exceedingly depressing one, but out of that total of £185,000,000, £99,000,000 is a war charge in respect of the liquidation of contracts which were running at the time of the Armistice. The balance of £86,000,000 is for supplies to other Government Departments. The Committee will notice that they are asked to approve a Vote of £1,000 against that expenditure of £185,000,000. The £1,000 is a Token Vote to cover estimated deficiencies in our receipts in the form of Appropriations-in-Aid. The expenditure of £185,000,000 is estimated to be made up as to £86,000,000 by payments from other Government Departments for supplies provided for them by the Ministry, £7,000,000 by repayments by contractors of advances made to them, £16,000,000 will be payments from the Allies for munitions supplied during the War, and £76,000,000 will be the estimated proceeds of the sales of surplus stores by the Ministry during the coming year. I know that there has been a good deal of comment in various quarters on the policy of Appropriations-in-Aid and particularly in regard to the policy of the Government in using this £76,000,000, which it is estimated the Ministry will secure during the current year from the sale of surplus stores, as Appropriations-in-Aid of this expenditure. That is a point of view with which per- 46 sonally I have a good deal of sympathy. I was examined on this question by the Committee on National Expenditure, and there stated that from the point of view of the convenience of the Department we should have no objection, and that it would be a considerable advantage if, instead of using this money as Appropriations-in-Aid of our expenditure, we had to come to Parliament for a Vote of money to cover the whole of our expenditure. But the Committee will see that this question cannot be dealt with from the point of view of the convenience of any one Department. It is quite clearly a question which is to be controlled by the financial policy of the year, and the Chancellor of the Exchequer, in his annual statement, gave the reason why it was desirable that the proceeds of the sales of surplus stores should be used as Appropriations-in-Aid of the expenditure of the Department responsible for carrying out those operations.
That is all I need say at the moment in regard to the general figures of the expenditure and income during the coming year. But this is the first time that a Minister representing the Department for which I am now speaking has been in a position to speak with complete frankness and without making statements which would, in earlier circumstances, have been prejudicial to the public interest. That has some drawbacks. It is no longer possible for a Minister to escape the embarrassments of his office by pleading the public interest as being prejudiced by frankness. But there is a great advantage in our now being able to give information and figures to the Committee which could not have been given before to-day. There is a grim appropriateness in the fact that to-day, on the morrow of the decision of the Central Powers to sign the Treaty of Peace, this Committee is considering this Vote. That Treaty crowns the efforts of the British soldier. It was his blood that was shed; it was his sacrifice that was made. The triumph of right expressed in that Treaty is the triumph of the British soldier. Many classes of the community helped him to win it, but it wa3 his triumph, it was his effort. Yet I am sure that the British soldier and all those who knew him in France, and who have known him since his return here will agree, would be the first to admit, that without the work of the munition industries of this country his valour would have been spent in vain against the rock of the German armament. More I do not claim 47 for the Ministry of Munitions, but this I do claim that, finding the British soldier without proper equipment, without sufficient or efficient weapons either for offence or for defence, we were able to provide him with weapons which, in their abundance, their ingenuity, and their effectiveness, made him the best equipped of any soldier in the field. We shall not be able to do justice to the full measure of the British soldier's triumph unless in this memorable hour we remember the odds against which he had to fight in the early days of the War. In order that that great work of putting the British soldier on an equality and in the end superior to his opponents in his equipment might be done, this country poured out money like water. The total expenditure of the Ministry of Munitions from its establishment up to the end of the last financial year was £1,834,000,000. Adding the £99,000,000, which is a war item in the figures I have given for the current year, and such items as will remain after that period, it is certain that the figure of the charge this country will have had to bear for the equipment of its Armies will not be short of £2,000,000,000. I think the Committee and the country arc entitled to know whether they got full value for that vast expenditure, and it is impossible to give the evidence which, in my view, justifies that great claim without recalling the position in which the British Army was placed during the first nine months of the War.
When the Army settled down to trench warfare they were practically without equipment for that form of warfare. They were without grenades, without mortars, without bombs, and without an adequate supply of high explosive shells. With the resource which has always distinguished the British soldier he set to work trying to provide his own equipment. Having no proper trench warfare weapons, he improvised grenades out of bully beef tins and jam tins, and in workshops erected in the field he carried on experiments with high explosive hand grenades, trench mortar bombs, and trench mortars. At the beginning of the War and for some time after its commencement this country was without a light trench mortar. No manufacturing capacity had been developed. There was no reserve, and it was a civilian engineer, Mr. Wilfrid Stokes, who saved 48 the situation. The Stokes mortar, which in the end was the most perfect of the light mortars in the field, was first brought forward in January, 1915, and submitted to the authorities by Mr. Gwynne, of the "Morning Post." It was taken up by the Ministry of Munitions immediately it was established, and in August, 1915, the present Prime Minister ordered 1,000 of that weapon. So short was the Army in France of proper equipment with which to compete against the highly organised and scientific armaments of Germany for trench warfare that we had to supply our men with catapults, and no fewer than 3,000 catapults had to be sent out in the early months of the war, with which our soldiers—our flesh and blood—did their best, and did it magnificently, and in a manner in which no country had a right to ask its flesh and blood to defend itself against the armaments of Germany. I cannot pass from this introductory part of my speech without dwelling for a moment on that heroic figure—the most tragic figure in the whole history of this War—of the British soldier, without equipment, fighting a highly organised and magnificently equipped enemy, doing his best to improvise his own weapons, using catapults and hand grenades made of bully beef tins and jam tins. There is no more tragic figure in the whole history of war. The men who trod that Calvary have nothing to learn of physical suffering or of bitterness of spirit.
We pass through the long months of trench warfare to June, 1915, when the Ministry of Munitions had its official birth in the Act of Parliament which was then passed. But it was not the Act of Parliament that made the Ministry of Munitions. The Ministry of Munitions was made by the shambles of Festubert. The experience of that battle brought home to the most stubborn supporter of the old methods that the time had come for new men and new methods. How much blood would have been saved, how fewer British graves there would be in France to-day if the decision taken after Festubert had been taken at the date when the shortage of ammunition was known to all who had access to official documents! I sometimes hear the expression, "Shell shortage controversy." There is no controversy. What informed man ever disputes the fact that there was a shortage? It is impossible for any informed man, or for any man who spoke to a soldier who came back from the early months of the 49 War, to question the shortage. It was not Colonel Repington's article in the newspaper. He might have published a hundred articles, and politicians might have intrigued in vain for a century, and nothing would have happened if the facts had not been as grim and as grisly as they were. And no adequate steps were taken to remedy that shortage until the time when the necessary powers were given in the Ministry of Munitions Act and in the Defence of the Realm Act. The fault does not rest with the men in the War Office who were trying to solve an impossible problem. They had not the power. They did wonders, having regard to the situation with which they were faced. But the dominating factor of that time, which made the solution of the problem impossible, was that there was professed in high places a heresy which was expressed in the phrase, "Business as usual." If that heresy had continued, there would have been no business for this country. Within the limits of their powers the War Office men did wonders. They ordered shells by the million. Orders for over thirty million shells were placed by the Armaments Committee of the War Office, but they had no power to see that the shells were converted into ammunition which could be fired out of a gun.
I have heard a good deal about these old War Office orders. What the man in France, who was limited to four rounds a day, wanted was not an order—something written on a scrap of paper. He wanted something he could fire out of a gun. These famous orders recall to me that famous Barmecide feast where the host ordered practically everything which his vivid imagination could suggest, but which never materialised into anything which his guest was able to eat. It was only when the powers given in the first Munitions Act and in the Defence of the Realm Regulations were used by the first Minister of Munitions to control the supply of machine tools, the importation of raw material, to erect great new factories, to bring women into the munition factories as was done by the hundred thousand, to control profits, to regulate wages, to remove trade union restrictions—it was only then that it was possible properly to grapple with this problem. We have no right to criticise men who failed in the task which was set them, not from any want of will or knowledge, but because the problem was not 50 properly understood at the top and because they were not given powers by which it could be carried out. The first task that fell to the Ministry of Munitions was to bring these great War Office orders into fruition, to see that the figures which were written on pieces of paper were converted into something that the gunner could fire from his gun. The Prime Minister's first task was to find out what was holding up the delivery of these orders. Out of a hundred shells which had been ordered only fifteen were forthcoming at the date on which they were promised for delivery. It was found that the hold-up was principally due to lack of component parts. A shell without a primer or a T tube or a fuse is about as useful as a motor car without an engine or a carburettor or a magneto. The component manufacturers were brought together. Men expert in the business of munition production interviewed them and it was found one man had anvils and no bodies and another had bodies and no anvils. The simple measure was taken of bringing the bodies and the anvils together. I give that as a typical instance of the detailed measures, far-reaching in their effect, by which this component problem was solved. By heroic measures on the one hand and detailed measures on the other, these great Pre-Ministry of Munitions orders were converted into real ammunition.
The total output of shells before the War was about 55,000 rounds per annum. From that figure we built up a total production, between the outbreak of war and the date of the Armistice, of over 200,000,000 rounds. The number of guns with the Army at the outbreak of the War was 476. The total production of guns during the War was 26,430, plus 9,170 which were repaired. Up to June, 1915, there had been accepted by the War Office for delivery to the Army 1,486 machine guns. The total production up to December of last year was 250,000, and if the War had continued our production to-day would be 4,000 machine guns per week. The figures for the development and increase of motor transport have been similarly striking. The Ministry only became responsible for motor transport in August, 1916, and no figures are available of the output before that time. The output for the September quarter of 1916 was 1,910 motor vehicles of all kinds. The total output from September, 1916, to December of last year was 100,626. At the 51 outbreak of War the British Army had in its possession about 100 aeroplanes. The Ministry became responsible for aeroplane production on 12th September, 1917, when the production had increaed to 500 aeroplanes per month. At the date of the Armistice, that is to say a period of little more than eighteen months, production had been increased to 4,000 per month. I should like to have dwelt on that figure and what it means. There is a very romantic story behind these figures of aeroplane production. At a time when raw material and machinery was very largely engaged on other essential war production this country was able, thanks to the ingenuity of its craftsmen and the farsightedness of its captains of industry, to make a great step forward in its aircraft production. The improvement in the fighting quality and the safety of the machines was just as great as the increase in the numbers. I think there is no question amongst informed men that during the latter stages of the War this country held the supremacy over her enemy in the air. That was due not only to the extraordinary fighting spirit and ingenuity of the men who flew and fought the machines, but also to the ingenuity and patriotism of the craftsmen and the employers engaged in that great industry.
I pass from that to bring the mind of the Committee to a period last year when the organisation of the Ministry was tested from top to bottom. I should like those men, most of them well-meaning and well-informed men, who from time to time criticise defects in the administration of the Ministry to realise the significance of this fact. In April last year the great German offensive was made. In the course of that short offensive our Armies in France lost either by capture or destruction 1,000 guns, 70,000 tons of munitions, or about 15 per cent. of our total stocks in France, 4,000 machine guns, 200,000 rifles, 250,000 rounds of small arms ammunitions, 700 trench mortars and 200 tanks. I doubt if any Army in the course of this War suffered more devastating losses of material. At the time when the news began to come in my hon. Friends opposite will remember that there was a good deal of industrial trouble in this country, and those of us who were responsible for Labour policy in the Ministry viewed with a good deal of apprehension the situation as it then existed. But as soon as it became known in the workshops of this 52 country that the British soldier had suffered these losses in material, and that he was fighting with his back to the wall in defence of the Channel Ports and of our homes, all the disunion in the ranks of labour was swept away like mist before the summer sun. It was a magnificent rally which the labour men of this country made in support of those who were shedding their blood on their behalf across the Channel. The organisation made it possible for these great losses to be borne and to be replaced within a fortnight. Indeed, not only to replace every gun, every machine gun, every tank, every trench mortar, every round of ammunition, but to replace them, in many cases with a superior weapon. That was particularly true in regard to the tanks. The 700 tanks that were lost were all replaced with a quicker and more effective weapon. These are the particulars of the great lossss in April and of the way that they were made up.
From April of last year let the mind of the Committee proceed to August of last year, when the British offensive began—one of the most dramatic changes of fortune in the whole history of the War. The organisation that had had to make up the great deficiencies due to losses of equipment in April was able to supply the Array so that in August, 1918, in one week there was expended 2,900.000 rounds of ammunition or a weight of 80,000 tons, whilst in the culminating period of October last, the biggest week of the offensive, we expended 3,500,000 rounds of gun ammunition, not small arms ammunition, equal to 85,000 tons weight. On the day that the British Army broke through the Hindenburg line they fired 943,000 shells of a weight of 40,000 tons. A greater number of shells were fired in the twenty-four hours' bombardment that preceded the breaking of the Hindenbung line than we fired during the whole four years of the South African war. If we take the pre-war output of the country as 55,000 shells per annum, our guns were firing every eighty minutes a number of shells equal to the total annual output of this country before the War. I think the organisation and the industry that was capable of producing results such as these need have no fear of the judgment that history will pass upon its operations. I am sorry to have to inflict upon the Committee masses of statistics of this kind, but it would have been impossible in any other way within 53 the compass of time that I can expect the Committee to allow me to convey to them the magnitude of the work carried on.
As an accompaniment, and a necessary accompaniment, to the magnitude of the work there have been revealed faults of administration and extravagance here and there. Some of these instances have recently had public attention concentrated upon them in connection with the Comptroller and Auditor-General's Report. I want now to make a reference, not to the Report itself, but to the comments made upon that Report. That Report, if properly considered as a whole, has been completely misrepresented by the comments which have appeared and which have been made in public speeches. I should be rendering a poor service to the Department for which I am speaking, and to the eminent men whose administration it falls to me to defend, if I were to say a single word of reflection on the way in which the Comptroller and Auditor-General has discharged his duty. He is a great officer of this House, one of the most potent instruments by which this House exercises its ancient duty of checking the expenditure of public departments; but he is a critic. By the Statute under which he is set up he is a great critic and not a judge, and the Committee will find if they examine his Report that he has not gone beyond that view of his function. The House has provided that when the Comptroller and Auditor-General's Report is submitted to the House it shall go forthwith to the Public Accounts Committee, and it is for the Public Accounts Committee to examine the statement of facts to which the Comptroller and Auditor-General has directed their attention, and to make such recommendations for action as they think fit.
In my view a serious injustice has been done to the Comptroller and Auditor-General by some of the comments which have appeared in the Press and which have suggested that he has gone outside his duty. Parliament would, I am certain, never submit to the action of an officer who acted in the way in which certain newspapers have suggested the Comptroller and Auditor-General has acted. He has done nothing more than carry out his duty under the Statute, which is to direct the attention of Parliament to certain things on which he pronounces no final judgment. A grave injustice has 54 also been done to the men in the Ministry who have been working with great skill and great efficiency, many of them as volunteers, by the pretended summaries of the Report which have been used in many quarters. It would have been thought from what some wild-headed writers have said that the Comptroller and Auditor-General had described the Ministry of Munitions as a wild spendthrift Department, where there was no control over expenditure, and where the contractors simply walked in and found a thieves' kitchen, if I may quote the elegant language used by one of those who has been associated with it in the past, but who found it impossible to continue his association with the Department. I am speaking of the comments which have-appeared in some of the wilder newspapers.
What are the facts about the Report? In the second Clause of his Report the Auditor-General makes this remark.The cases stated—These are the cases on which criticism is passed:are brought to notice, generally us presenting special features of interest or importance, but it may be stated that they are extremely few in comparison with the vast number of transactions negotiated by the Ministry and that the sums involved are small in relation to its-turnover.It is not surprising with an annual turnover of £2,000,000,000, with contracts, numbering many thousands, and with the contracts being worked under war conditions, to find examples of extravagance here or there. The Comptroller and Auditor-General goes on to say:A very favourable influence on the accounts has been effected by the introduction of a scheme of reform.… They were undoubtedly far-reaching and effective and the results appear to have been very good.I will not spend time on the compliments which the Comptroller and Auditor-General passed on the Ministry in which he referred to the efficiency of the Ministry and the effort to remedy defects. Notwithstanding these tributes, the work of the Ministry was referred to in many newspapers, and those not usually the sensational ones, as "waste and muddle," varied with such headlines as "Muddle and Waste." The organ which represents that party, which believes that the people ought to manage everything for themselves, declared that this example of the people managing things for themselves 55 meant that millions of money were being poured down the sink. I think I could make up headlines which would more accurately reflect the real character of the Comptroller and Auditor-General's Report than the headlines which have appeared in the newspapers. My headlines would be "Ministry of Munitions' Finance—Great Public Official's Tribute to efficiency of the reforms that have been carried out—How profiteering has been checked—Hundreds of millions of money saved to the taxpayer." I admit that these are headlines I am suggesting, but I claim that they would more accurately represent the true nature and intent of the Comptroller and Auditor-General's Report than the comments to which I have referred.
The criticisms so far as they are well founded are concerned particularly with experimental supplies. I am sure the Committee will see that in regard to experimental supplies it is impossible to have the same strict control as you have in regard to standardised supplies. Many of these experimental supplies had never been made in this country; they were absolutely foreign to our industrial practice. They included such things as poison gas, anti-aircraft bullets and tanks. Here were three munitions, each of which had a great effect on the fortunes of war and in regard to which production had to be going on at the same time that experiments and research were going on. You had these two parallel processes of production in great quantity on the one side and experiment and research on the other. In these circumstances is it not obviously inevitable that some of the earlier contracts that you placed for your experimental supplies would have to be scrapped and improved munitions ordered in their place? That is exactly what took place in regard to these particular munitions about which there has been some criticism. It is all very well now, when the experience of the War has passed away, to turn round and denounce some of the men who were giving up their time in the Ministry—and more than one of whom gave up his life in the Ministry—to develop these new weapons of warfare.
Let me take two examples. I have here sections of bullets which stopped the German air-raids on this country. There are six of them, from the first crude bullet, indistinguishable from the bullet that the 56 infantryman fired out of his rifle, up to this one which to the ordinary layman does not differ on casual examination from the first, but that bullet used only once, on Whitsunday of last year, prevented any further air-raids on this country. Were we right to scrap the earlier bullets when we found a better one? Were we not right to stop the contract for the earlier bullet and to pay compensation to the contractors? I would not have liked to have been the Minister to stand up in this House on one of those nights when London was being raided, and when questioned as to whether we had not a bullet to stop the raids, to have said, "Yes, it is true, but the contractor is engaged turning out the earlier form of bullet, and we must not turn them off that in order to make the new bullets, otherwise the Comptroller and Auditor-General, the Public Accounts Committee and the Press will denounce the Department as being wasteful muddlers."
I remember standing in my garden at Blackheath—I think it was on the occasion of the first raid—watching a Zeppelin which was hovering over Woolwich Arsenal and apparently dropping its bombs with complete impunity. Our poor little anti-aircraft guns did not get within miles of their objective; they could not fire more than two miles in those days. We have now anti-aircraft guns which can fire effectively at objects five miles in the air. I watched that Zeppelin, and I do not think that I ever had a greater sense of humiliation than when I thought that it was possible for Germany to attack the very heart of this Empire to do its best—and it did a great deal—to check the moral of our people, and interfere with production, without our being able effectively to reply.
When the Zeppelin raids were stopped as they were, by the heroism of our airmen, and the engines of defence which we were able to provide, a new problem presented itself, because the bullet that had been effective against the Zeppelins was not so effective against the heavier than air machines, and our men had to go on with their experimentations, trying to devise a bullet which would be equally effective. As the Committee knows, that bullet was found, and during the later months of the War we had not the dread of air raids. But if you are going to put it on the ground of money alone, and consider the loss of money on these contracts on the one hand, surely you ought to compare it 57 with what would have been the loss if those raids had gone unchecked. On the day after Whit Sunday last year it was known that Germany had prepared for air raids on this country, by heavier than air machines, greater in magnitude than had ever been attempted before. Why did they not come? They did not come because the reception that their airmen got that Sunday night made it impossible to get men to face such risks. On the mere ground of money alone, if that ground is taken, then on these contracts the Department can claim to have acted justly and properly. Very much the same applies to the contracts for poison gas. There has been some rather acid comment on the fact that contracts were placed for poison gas that did not realise all our expectations. We never reached a perfect gas. Contract after contract was placed when experimentation had satisfied our experts that they had got the best that was possible in the circumstances. Were we to have waited before replying to the German gas attack at Ypres until we got a perfect gas, or were we to proceed to put into the hands of our men the best weapons that were available? Whatever some jaundiced critics may say about some of those contracts, the British soldier will salute the men of the Chemical Warfare Department of the Ministry of Munitions who in cold blood risked their lives in connection with the experiments which they undertook to start this war industry, with the result that we were able in the ten months of 1918 to send out to France 15,000 tons of gas for use against the Germans. Although I do not think that we ever succeeded in improving on the effectiveness of the German gas, we certainly were equal to it, while on the defensive side of gas warfare the Chemical Warfare Department of the Ministry succeeded in providing a defence that undoubtedly made our gas mask the best of any of the fighting forces. We were never taken by surprise by the Germans. However novel the form of gas which they were using, it had always been anticipated by the chemists of the Ministry of Munitions and by the manufacturerers who were advising them. Our men were never surprised by any form of gas that was used.
In making that defence for these contracts for experimental supplies which have been so sharply criticised, I do not 58 want it to be supposed that I am claiming that this tolerance should extend throughout the whole range of the contracts of the Ministry. It would be intolerable if I attempted any such defence. In regard to standard purchases, the Ministry has got to satisfy Parliament that it exercised such control as were possible in war conditions. But I do make this claim on behalf of the Ministry, that it was the first Government Department to set up an effective system by which contracts charged against the Government were checked. It was under the auspices of the Ministry that that great reform, the costing system, was introduced. Some such reform was obviously necessary. The Government had to buy everything the contractors could produce. You had not the ordinary limitation of supply and demand on ordinary human rapacity—whatever could be produced, that the Government required for the use of their soldiers. In those circumstances some extraordinary method was necessary of checking the ordinary rapacity of the ordinary human being. And my right hon. Friend (Dr. Addison), now President of the Local Government Board, with the approval of the Prime Minister, brought in Sir Hardman Lever and Sir John Mann into the Ministry to undertake this work of setting up a sys-tam of ascertaining the cost of production and basing the prices the contractors were-allowed to charge on those costs. Committees of this House have more than once been directed to the effectiveness of that work, and I am glad to say that that system has now been adopted by most of the other great purchasing Departments. The saving as the result of this system of costing has amounted to £300,000,000. I will give the Committee three or four examples of cases in which they were able to cut down the contractor's charges by applying costing to the production and insisting on purchases being charged for at what were reasonable prices. Rifles fell from £4 1s. to £3 8s. And as rifles were ordered by the million, the Committee will see the significance of that. The Vickers type of machine gun, which was costing £112 when the Ministry took over, was reduced to £80 at the time of the Armistice. The Lewis gun, of which the price was £165, was brought down to £62: there was a saving on this gun alone of nearly £10,000,000. The eighteen-pounder shell, of which 85,000.000 rounds were purchased, came down in price from 59 £l 2s. 6d. to 12s. At a time like this it is just as well that this sort of matter, to which the attention of the public is not usually directed, should be brought home to the mind of the Committee of this House. It is my own personal view that a costing system has got to play a prominent part in the future in this country. There is a great deal of discussion going on as to the means by which profiteering in the necessaries of life may be checked, and I think it well that members of the Committee should direct their attention to the possibility of making a discreet use of a system of ascertaining costs and of using that system in connection with the solution of that difficult problem.
Now I come to the position at the date of the Armistice. Our work had not finished at the date of the Armistice. We had then reached the highest pitch of production. Our mills, factories, and foundries were all working at the highest possible pressure. In war you cannot afford to take risks. Over-insurance is better than under-insurance. There were very few men in this country who thought that the War would end so soon. I was one of the few who ventured to express a sanguine opinion last year, but I was not sanguine enough to suppose that the fighting would be over by the 11th of November, and the best way of ensuring that the war would be over soon was to continue producing as if you were certain that it would last a long time. It was on that principle that production was kept up to the very highest pitch up to the time of the Armistice. Then came the question of liquidating these contracts, and I can quite understand some members of the Committee wondering why this work has not yet been finished. There is a saying that it is much easier to scramble eggs than to unscramble them. That applies with point to the question of liquidating these contracts. It is much easier to make your contracts than to liquidate them on fair terms. If you are prepared to sacrifice values in order to get an immediate settlement, then you may hurry. But if the taxpayers of this country are to get fair terms in connection with the liquidation of these contracts then it is necessary that the work be done by skilled men and in due form. At the time of the Armistice the number of contracts was 34,359, representing a value of £329,415,000. Up to the 31st of May this year there were remaining un- 60 liquidated 7,344 contracts, representing a value of £102,000,000, but of that number there were intended to be completed 5,290 contracts, representing a value of £31,900,000. Having regard to all the circumstances, I believe that the work done by Sir Gilbert Garnsey in connection with these contracts has been a magnificently effective piece of work.
That was one new task which the Ministry had to undertake at the time of the Armistice. I come now to another which bulks much more largely in the public mind. I refer to the question of disposals. Having been the largest manufacturing concern in the world, the Ministry of Munitions has now become the greatest selling organisation in the world. It is only a little over four months since my Noble Friend Lord Inverforth was made Minister of Munitions; the exact date was 11th January, and the first task which he had to face, which was imposed on the Ministry by the War Cabinet, was the disposal of all property and stores surplus to the requirements of various Government Departments. The danger attached to this work will be vividly in the minds of those who recall what took place in connection with the realisation of stores after the South African War. That was a comparatively small operation in comparison with the operation for which the Ministry of Munitions has now been made responsible, of disposing of all the vast stores, scattered over several continents, and of every possible variety, in conditions of-great difficulty, with questions continually cropping up which, if wrongly solved, might cause international complications. Lord Inverforth, in order to have thiswork carried out, set up, under the Ministry, the Surplus Government Property Disposal Board, of which he appointed me chairman. The Board is composed, with two exceptions, I think, exclusively of business men. And here, if it is not out of place for a junior Minister to pay compliments to his chief, I think I might acknowledge the extraordinary success with which the present Minister has succeeded in getting round him business men who, without hope of fee or reward, have given their services and their experience for the benefit of their country. These men are men who if they stuck to their own businesses would, I suppose, be earning incomes running into five figures. But thev are content to serve on that Board in order to help the taxpayers of this country to recover a fair return, or such return 61 as is possible, for the great expenditure made on war material. The Board proceeded to divide up the work of these selling operations into a number of different branches, and to put every section of the work into the hands of a business man whoso business it had been throughout his life to deal in that particular type of goods.
I might say that my chairmanship is nut merely nominal, for meetings are held every day. I have discovered that there are some inconveniences in a politician having to preside over a committee composed almost exclusively of business men. They express themselves to me in regard to politicians with a frankness which I admire, and from which I hope I profit. These men have been in the habit of carrying on their work in their own way, without being responsible to anybody. They have told this man to go and do that, and he has done it; there has been no fear of public criticism. Now they come into a new world, where every action may have to come before this House and Committee for justification, and where the searchlight of the Press is directed upon their operations. Occasionally—it has been only a passing phase of irritability—they have said that if this sort of thing is to go on Parliament can do the work itself. I am glad it has been only a passing phase of irritability; they have recognised that, in regard to matters in which public money, and interests are involved, they cannot have the same absence of criticism or the same right of individual decision as they have in regard to ordinary business operations. I am sure that the House-will wish to join with me in expressing its sense of gratitude to these volunteers on the Board for the readiness, and I think for the success, with which they have carried on the work of the Board. Perhaps my view is coloured, but I am glad to say that it has been supported by the Committee on National Expenditure in its latest report. I hope I have not lost the quotation, it is one of the most precious things I have. It made only one reference to the subject, and. it was to this effect—that in their opinion the securing of proper prices for surplus stores and the work generally are being efficiently done. The Committee will wish to know how much money the country is likely to get from the sale of these surplus stores. The total realised to date is £130,000,000. Of that total £63,000,000 is the proceeds of surplus 62 stores proper, and the balance the proceeds of trading accounts. It is necessary to make that distinction because although the whole of these sales are conducted with the cognisance of the Board, it is only the proceeds of the surplus stores proper that can be used as Appropriations-in-Aid. In regard to trading accounts the Exchequer benefits only by any profit that remains on particular operations, that is to say, by the difference between the price at which the goods were bought and the price they realised.
Much public interest has been shown in regard to our sales of motor transport. I remember there were some suggestions made at an earlier stage that we were such innocents on the Board that we allowed the profiteer and the dealer to get hold of public property at merely nominal prices and to dispose of it at an enormous profit. The story now is rather different. We are no longer accused of being such innocent creatures now, we are nothing but profiteers. It is as profiteers that those of us who are trying to realise this property of the taxpayer are now being denounced. There has been a good deal of criticism, especially in a section of the Press, because, having commandeered a Rolls-Royce car for £ 1,300 within the last few weeks the man from whom it was taken, wanting to have it back again, was asked to pay £2,600, that being the market price. He did not like to pay £2,600 for a car he had sold for £l,300. I confess it does seem on the surface a somewhat hard case, and there might be some grounds for a charge of profiteering. But the fair market price was paid to that man when the car was bought. He never questioned the price, and agreed that we paid the full price. If the market value of the car had gone down to £300, would the seller have been willing to buy it back at the price for which he sold it? In carrying on the disposal of this property the Board intends to secure the highest price it can obtain for the taxpayers. The total sales for motor transport up to date have been £1,108,000. During the past three weeks we have realised £651,000, so that the rate of sale is being gradually accelerated. I would like to say a word about Kempton Park. It has been the object of a good deal of good-natured comment, and some that is not good-natured. As to the past I know nothing, and have no responsibility. Kempton 63 Park was handed over to the Ministry of Munitions by the War Department on the 28th May, a little more than three weeks ago. On the morning of the 29th May, 160 men were engaged in removing the vehicles, and to-day approximately 650 men are so employed. In the fifteen and a half working days from 29th May to 17th June, the total number of vehicles removed from Kempton Park and sent to the Agricultural Hall and to various provincial centres for sale, and to Slough for repair, was 2,852 lorries, 285 motor-cars, 4,104 motor cycles. In addition to these, the following vehicles were placed on the hard road ready for immediate removal: 1,700 lorries, 2,500 cars, 3,000 motor cycles. I shall not venture to give the Committee a date as to when Kempton Park will be completely evacuated, but the Disposal Board having gone in on 28th May, I think it will be admitted that the man in charge has succeeded in effecting a pretty good hustle.
I would like before I leave that subject to say a word in regard to Slough. It was handed over to the Ministry early in May —I think it was on the 2nd or the 3rd. As I have shown, we have removed from Kempton to Slough a very large number of vehicles. I am not going to say anything about the question, which is now the subject of inquiry by a Joint Committee, but this it is right I should say, that I know no other place in the country where these cars could have been repaired in the numbers or in the time I have indicated. We have put at the head of the work there one of the keenest motor engineers in this country. It is a refreshing experience to talk to him. I am sure the taxpayers, at any rate, will be gratified to know that, whatever may be the decision of the Committee as to what happened in the past, at the present time this great engineering depot is serving a very important function in the State. Motor transport is only in its infancy in this country. If we had them available we could do to-day with hundreds and thousands of more motor lorries, if only to clear the ports, which are being congested because we have not facilities for unloading vessels and getting stuff away. This country will have to use, in connection with its national organisation, motor transports on a scale it has never dreamed of before. And, whatever view may be taken as to the best policy for Slough, I am certain that in some form or another it is neces- 64 sary that there should be in this country a repairing depot on a very large scale indeed.
I have so far dealt only with the particular case of motor vehicles. Now I come to a question which has attracted a good deal of public attention in the course of the past few days—the linen deal. I am a fairly close student of the Press. An old pressman, 1 still take art interest in watching the operations, the gyrations sometimes, of some of my successors on the Press, and I notice this remarkable thing about the Press and the linen deal. When they first made the discovery that we had decided to sell this linen for £4,000,000 to one man, the news occupied the front page. It was the subject of pictures, and of magnificent headlines. Gradually there has been a diminuendo, a note of quieting down, until now you have to search for it somewhere on the back page to find some little paragraph where it is just admitted that perhaps, after all, the Government has not made such a very bad bargain. They made the discovery very soon, some of these headstrong critics, that they were barking up the wrong tree; and now they are pretending that they were not barking at all but only exercising their voices. I am prepared before any assembly of business men to take the details of this linen transaction from the beginning to-the moment of the decision of sale to Mr. Martin and to justify it, and I have no fear of the result. What was the situation when the Ministry took over the responsibility for the production of aircraft in 1917? The output of linen was 70,000 yards a month. We then had to embark on an enormously enhanced programme of aeroplane construction, and that programme was one of the most vital factors in the success of our country in the War. We raised our output between February, 1917, and the date of the Armistice from 70,000 yards to 7,000,000 yards per month, and the result was that at the Armistice we had on our hands commitments for 43,000,000 yards of linen for which we had paid 1s. 3d. to 4s. a yard. That price-was a price far in excess of the pre-war price. It was necessarily in excess. I am not making any criticism of the linen manufacturers of Belfast for that increase. The increase was very largely due to the Bolsheviks. They stopped the export of flax, and the Government had to take drastic and expensive measures in order to develop the production of flax. The result 65 was that the price of linen bounded up and we were paying from 1s. 3d. to 4s. a yard for it. The obvious thing to do, finding ourselves with all this linen on our hands, was to try to get it back into the hands of the traders. They understood the business, they knew the details of organisation by which it might be distributed. If it had been possible to come to terms with linen manufacturers that is the course which would have been taken, but, as is often the case in these matters, they took one view of what was the value at which they ought to buy it back, and we took another view. They offered to take this 43,000,000 yards of linen at 1s. per yard, and they were not prepared to go beyond that price. They came forward with a subsequent offer to join with the Disposal Board in selling the linen on a profit-sharing basis.
§ Mr. KELLAWAY
A Committee. They offered to dispose of the linen in conjunction with the Disposal Board on a profit-sharing basis under which the trade would have borne 25 per cent. of any loss below 1s. 1d. per yard, and would have received 25 per cent of any profit over that figure. That was an offer we were unable to accept and I submit that we were justified in so doing by the contract into which we have now entered. Instead of 1s. 1d. per yard we have got s. 8d. per yard, and if we accepted the offer of the linen manufacturers, we should have had to hand over to them over £300,000 which now goes into the pockets of the taxpayers. It is said that we have enabled one man to create a corner in this linen. I do not believe it. You can only create an injurious monopoly when you monopolise something that the public must have and for which there is no substitute. This linen is not the ordinary linen of commerce, it is unbleached and it is of unusual size. It is of a quality such as is not usually used by housewives. It will be a difficult problem to sell that linen commercially, and so far from Mr. Martin having been able to create a corner, he will now have to compete with the linen manufacturers of Belfast, who are now free to resume their ordinary peace output, and if the and he were to attempt to create a corner, they have to fear the products of Lancashire, and the cotton goods of Lancashire have improved 66 so much in quality during the War, that they are very fast approaching to the quality of linen. Then we are criticised for not having put the linen into the hands of retail people. Is it really thought that the Disposal Board did not attempt to take that obvious step? I hope I am not giving away any secret which my Noble Friend the Minister would object to my giving away when I mention that Lord Inverforth carried samples of this linen in his pocket to different retailers in London and endeavoured to sell it to them. I think it is the first occasion on which a Minister of the Crown has acted as a commercial traveller on behalf of a Government Department, but, though he did so, he was unable to secure offers for anything like the quantity or for anything more than an infinitesimal percentage of the quantity of which we had to dispose I do not know the reasons why the wholesale and retail trade would not touch this linen, but touch it they would not. Some of them, I notice since, would have touched it if they could have got it at 6d. per yard, which they declared to be its real value. Mr. Martin has been called a man who wants to corner an essential product. Mr. Martin, whom I have never met, must be an exceedingly courageous man. I do not know what the outcome of this transaction is going to be, but he must be an exceedingly courageous man. I believe if he can set up the necessary organisation that he will be able to sell it at a profit, if not in this country, where it would be impossible for the linen to be absorded anything like fully, then in America or in other countries; and if lie makes a profit on that transaction he is entitled to it, for he will have relieved the Government of an exceedingly difficult problem and the Disposal Board of 43,000,000 yards of linen. I thought it right to deal in some detail with what has been called the "Great Linen Scandal," and another example of profiteering by the Government. If we are profiteering, it has been done in the interests of the taxpayers, and the money-goes into the taxpayers' pockets.
There is only one other branch of the work of the Disposal Board on which I intend to dwell, and that is the sale of national factories. I dwell on this because I know how deep is the interest taken in this subject, especially in the ranks of the Labour party. It was pressed on me in March last, that we ought to use these factories not to get them back to ordinary production, but in 67 order to absorb the unemployed men and women in this country. I put before the House on that occasion the reasons why, an my view, there was no chance of solving the unemployed problem on those lines, and I said that I thought that the best way of using those national factories to reduce the volume of unemployment was to get them into the hands of men who would use them in industries which they understood, and for whose products there would be a ready demand. I will now give to the House, what I could not give, then, a list of some of the industries on which the national factories which have so far been sold are now engaged. The national factory at Gateshead, which during the War was making machine tools, is now occupied in making dog chucks, a trade which up to the present has been almost entirely in the hands of American firms.
§ Mr. KELLAWAY
What I said was, "up to the present almost entirely in the hands of American firms." The Liverpool National Shell Factory will now be used for repairing trams. The Bootle National Shell Factory is being used for the repair of life boats. The Bootle National Gun Factory is to be devoted to general engineering. The Workington National Shell Factory is to produce mechanical toys. Bacup National Shell Factory has been converted from a 4.5 in. shell rectification shop to a weaving shed. The Trafford Park Factory has turned over from billet-breaking to constructional engineering. The Bradford munitions factory, which was doing shell and fuse manufacture, is to be used for dyeing and finishing processes, and so I might go on through a long list of factories which, before we sold them, were engaged in producing deadly munitions of war, and which are now engaged or very soon will be in producing articles necessary for peace. Which is the better way, and I put this to those who have a conscientious conviction that the factories might have been used to deal with the unemployed problem more effectively if we use them as State workshops. Which is the better way, to. get those shops producing things, for which there is a natural demand, or to convert them into State workshops which would only be kept alive by large and continued doses of 68 oxygen from the Treasury. Before I leave this subject, I think I ought to acknowledge the effective way in which this most difficult work of realising the national factories, built for war purposes, and not adapted, many of them, for peace purposes, has been carried on in that branch of the organisation over which Sir Howard Frank presides. It is only due to him that I should make that acknowledgment on behalf of the Ministry. I come now to say a word or two only as to the oil development work.
I should like the House to know that the oil developmeont at Hardstoft has gone on satisfactorily. The flow has now reached the rate of eleven barrels a day, or 400 gallons. I desire to repeat the statement which I made to the House when I referred to this question previously, namely, that it is much too early yet to say whether we have really found an extensive oil field or not, but sufficient has been found to justify the experiment on which the Government embarked.
Having given the new tasks, which have been thrown on the Ministry, the liquidation of the old contracts, and the disposal of works and other things to which I have referred, I now desire to give the House figures of the extent to which we have been able to demobilise our headquarters staff. Obviously the problem was not so easy as in the Departments which have been given no fresh work to do. Here we have these new Departments, but in spite of that fact, I am pleased to be able to tell the Committee that whilst our staff at date of the Armistice was 25,144 persons on the 31st May, it had been reduced by 8,523 persons, and notices were given on the 31st May, terminating appointments which will make the reduction from the date of the Armistice, to the 1st July, 10,060. I think a reduction of 10,000 on a total staff of 25,000, having regard to the circumstance to which I have referred, is a highly creditable reduction.
I have already trespassed so long on the patience of the Committee that I must refer very shortly only to a subject on which I should like to have said more than I shall say now, and that is the position in which this country stands as the result of its war experience, and its position as an industrial producer, and how it has been affected by the War. It is necessary, now that the War has been won by our soldiers, in a triumph which is expressed 69 in the Peace Treaty, that we should realise that, side by side with the fighting in the field, there went on in the factories and in the laboratories of this country, just as deadly a struggle, not between soldiers, but between craftsmen, engineers, scientists, and chemists, and we shall not understand the real inwardness of this War until we get down to that fact. We started the War with German fuses for our shells, with German sights for our guns, with German magnetos and German plugs for our motor transport and aircraft, with German sulphuric acid and toluol for our high explosives, with German optical glass for our binoculars, with German electric bulbs for our submarines and battleships, with German tungsten required in connection with the manufacture of high-speed steel for our machine tools, and with German spelter for gun metals and other alloys. This was a humiliating state of things. Let us be thankful that it was only humiliating and not fatal. Thanks to the ingenuity, skill, and patriotism of British chemists, British scientists, British manufacturers, and British craftsmen, we were able during the War, working under war conditions, and moved by the terrible necessity of preserving our existence, to make ourselves independent of and superior to Germany in the production of every one of those essential materials. I do not wish to become controversial or to draw conclusions further than the facts would justify, but it is right that I should recall the lamentable and sinister circumstance that, in regard to some of these products to which I have referred, Germany secured her predominance in them by the skill and energy with which she exploited British raw material. It was British tungsten that she used to make her highs peed steel. It was British mica that she used for magnetos and plugs. It was British spelter that she used for the alloys with which she helped to destroy British soldiers. I am an old Free Trader, and I suppose I did as much as most men in the Liberal party in the Free Trade election to help my party to win in that great fight; but, no man, whatever his political | views may have been, can leave facts of that kind on one side as if they never had been. I would beseech those who discuss this question to discuss it not from the point of view of men who want to make a party score, but with the desire to maintain and to strengthen British indus- 70 try, to give it a fair chance, to relieve it from the handicap from which we suffered during the early stages of the War.
I have now come to the end of what I wish to say to the House, but I wish my closing words to be words of encouragement and of hope in regard to the future of British industry. I want the Committee to try and see, behind the dry statistical information which I have had to inflict on them, the real magnificence of the achievement which the industry of this country accomplished during the War. We have never been regarded as a particularly quick or ingenious people; we have rather loved the idea that the strength of this country and our position in the world have depended on a certain elemental force of character not associated with any imagination or any grace, but the story of what British industry has done in this War is worthy of the story of what the British Army and the British Navy have done in this War—worthy to stand beside it. When we were brought face to face with threat to our liberty, British industry proved that there was no limit of human effort beyond its capacity. We went on for twelve months in our steady old way, thinking we could win the War because our intentions were good, because we had always loved peace, but the time came when the old heresies were swept away. This tired, old, unimaginative people became grim, determined, alert, and awakened. I can never contemplate that spectacle without recalling the great vision of Milton:I think I see in my mind a noble and puissant nation rousing herself like a strong man after sleep and shaking her invincible locks,This old, tired, and unimaginative people, as we were thought to be, has proved itselfa people not slow and dull, but of quick, ingenious and searching spirit, acute to invent, subtle and sinewy in execution, not below the reach of any point the highest that human capacity can soar to.
§ Captain WEDGWOOD BENN
I am sure everyone has listened with the greatest pleasure and a great deal of information to the very fine speech which has been made by the Deputy-Minister of Munitions, a speech which I do not think was materially improved by incursions into the field of political economy. [HON. MEMBERS: "Oh, oh!"] The House of Commons, I would remind hon. Members, exists for the expression of divergent opinions, and that is my view. I think 71 the hon. Gentleman did quite right in not attempting, on a Vote which only covers one Department, to defend the Government policy of using money recovered by the sale of Government stores in relief of the Estimates of the Departments. It is a subject on which my right hon. Friend beside me (Sir D. Maclean) has said something before, and on which people hold strong views, but it does not seem to be appropriately dealt with on the Estimates of one Department. Nobody who has followed the history of the War could fail to endorse very heartily everything the hon. Gentleman has said about the great work which has been done by the Ministry of Munitions. We began the War without being in the least apprised of what sort of material was required for a European war, and if ever we reach the unfortunate point when he have to launch into another war, I think we shall enter that war also with means as much unfamiliar to the people of that time as the means which were used in this War were unfamiliar to us, and that appears to me to vitiate entirely the arguments which people use for piling up the sort of munitions we are making to-day as if there was the least chance of those munitions being suitable for any other conflict in which we might unhappily have to engage in the future. During the War I was interested in the Air Force, and I can still remember the real feeling of pleasure and relief it was to me when I visited home during leave and my right hon. Friend the President of the Local Government Board (Dr. Addison) was able to show how the appalling deficiency in the supply of aircraft was being made good by the new programme which the Munitions Board was preparing at that moment. But it does seem to me essential, looking at the Department as one dealing with munitions of war, to realise that it is not in the heaping up of things we have got that we can make any preparation of things whatever for any future conflict in which we might be engaged. That, really, is the answer to the hon. Gentleman's tirade against the Free Trade position of this country. The bearing of our fiscal policy on our success in the War is sufficiently well known to need no defence from me, but to have the world as our market, to be in touch with every invention and every country, is a far better means of keeping ahead in scientific research than any foolish policy of shutting 72 up ourselves in an island and imagining in that way we are best in a position to defend ourselves against external foes. The hon. Gentleman was eloquent on the subject of the administration of his Department, and he exhibited a pugnacity which I think is suitable to a Deputy-Minister of Munitions, but he really attacked a great many criticisms which have never been made, and he passed by some criticisms which have been made. It was not only the Comptroller and Auditor-General who had criticisms to make: there was the Committee on National Expenditure, which noted many cases of really bad business mismanagement, and I have not the least—
§ Captain BENN
I am not speaking of the past year, but it is not really appropriate on this Estimate to discuss it except in so far as the hon. Gentleman himself has felt justified in covering the whole field of the work of his Department, which ! was right to this extent, that it is the first occasion on which any Minister of Munitions has really been at liberty to-speak freely of the work of his Department. So that, if I do not attack the hon. Gentleman for maladministration in the past, he must not suppose it is because I do not think such cases could be found and justified. I agree with the Chancellor of the Exchequer, who said a few weeks ago only that in the course of a war you were bound to have instances of mismanagement and waste, not only in connection with the invention of tracer bullets, but you have got to have waste on account of the speed at which things were done and the fact that it was better sometimes to make a mistake than not to take some action immediately. I hope, therefore, the hon. Gentleman will not think I am unable, but merely unwilling, to make criticisms. He said some very interesting things about the costing system. Those who had the privilege during the War of examining the wonderful costing system which was installed at the Ministry of Munitions must feel that its institution and more general use by Government Departments might be a very good thing. There was a Report only a few days ago of a Committee which was dealing with trusts and rings in this country, and it does seem to me that in the costing system which was first of all introduced under my right hon. Friend the President of the Local Gov- 73 ernment Board there is an instrument ready to our hand for checking overcharges by any trusts or rings. Travelling just a little into the inviting field of fiscal controversy like my hon. Friend, I would direct his attention to the fact that trusts and rings are mainly encouraged by his own right hon. colleague the President of the Board of Trade, and I only wish the President of the Board of Trade and his Under-Secretary could have been here today to hear the fine periods of ray hon. Friend in dealing with the necessity of motor cars as the raw material of commerce. It certainly would have been illuminating and would have warmed in his breast some of the old flames of Free Trade to which he was at one time susceptible.
As regards the linen question, I think any business man, regarding the question from a business point of view, who heard what the hon. Gentleman said must have been satisfied, with one reservation, that the Government acted in a businesslike way. I should like to know, however, exactly as to the position taken up by the Belfast linen manufacturers. How far were they in a position to control the whole buying market? How far were they in a position to corner the buyers so as to put the hon. Gentleman when he wont to dispose of his linen completely without demand? I should like to ask whether the retailers and manufacturers, or any of the people who were able to buy the linen, made any effort to unite themselves in the hope of extorting from the Government stores at prices below those reasonably to be demanded, because, if so, that is a form of corner—not Mr. Martin's corner—but a form of corner upon which we should ask for some information.
There are one or two other matters which I think are appropriate to this Vote, some small and some great. Among small matters we have to remember that the hon. Gentleman supplies all these motor cars which flood the neighbourhood of Whitehall and occasion so much scandal, and I should like to ask this question, namely, what exact restrictions he imposes on the supply of these cars. Suppose one of these Ministers who holds a dual post—and plurality is almost a rule on the Front Bench to-day—puts in for a motor-car for each of these separate Departments, what would the hon. Gentleman do, or what would his noble chief do? What form of restraint does he impose to 74 see that some check is kept on this public expenditure? I would like to ask him tins, too. Are these motor-ears allotted to officers? Does the hon. Gentleman say to the War Office, "Here are ten or twenty cars; they are for you, take them, and do exactly as you please with them," or does he say, "I can provide so much mileage for the Ministry?" I understand the answer to the motor-car question is that if a man is paid a high salary, it is worth while providing him with a quick means of transit. That seems a reasonable answer. I do not want a man who is paid a large salary to have to waste time in getting about. It is tantamount to raising a man's salary. It is a camouflage rise in salary. Is that what happens, or does the hon. Gentleman simply say there are so many cars for such a Department, and they have to muddle along as best they can? Would it not be possible to do with these cars what the Air Ministry did during the War, namely, have a car pool and let people apply for a car when they want it, and so put to the greatest possible use the considerable amount of capital sunk in this means of Government transport? That is only a small matter, but it is one in which I believe the public take a considerable amount of interest.
There is another small matter, and that is the manufacture of war medals. I think the hon. Gentleman, in the wide range of magnificent activities for which he is responsible to this House, does include the manufacture of war medals. I do not know whether he can give us any information as to when the medals, particularly the Mons Star and the Overseas Star, will be ready for distribution, and also when the general war medal is likely to be given out. I do not know whether he is qualified to give any particulars about the scope of these medals or on what principle they are to be distributed, whether bars are to be added, whether the Allies are to give medals, or whether it is to be a general war medal. Of course the Committee would be greatly interested to know, though I suppose it is outside the scope of his. Department.
I need not emphasise the good points about the hon. Gentleman's Department, and the words of praise showered on him from time to time, because I do not think any would have escaped his own attention, but there is a matter for the future in which I think the House is very properly interested. We are given to understand that the Ministry of Munitions is to be 75 turned into a Ministry of Supply. Primâ facie, that seems to be a really good business proposition, but we have not seen the Bill—if there is going to be a Bill—for turning it into a Ministry of Supply, and 1 think the Minister above him is still Minister of Munitions of War, and I do not think he is officially known as Minister of Supply. Can the hon. Gentleman give us any particulars about this? First of all, is there going to be a change of name? At some stages of the human career a change of name is very significant. If so—and that is a minor matter compared with this—is there going to be a real assembly under one control of all the purchases of supplies for Government Departments? I suppose if you were to go to the Admiralty, the Director of Contracts would explain that, although sailors wear boots, just as soldiers wear boots, the sort of boot the sailor wears is the sort that can only be bought by a sailor, and the sort of paint used to paint warships is paint which could not possibly be used to paint motor cars. That may be a sufficient reason, but it has not been made plain, and to the ordinary man it does seem a reasonable thing to put under one control the whole purchase of supplies for Government Departments. Coal, for instance, is most important, because, in the first place, you eliminate that competition which simply puts up the price against yourself, an instance of which we used to see in the old aeroplane engines, when the Royal Naval Air Service went into the market to buy an. engine, and the Royal Flying Corps went in and bid against them. Is that sort of thing going on now, and, if so, when is the Government going to assemble, under one roof, all the purchases of supplies for the various Government Departments? That, I think, is a matter of high policy on which the Committee would be very glad to have the opinion of the Government.
There is only one other matter to which I intend to refer, and that is one which also touches a high political principle, namely, the question of royalties. I understand the position to be at present that the Government brought in a Bill which touched the question of royalties during the War, and it was withdrawn on account of the opposition. They passed, in 1918, another Bill, which, I understand, did nothing but give the Government the power to prohibit the boring for oil, and then, under that Bill and the powers of the Defence of the Realm Act, they 76 licensed certain patriotic experts to bore for oil in the Government interest. Of course, the question was immediately raised, "Whose is the oil?" and the reply of the Government was that all these controversial matters must be left until after the War, and they simply licensed someone to bore for oil and to get the oil most urgently needed for purposes of war, leaving for decision afterwards whose property it was. There is one very important difference which I should like to point out between oil and coal. The purpose of the prohibition of boring for oil is, I understand', that if many people bore for oil they are draining the oil in different sections, whereas if one person bores for oil, you stand a chance of tapping a considerable field, or pool, of oil, so that there is no proper ground for saying that the oil which happens to come up through a boring in one person's ground is necessarily oil which has anything to do with his own surface. On this point I think we ought to ask for some definite assurance from the Government that the oil which is secured in big or small quantities will be, by Act of Parliament, declared to be the property of the people and the Government of this country.
§ Sir EDWARD CARSON
May I add my congratulations to my lion. Friend on the very able and very frank statement he has given to the Committee with reference to the work of his Department? What strikes one most of all is how much adverse criticism there always is on occasions when there is no opportunity of answering, and how little criticism there is on an occasion where the Minister is brought face to face with those who criticise him. My hon. Friend seemed to me to grapple with all the criticisms that have been made outside this House on platforms and in the Press, and, may I say, shewing himself somewhat superior in that respect to many of his colleagues in the Government, he gave me the impression that he was not so much afraid of the Press as other Members of the Government so constantly show themselves to be. I can assure him he will lose nothing by his courage in tackling the Press. He may take it, if he will, from me that whatever he does in his Department, whether he sells at a profit or whether he sells at a loss, he will be criticised by sections of the Press, equally unjustly in both cases and very often equally with ignorance. I am not going into the many questions which he has disposed of, I think, in a 77 manner entirely satisfactory to those who have listened to him, and I am very sorry there was not a fuller attendance of the Committee to hear the statement he made. To my mind, it is daily becoming a matter of most urgent anxiety as to how the House is to be carried on if only a few Members on important occasions of this kind are enabled to attend, because there is no other way in which a Member can hear the real truth and criticise the statements put forward to get at the truth than by listening to statements of important operations of the kind to which reference has been made to-day, costing the taxpayers millions of money.
I have risen, however, merely as regards one point, and I have risen because I am a Member of one of the Divisions of Belfast. Reference has been made to a linen deal with a certain gentleman named Martin, who seems to have gained greater notoriety in the last few days than he has ever done in the rest of his life. I always notice that, for some reason or other, even in regard to a commercial deal of this kind, there is a certain section of the Press which cannot help introducing the Irish question, and because the linen was sold to a gentleman of the name of Martin for £4,000,000, and because the Belfast trade thought Martin had made a bad bargain and refused to come up to his price, therefore Belfast is one of the most unpatriotic places that has ever existed in the whole of the United Kingdom, and the Government ought at once to handle the Irish question and settle it so as to put an end to these monstrous transactions on the part of Belfast. That is the kind of petty political mud-slinging which goes on in these papers, which are thirsting to get back to political controversies at the most critical time in the history of this country. My hon. and gallant Friend who has just spoken evidently reads these papers, because, having nothing else with which to find fault in the statement of my hon. Friend as regards the linen deal, he would like to have some information as to whether there has not been a "corner" in Belfast. Who made that statement? For all this, which has been put forward to try in some way or other to sling mud at Belfast, there is not a shadow of foundation.
This is a moat complicated question. I myself had to deal with the early stages of it, and, stated shortly, the Belfast linen trade were invited by the Govern- 78 ment to stop the manufacturing, even to the extent of one inch, of linen for domestic purposes, and to turn on the whole of their mills at all cost to the manufacture of aeroplane cloth, and they did so. Then it is said they charged an exorbitant price. Did they? The price of flax was controlled by the Government. The labour was controlled by the Government, and the Government themselves fixed the price that they had to pay to the Belfast linen manufacturers. And then they are called "profiteers." So far as regards the price, the whole of the mills being turned on for this purpose, when the Belfast manufacturers saw that there was the probability of an armistice late in September, they were only too anxious to get away from this profiteering in making, as it is called, the aeroplane cloth. They went to the Government and said, "You have got very large stocks on hand; we are quite willing now, rather than have a crash in the future, to turn on shorter hours and produce less of this stuff for you under our contracts; let us turn on some of our mills, if you will, and get them into ordinary trade." The Government said, "No, we wish you to go on manufacturing at this price this aeroplane cloth." Then came the Armistice. There were many negotiations. I remember them perfectly well. The Government at one time was suggesting that they should at once stop manufacturing all the aeroplane cloth which was half manufactured, and which could be applied to nothing else. The result would have been that the mills would have had to be shut down, and something between 20,000 and 50,000 people would have had to be turned into the street. I remember all the negotiations we had with the Government at the time. The Government said, "Very well, go on manufacturing cloth, and we will try and see how it is to be disposed of." Of course the political opponents of Belfast give wide currency to the idea that the Belfast traders tried to corner this cloth in some way or other at 3d. a yard. I read that myself in one of these rags. There is not the slightest foundation for it. It is a pure lie, a pure invention. They made many offers to the Government, including the one to which my hon. Friend referred, that of 21st March, 1919. In this they offered that the whole of the stock should be liquidated on Government account, that a Committee should be set up of members of the trade and representatives, of the Government, and 79 that the latter should have the power of veto in regard to everything. They suggested that the whole of the stuff should be liquidated, and that the profits, less 25 per cent., should go to the Government, and that 25 per cent, should be at the disposal of the trade; that the trade should guarantee any possible losses; that any losses arising from the Liquidating Committee's operations should be borne by the Government, and that the Air Department should be reimbursed by the trade to the extent of 25 per cent, thereon. Could a fairer offer be made?
The Government did not take it. They thought theirs was the best way of dealing with this matter. Then comes along Mr. Martin. He offers £4,000,000 of money. All I can say is that from all the communications I have had from Belfast they there think that the Government have made a splendid sale. They wish them luck, and also Mr. Martin, if he can make a handsome profit out of it. But they are entirely unconcerned and unperturbed. Their only one wish is to get back to their normal business, in order that they may get going again the great industry for the purpose of supplying the many needs which are felt in many households at the present moment. That is the whole story on which the mud-slinging has been founded. I am not accusing my hon. and gallant Friend opposite of throwing any mud. On the contrary, I think he stated the case perfectly fairly. I can say this: so far as the Belfast linen trade is concerned they are quite willing tomorrow that any tribunal should be set up and the whole of the transactions investigated, for it will be found that in this, as in all other dealings with the Government, they acted from the most patriotic motives and actions in trying to help the Government in the best interest of the country.
§ Mr. HOLMES
As representing a portion of the district of Derbyshire where the borings for oil have taken place, I am rather disappointed at the information given to the House by the hon. Gentleman opposite. There are those who have been anxious to know to whom the oil is to belong. The hon. and gallant Gentleman the Member for Leith (Captain W. Benn) was correct in saying that for the moment operations are proceeding under the Defence of the Realm Act, but this has not settled any of the difficult questions. I 80 believe there is a universal feeling throughout the country that where oil is found it should belong to the nation, and no royalties should be paid thereon. It is very important that this matter should be settled soon. When the first oil boring took place at Hardstoft, Lord Hartington, the son of the Duke of Devonshire, who owns the land, attended. Perhaps the House will allow me to read one or two sentences from his speech.He had,he said,come there to make it clear that his father's attorneys, acting on his behalf, were prepared to do all that lay in their power to secure a supply of oil for the Government. At the same time he wished to make it clear that the landowners did not permanently give up their rights over the oil. The Government were sinking the well with their sanction. If they had not given that sanction they would have been served with a notice under the Defence of the Realm Act. They did not admit the legality of the regulations—and the Government did not admit it either, or they would not have brought in a Bill to deal with the matter. The landowners were not prepared to let this right or intents stand for one moment in the way of this vital matter of the production of oil necessary for the prosecution of the War. The settlement of the question must be left for the moment, but when the moment for settlement did arrive, they were not prepared to see large fortunes made out of Derbyshire oil without compensation to those interested in the soil, whether as owners or occupiers.Here the Ministry have got a serious contest before them with the ground landlords. I hope they will get this contest over as soon as possible. Oil is accumulating, and one hopes there is a great deal of oil. It is necessary not merely to settle the question of royalties, but also to settle the right of the Government to the oil, or who has the right to refine it, who to sell the petrol, the lamp-oil, and the other products that are going to accrue. I hope the representative of the Ministry, who replies later, will be able to tell us what are the plans which they must have in their minds in regard to this oil. I want to say one word from a local point of view. It has been said, though erroneously, that already in the district things are smeared with petroleum, that the food tastes of it and that the hedgerows are blighted. That was stated by a correspondent of the "Times." There is no foundation for it. I have been down there myself, and find that the statement is not correct. On the other hand, I have been informed by men who have been in California and other big oil districts that in many cases for miles round the country is filled with the vapours of petroleum, 81 and the health of the people is thereby affected. Doubtless the Ministry have taken expert opinion on that particular point. I hope they will assure those who live in that part of the country, where the clarity of the atmosphere is possibly second to none, that the beautiful air and other natural advantages are not going to be spoiled by the petroleum vapours from either the refineries or the pipes. When the right hon. Gentleman replies, I hope he will deal with these points—the national point of view and also the local point of view. That is all I want to say in regard to the oil. But I want to ask the hon. Gentleman to give us some more information in regard to the National Smelting Company which commenced to put up a factory at Avonmouth. Following questions put in the House a few weeks ago, we were informed that this company had a capital of £500,000, but that it had only called up from its shareholders Is. per share, or £25,000, whereas the Government had advanced on debentures over £500,000 of money. Building operations have been suspended. I believe the correct words of the reply given in the House were that the Government Department concerned was considering the matter, and that experts were to be consulted. Perhaps the hon. Gentleman when he replies will be able to tell me what the result of the consideration of the Government Department has been, what the advice of the experts has been, and whether any more money is to be sunk by the company on this factory which has never been completed?
§ 6.0 P.M.
§ Mr. ROSE
I rather regret that the hon. Gentleman opposite (Mr. Kellaway), in making his speech, found wisdom in going back to very ancient history. A great deal of the early story of the Ministry of Munitions might only too willingly have been allowed to remain in forgetfuiness. As, however, the hon. Member has taken the course he has, it seems to me to Le only part and parcel of the old policy of suggesting that this Ministry of Munitions did actually save the country from absolute catastrophe. We have heard the [...]on. Gentleman speak to-night on the timid and unimaginative Briton v ho wakened up to engineering invention in the offices of the Ministry of Munitions. Has the hon. Member never heard of Stephenson, Mawdsley, Fulton, Crompton and Hythe? Can he tell us any great engineer or mechanical inventor who was 82 not a Briton? This is the home, the birth-place of engineering. It has always been so. We needed a Ministry of Munitions to discover all these latent talents which we thought we possessed for years before, but evidently did not! We got our dog-chucks from America! But a dog-chuck is part of a lathe, and the man who makes the lathe makes the dog-chuck. I used dog-chucks when I was an apprentice to the trade nearly fifty years ago. It was made in England. The tool steel we get from Germany is the very best tool steel of the world! Well, high-grade tool steel is a Sheffield production; it is made from Swedish iron, not from German iron at all! It seems to be absolutely essential that all Ministers who have charge of any one of these multitudinous Ministries of ours should make out a case. I venture to say that when what is called the "shell" controversy was on that the inference left in our minds was that the shell king had mounted the steps of his alabaster throne, put on his tin halo— made in Carmelite House—waved his magician's wand and said: "Let there be shells," and there were shells! As a matter of fact, let me quote what Lord Sydenham said, and nobody has yet controverted his statement. I am quoting from a letter which appeared in the "Times" of the 10th of June by Major-General Mahon, He says:What was the result of this strenuous endeavour? Lord Sydenham has said and said truly in his letter published in the ' Times ' on 28th May. The first round completed by the Munitions Department did not become available till the middle of April, 1916.' Does the man in the street realise what this means? It means that the loud trumpets which proclaimed the wonderful works of th.9 Ministry of Munitions, the speeches up and down the country and in the House, retailing what 'I' did and what 'we' did, the whole propagandism of political claptrap, in reality proclaimed the achievement of the War Office and the solution of the problem of creating a vast supply out of nothing.Most engineers know that the preparations for making high explosive shells were made by the late Lord Kitchener. A good deal more might be said on that topic, but as I anticipate that the House will be engaged before long dealing with this promised Ministry of Supply Bill, the object of which is to perpetuate the Ministry of Munitions under a new name, much more will have to be said then, and there are some things which necessarily cannot be said now which may be and will 83 be said then. I want to disabuse the mind of the Committee in regard to any idea they may have that I am trying to be hypercritical. I have no concern about this linen deal. I have nothing to urge against the claim which the hon. Member has put forward about the necessary cost of experimental work. As a practical man I know something about that, and I ought to know. That is not altogether what we want to grumble about, if it is necessary to grumble. There is one thing upon which the Labour party is particularly, and I think rightly exercised, and that is the disposal of the Government factories. I am bound to say, and I think it only right to say on this point that I do not see quite eye to eye with my colleagues, most of whom are now at Southport. I have never believed and I have never found any evidence yet that convinces me, as a practical engineer, or which has convinced the scores of practical technical and industrial engineers whom I know, that it was ever necessary to build factories. The fact that it was not necessary is found in this collateral fact that the whole of the factories they built, equipped or acquired, 250 in number—even those that have been finished, and very few of them were ever finished—the whole produce at market price would not cover the cost of erection and equipment.
Take one particular case, that of the huge machine gun factory at Burton-on-Trent. There was no great shortage of machine guns that necessitated that. There was no shortage of equipment that necessitated the setting up of such a factory, but that factory was never finished, and is not now finished, and all the machinery is there lying in packing cases, and not one machine has been set up. I was passing with an engineer friend, who is a Member of this House, through Guide Bridge last Friday, and I had not been in that district for several years before. I was surprised to see acres and acres of the place covered with buildings. I asked my friend, "What are they building there?" and he replied, "That is an aerodrome and aeroplane works." I further inquired, "What are they doing there?" and the reply was, "Nothing, they never have done anything yet there. The man who got the contract for that was a publican, and it is the talk of the neighbourhood about here." These are not isolated but typical cases. I offer a 84 challenge to the Ministry of Munitions and the Government to demonstrate, not by figures concocted in their Departments that the whole products of the whole of those 250 factories put together would cover their cost. It seems to me that in regard to a Ministry with such a past it is almost impossible to deal very closely with its past.
We have heard something to-night about a wonderful Machine Tools Department. I think this is the most staggering instance of Departmental impudence that has ever been suggested. The Machine Tools Department is the most hopeless failure of the War, and one of the results has been that the big machine tool makers have been allowed to charge the Government not the makers' and agents' price but the users' price, and they have been so patriotic as that. As every practical man knows, the agency percentage varies very considerably, and often assumes very large proportions. In the course of the War they have been allowed to add to their prices, first 40 per cent. and then 10 per cent. Some of them have been allowed to compound and actually charge 54 per cent., while others have only been allowed the 40 per cent., and then an additional 10 per cent. They have also been allowed a bonus for standard tools, which were not required by the Government. They would never have been left on their hands, because they had ample opportunities of selling them at 15 per cent. more than the Government price, which was the usual price. All these things have been done in the interests of what is called organisation.
There was a fiction, and a very pleasant fiction, that a great organising genius came into our midst, sent from heaven, for the special purpose of organising the engineering industry, and he was supposed to be a person possessed of prodigious driving power. It was the present Prime Minister. He was the person who organised the engineering industry, and he was the person possessed of prodigious driving power. I admit he possessed driving power, for he drove the industry into chaos and he drove all the workers to the verge of exasperation and kept them there. There is no doubt about his driving power, and all this that was done in the interest of organisation had far better have been left undone. I am not speaking only the opinion of an individual, because I can quote an opinion respected in this House, namely, that of Alexander Adamson, who 85 for some time was director of the Vickers Maxim Company at Barrow. In a letter he wrote to the "Times," he urged that it would be far better to leave the engineering industry to its own devices, that we should get a better output and probably get it at a more reasonable price, and there would certainly never have been the industrial difficulties there have been under the auspices of the Minister. There are a great many engineers in the country who had no sort of sympathy with the Ministry controlling the engineering industry, and they have no more sympathy now than they had then. This Ministry, with a record that is not at all enviable-and I am not at all sure it is very creditable—comes down here and asks for £185,000,000 with the assurance of Mr. Montague Tigg, when he was borrowing half-a-crown. This does not seem to me to be quite a fair way of treating the House or the country.
There is another phase of the question. This is one of the inevitable outcomes of bureaucracy, and unless a tight hand is going to be put on all this Ministry making and expanding, you are going to have the same chronicle for the next ten years—a chronicle of wanton waste and extravagance, and of impedimenta to all that is good for us in every department of our public life. I assume the House has made up its mind to grant this money, and am sorry there is to be no organised opposition to it. I do not think the Ministry of Munitions is fit to be trusted with what amounts practically to a blank cheque. The assurances we have had to-night in regard to the reduction of the staff leaves mo colder than ever. Whatever could they have been doing with 25,000 officials? We are told that now they have more work to do than ever they had before, and they can reduce the staff to 15,000. What do they want with 15,000 officials?
I want to say a word or two about this wonderful Costings Department. I know more than I feel at liberty to say to-night, because, as a matter of fact, I am a member of a Committee on public expenditure, and until certain matters are reported upon I do not think it would be quite within my province to make any statement concerning them. The Costings Department appears to have devoted its energies exclusively to three or four standard productions, particularly shells, and we have heard ad nauseum how these wonderful people costed down the price of eighteen-pounder shells from 18s. something to 12s. 86 Those were not the figures given to me previously from another source. I was told that they had brought the price down from one guinea to half-a-guinea. A discrepancy of one or two shillings on 200,000,000 or 300,000,000 shells does not matter. What did you get for 10s. 6d.— a shell ready for the gunners? Nothing of the sort. It was simply the steel shell case. They never costed the fuse, the copper band, or the filling. I cannot make out what the contractors were making out of it before. As far as I know from information inside the workshop, it is now nearly three years since the price was reduced, and it strikes me very forcibly, if there were an inquiry, that we should find that it was reduced before there was any Costings Department at all. I venture to say that it was reduced before the Costings Department was set up. It does not seem to me right, and it does not seem to square with one's sense of public probity that Parliament should be asked to grant a huge sum of money for a purpose that it does not understand, and by a method with which it has been inadequately acquainted.
When is all this million squandering mania to cease, and, if it does not cease, where is it going to lead us? People talk about organising an industry or a Department. Blessed words "organisation," "co-ordination," "unification," "regularisation"! It does not matter how you phrase it. You can call it by any word you like, but you will never make sanity out of these bedlamites. If there are millions to fling about, let us all have a hand in it. Let us have a chance of doing some of the flinging ourselves, and. not hand it over to a Ministry to fling them for us. I dare say that the Disposal Board is doing a wonderful work, and I gladly subscribe to the testimonial of the Committee of which I am a member. It appears to us to be done efficiently, but they should never have them to dispose of. It certainly has been my conviction all through that there never was the necessity to build these factories, and there is proof of that in the fact that not half of them are finished to-day and in not a third of them has a stroke of work been done. Seeing, however, that they are there, and that we have got them, the least that we can do is to make the best use of them that we can for the benefit of the industrial classes who, after all, will have to pay most of the cost.
87 I do not think that I ought to sit down without emphasising my objection to departmentalisation. Our esteemed friend Mr. Dooley, in his essay upon "Millionaires," pictures Andrew Carnegie contemplating a workman, and he makes him say, "Is the poor man starving? Then 1 will give him a free library." It seems to me that the great organising geniuses who guide the destinies of our people say, if there is anything wrong with the body politic, "We will have another Minister." They set up the Ministry of Munitions, the most inept of any Ministry ever set up in this or any other country. We can tell that from the Bills that they keep putting in. We have one to-day for £185,000,000, and there was one for about £700,000,000 last year. I do not know whether the House is satisfied either with the quantity or quality of the goods which we have got in return for all these millions. As one individual, I am not. I do not think that my countrymen quite realise what we all lost when the "Hampshire" went down with the man who told us that the War would last three years. Had he been left alone and had he not been entangled with all these sordid political intrigues it would have been over. He was the wisest and the best counsellor that this nation has had for generations. He was a great soldier and a great engineer, and he it was who understood that this was an engineers' war and why it was an engineers' war. We owe the Ministry of Munitions no thanks. We owe to their mismanagement, their extravagance, and their waste a period of another year of war and the loss of a million lives of men who ought to be with us to-day.
§ Lieut. - Commander KENWORTHY
The right hon. and learned Member for the Duncairn Division (Sir E. Carson) remarked on the fact that there had been very little criticism of the Ministry, but if he had heard the speech of the hon. Member who has just sat down (Mr. Rose), to which we have all listened with great pleasure, he would have been satisfied that there had been some criticism and criticism very much to the point. I will make one or two criticisms myself, and I will go straight to the greatest criticism of all. It is that seven months after the Armistice, which proclaimed the complete defeat of our enemies in the War, and on the day when we get the joyful news that the German Government will 88 sign unconditionally our peace terms, we should be asked for Appropriations-in-Aid of £185,068,000 for a Ministry which was not in existence and which was not necessary in 1914, when we had a Navy second to none and we had an excellently-equipped and well-organised Army. When the Navy second to our own has just been scuttled by a breach of faith by its crew at Scapa, when the world is sick of war and every one in his heart knows that we want peace and that peace is the only hope for Europe and for millions of people in Europe, we are asked to vote £185,000,000 for this Ministry of Munitions, which is now going to be the Ministry of Supply, and' is apparently to be perpetuated for ever. What is it going to lead to? What have we fought the war for? Hotels, which are badly needed, are still occupied by the 15,000 officials which remain. I congratulate the right hon. Gentleman upon having got rid of a number. I am sure he is to be congratulated in view of the- policy of the Government. It is the whole policy behind which is at fault. We are starting again on a wasteful expenditure on armaments, and it is going to lead' us to bankruptcy if not into another war. That is my major criticism. I cannot altogether blame the right hon. Gentleman or level this criticism at him. It is the whole policy of the Government which is at fault. It shows that we do not understand what our policy is going to be, and apparently we do not grasp what our fate will be if we go on with this madness. I speak plainly, but I intend to touch upon that topic no further.
The speech of the right hon. Gentleman as regards its technicalities was, I am sure, of great interest to the Committee. I was somewhat interested to hear his left-handed attack upon the great principle of Free Trade, to which he owes his seat in this House, and for jettisoning which he is apparently excusing himself. He used an argument which was continually used during the War by certain organs of the Press in trying, quite honestly, to persuade the country that tariffs are the best thing for the country. He said that at the beginning of the War we had to provide ourselves from abroad with certain necessary weapons and instruments for the use of our forces. We know that it was necessary by some arrangement to get in certain articles even after the War was declared. The right hon. Gentleman surprised me, with 89 my knowledge of the subject from bitter experience, when ho said that we obtained our fuses from Germany. I did not know that before. It was a dreadful state of affairs. He did not mention periscopes for our submarines—an atrocious state of affairs. Even those were not manufactured here. We had also to get binoculars. Therefore, he said, we must in future have protective tariffs. Nothing of the sort. That accusation should have been directed against the General Staff before the War. They were the people who should have seen to it. They were to blame. Optical glasses for gunsights and periscopes for our submarines are not matters in respect of which we can blame the Government of the day, except that they arc responsible for the War Staff. They are matters for the War Staff. The War Staff should have protected the key industries in the sense that those key industries really constitute munitions of war for this country. The argument is sometimes used that corsets are necessary for the young women who have done such excellent work in the shell factories in this country and that, therefore, as they are necessary for munitions of war, we ought not to be dependent on French corsets. We are told that they must be protected for that reason as a matter of high strategy. I hope we will not blame the lack of optical glasses, periscopes, and fuses on our well-tried system of Free Trade in the past, but that the responsibility will be put on the right shoulders— those of the General Staff, who failed to make the proper preparation for war.
With regard to the sale of the assets of the Ministry of Munitions, there are certain things which the Minister for War says we cannot use to any useful purpose. He tells us of surplus guns, shells, and poison gas, and says that these things are to be sent abroad to our Allies. But there are certain other articles of great value in the possession of the Ministry, such as cloth, which could be converted for use by civilians. It is excellent Army cloth. There are also petrol, boots, and a great many other things which could be used equally well for civil as for war purposes. I hope some estimate will be given to the House of the amount of public money we are expending in sending these articles abroad—articles which we could make use of in this country. I quite admit we cannot make use of the guns and shells, but in regard to the other articles it would be interesting to know what it is costing to send them abroad. We have more tanks 90 than we know what to do with. They apparently are being shipped to Russia They are heavy things and take up a lot of freightage. If there is one thing we are short of it is freightage space. That shortage is keeping up prices more than anything else, and if you are going to use our shipping to send these articles abroad, I think it would be well to know what this policy is costing us. What, for instance, is it costing us to send the stores of the "Cordon Sanitaire" abroad? That brings me to one little point which afforded me considerable amusement, and that was the linen question. I will only deal with one aspect of that question. We are told that the Bolsheviks arc responsible for the present high price of linen, because they have stopped the export of flax from Russia, We are glad to know that Peace is going to be signed soon. We cannot blame our German enemies, and so we are forced back to blame the Bolsheviks. We are told by the right hon. Gentleman that they are responsible for the high prices of linen. We cannot accept that view. Flax formerly came from Russia through the Baltic and the Black Sea. The Turks and the Germans during the War have had command of the exits from the Black Sea. The Germans have also commanded the Baltic. Now, the only other routes through which flax could be exported were Kola and Vladivostok; but it has been impossible to get flax out from those places because the railways were monopolisd for the War. Therefore the export of flax from Russia to this country practically ceased as soon as war was declared and long before either the first or the second revolution. There is plenty of flax in Russia now, and they would be very glad to let us have it at knock-out prices. If we could only take shipping over there we could get excellent flax and hides, in exchange for tobacco and boots for example, at wonderfully low prices, and, so far from the Bolsheviks preventing the export, they would be only too ready to let us have these things. I hope the right hon. Gentleman, when he comes to reply, will deal with these various points.
§ Sir ASHTON LISTER
I venture to intervene in Debate for the first time since I have been a Member of this House because the subject which has been talked about is one with which I have a personal acquaintance. Although I have been here since the commencement of this Parliament, I have not listened to any speech which afforded me greater pleasure than 91 that which we had just now from the Secretary to the Ministry of Munitions. I think every Member of this House desires to be fair, and, in my opinion, it would be most unfair, in dealing with a matter of this kind, if we did not do justice—bare justice—to the Prime Minister for his action as Minister of Munitions. I give place to no one in my desire for retrenchment, but I must say that when the Prime Minister came down to Bristol, as the first Minister of Munitions, called a public meeting and issued invitations to everyone in the engineering trade in the West of England he simply caused a revolution. He inspired us, and from that day in the West of England we turned our attention to supplying what were the vital needs of our Army. I should feel myself wanting in courage if I did not state that in my opinion, had it not been for the intervention of the Minister of Munitions of that day, had it not been for his great imagination and his courage in doing away with and discarding all conventional systems of buying ammunition, we should not now have had the Germans willing to sign peace.
With regard to the prices paid for munitions, am in a position to know at first-hand that the Ministry of Munitions have not paid a farthing more than they were bound to. Take the case of primers. A large contract was given to a firm at the price of 4s. 6d. each, but within a very short time that price was reduced by the Minister of Munitions to l0½d., at which figure between 20,000,000 and 30,000,000 were manufactured. Thus it is clear that at that Department we had men who were determined to spend the money of the nation to the best possible advantage. I should like to say a word or two about the national factories. In many cases these factories are converted buildings. There was one in the city of Bristol. It was bought for about £6,000. Probably £2,000 was spent upon it. It sold the other day for £18,000. I wish all the cases were like that. There was another in my own county, the county of Gloucester. It was a great filling factory near Gloucester. It was a building put up as cheaply as possible. Not a penny was spent on it more than was absolutely necessary, and when the factory was closed the manager of it, a Government official, was given the very highest position in one of our biggest industrial engineering concerns—a proof that the Ministry acted wisely in the selec- 92 tion of their managers. With regard to the Disposal Board, I am engaged both as a large manufacturer and as a merchant in machinery, doing business in a great many parts of the world, and I can only say this, that I congratulate the Disposal Board on the splendid prices they are getting. With regard to the costing of this Department, I am satisfied that it saved the Ministry of Munitions many millions of pounds by placing it in a position to say to any manufacturer who demanded exorbitant terms that if he was not prepared to supply at the prices offered they would take over his factory and run it themselves or pay cost prices. I hope the policy adopted by this Department will be followed in other Departments of the Government in future.
With regard to massed production, I think it will be satisfactory to everyone in this country to know what has occurred in that regard. We have lost an immense amount of money. During the War we have probably spent all the savings of a hundred years. Never mind, we have won the War. We must forget all that. We must turn over a fresh leaf. We must manufacture and export more goods. Let us have a bigger turnover. Let us pay our people good wages and see to it that we do not restrict production. The lessons that we have learned during this War through the Ministry of Munitions and through taking over the large factories in this country will enable us to compete in the world's markets in the future better than we could before the War. Massed production has taught us how to produce cheaply. I mentioned just now that an article contracted for at 4s. 6d. was afterwards produced at a profit at 10½d. Higher wages were paid and the sole reason for the difference was that a better system of production was adopted. Standardisation will be the making of this country when we once settle down to work again. There is no country in the world that has better engineers, either operative or inventive, than this country, and if we look after our own industries and see to it that we do not restrict production, I am quite, sure that at no distant date we shall be able to repair the ravages of war. If we do, we shall have to thank the Ministry of Munitions for giving firms opportunities for making thousands, tens of thousands, and even millions of one article they never dreamed of making before. I congratulate the Ministry. It is all very well to alter our 93 opinions now that the War is over and Germany has succumbed. We have been through the fire and have come out of it. Do not let us spend our time on recriminations, but rather in reconstructing our country, producing goods better and cheaper than we did before, and then the time will soon come when we shall be able to look at our financial prospects with more satisfaction than we can at the present time.
§ The PARLIAMENTARY SECRETARY to the MINISTRY of MUNITIONS (Mr. James Hope)
The Committee as a whole will wish to congratulate the hon. Member who has just spoken on his first speech in this House. I trust it will be by no means his last. Appreciative as I am on general grounds of the merits of the speech, I am not less appreciative of it because of the fact that it gives me nothing to which to reply. I come to the speech of the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy). Into the questions of policy, such as the fiscal policy and our relations generally with the de facto Government of Russia, I do not follow him, but I am bound to correct him on two matters of fact. First, he said that we were asking for £185,000,000. If he will look at the Estimates he will see that what we are asking for really is nothing at all. What we are asking for, nominally, is £l,000. It is quite true that the expenditure for the year is adumbrated at £185,000,000, but then there are receipts equally for £185,000,000. The truth is that there are large balances carried over both on the debit and credit side from the last financial year, and, just as we have to pay very large sums in respect of commitments entered into long before, so we shall get very large receipts from the surplus goods we have. As a matter of fact, although, for a technical reason which I need not enter into, the receipts are estimated at a certain sum for the purpose of bringing the vote before the House, the receipts will in all human probability, and I am not sure they have not already proved to be so, be very much greater. We have to pay the debts incurred before and realise the assets we have acquired before. One word about flax. Whatever be the reason, it is the fact that up to the time of the Bolshevist revolution we did, not without difficulty or risk or heavy rates of insurance, get flax from Russia through Archangel. but from the time the Bolshevist revolution 94 came to pass we ceased to get it. The main hope of our getting it from the old sources with safety and cheapness will be the complete restoration of order in the Baltic provinces, which are the main sources of flax supply. The hon. Member for North-East Derbyshire (Mr. S. Holmes) has spoken about oil. Our information entirely concurs with his as to the exaggerated accounts that have been given of the ill effects of the oil workings in the neighbourhood. A good deal of damage has been caused by the accounts of petrol blasting the hedgerows and the like. With regard to refining, I am informed that it is proposed that the refining shall not be done in the neighbourhood at all, but that it should be done in Scotland.
§ Mr. HOPE
No, a pipe-line will not be run, but the refining will have to be done at the refineries in Scotland. With regard to the British Smelting Company I am sorry the hon. Member did not give notice. It is one of an infinity of contracts and transactions, and 1 cannot carry the present position in my mind at this moment. If the hon. Member wishes for further information, we will let him know what is the exact position now. When there are thousands of contracts still unliquidated, he cannot expect me to be apprised of the exact position of that contract at this moment. Something has been said about linen by various people.
§ Mr. HOPE
That subject has been alluded to by another speaker, and I have made a note of it. I will come to it in a moment. The right hon. and learned Gentleman the Member for the Duncairn Division of Belfast (Sir E. Carson) said a few words as to the relations of the Ministry to the Belfast linen manufacturers. I may say at once, in answer to what he said, that we have no evidence whatever that any undue influence was used by Belfast manufacturers to prevent normal buyers in the trade from tendering for the surplus linen which we had in such large quantities. The whole history of the transaction is very simple. Negotiations took place with, from the point of view of the Ministry, unsatisfactory results. The retailers 95 would not take it in any quantities. The original manufacturers, though they made offers perfectly bond fide, did not come up to what the advisers of the Ministry thought was the proper price, and when at last, after long negotiations, a buyer did come forward who was willing to pay an adequate price, absorb the whole of the stock and pay a price far greater than had been offered, it was felt it was only good business to close with that offer. That is really the beginning and the end and all there is to be said about it. The hon. and gallant Member for Leith (Captain W. Benn) raised various points, among others that of oil, to which the hon. Member for North-East Derbyshire has also alluded. The difficulties to which both hon. Members alluded have been fully present to the minds of the Government, the legal question involved and the question of policy alike. It is not a matter upon which the Department, as a Department, can take action. It raises too big issues to be decided in any one Department. The Government as a whole are considering it and are about to appoint a strong Committee to report upon policy and the means of carrying it out. The matter has gone beyond us, and, until action is taken by the Government as a whole, I fear that I am not in a position to answer the questions that have been put.
The hon. and gallant Member for Leith raised a point as to the position of the Ministry with regard to motor cars used by other Departments. The position of the Ministry is simply this: If the other Departments convince the Treasury that they are entitled to the official use of a certain number of motor cars, the Ministry of Munitions supplies them. The Ministry of Munitions are not the arbiters in the matter; the Treasury is the arbiter in the matter. It is the business of the other Departments to satisfy the Treasury that they require a certain number of motor cars for official use. When they have satisfied the Treasury, they come to us and we provide them. As will be seen by an answer given by the Leader of the House the other day, the whole matter is under revision, and the Committee may be assured that any abuses there may have been in the unrestricted use of these cars will very shortly be checked. I may say with regard to our own cars that at the Ministry of Munitions we do not assign them to individuals. We have a pool of them for the general use of the 96 officers of the Ministry. We, too, have to justify our use of them to the Treasury. The hon. and gallant Member for Leith also raised the question as to the manufacture of medals. We have taken that over at the request of the War Office. A Department has been set up at Woolwich, and the manufacture will begin in the course of a few months. It is a new liability of the Ministry, and has been undertaken at the request of the War-Office. With regard to the Ministry of Supply Bill, the object of that Bill is to get rid in the future of the unlimited competition between different Departments in the same market. Where you had different Departments drawing upon the same market and competing with one another with public funds for the same goods, of course it was extremely harmful to the efficiency of the public service as a whole. The experience gained during the War leads us to hope that it will not be allowed to be pursued in future. As to details of the Supply Bill—when it can be introduced, and its precise extent—that, of course, is not a Departmental matter, but a matter for the Government as a whole, therefore I must defer any further remarks upon that Bill until it has been actually introduced. Various criticisms have been made as to the national factories and other enterprises of the Ministry not having been conducted on proper commercial lines. These enterprises, at the time when they had to be set on foot, were not started and were not conducted with a commercial object at all. They were started and conducted with only one object, that was the winning of the War. Judged from that point of view, I think we may look back upon them with very hearty national satisfaction. Of course, a different standard of criticism must now be applied. We quite recognise that the old excuse, which was a very genuine excuse, that it had to be done in a hurry under the strain of the terrific national crisis, will not hold good now. We shall have to justify our expenditure on policy and on detail alike. I trust that when next year my right hon. Friend opposite (Mr. Acland) comes to review some of our transactions, he will find there is very little to criticise. In the time through which we have passed supply was our great aim. Supply was obtained, and by the action of the Ministry we have been led to the great result announced to us this morning.
§ Mr. BIGLAND
The Parliamentary Secretary has disclosed to us many things which have been kept secret until the happy time has come when peace is with us, and we may talk of some of the things which the Ministry of Munitions did in the past three or four years. I should like to say a word or two as to the splendid work which has been done by the Ministry with regard to the Propellants Department. I was appointed Assistant-Director of that Department in January, 1916, and one of the triumphs of what was accomplished at that time was the securing for munition purposes of the glycerine required in the preparation of cordite. We were in a very difficult position in that our demand for glycerine was double our home production and the Ministry of Munitions at that time had made a purchase from all the producers in England for the period of the War at £59 for the crude and £87 for the dynamite quality. When the extra quantity was wanted we found the markets of the world had gone up, in some cases from £120 to £200 a ton, but we were able to continue to supply the War Office with their cordite at a price from which the glycerine did not advance. That was done by the action taken by the Minister of Munitions in requesting the India Office and the Colonial Office to send cables to every part of the British Empire that oil seeds and nuts containing glycerine should not be exported outside the Empire unless the buyers undertook in writing to deliver the glycerine contents at the British Government's price. That simple action worked marvels. From all parts of the world there came these demands for oils produced within the British Empire, and when it was found that they could not be obtained unless the buyer was willing to send back the glycerine to Great Britain at the British Government's price, we found time after time that the necessity of the world to obtain these raw materials was so great that they were willing to fall in line with our demand, and by that means several rather strange things came to light. One was that all the whale fisheries in the world had to come to the Colonial Office for a licence to fish in the Antarctic Ocean, because none of them could fish without a land station and the Colonial Office, governing South Georgia, and having a certain amount of control in South Africa, Australia, New Zealand, and all the countries where land stations were possible, had instituted a system of licence and the 98 Ministry of Munitions was clever enough to see that by writing across the licence the further condition that during the period of the War, in consideration of the British Government apportioning them coal and stores to carry on their industry, they must bring the whole of the oil to this country in order that we might get the glycerine for our cordite. All the Norwegian and other fishermen fell inline with the demands of the British Government and in 1916 we received the enormous quantity of 100,000 barrels of whale oil, 10 per cent. of which was glycerine, and by that means and by many other drastic-measures imposed on neutral countries we obtained our glycerine at hall the price we could have got it in many other countries in the world.
I might give the instance of the great steel trusts of the United States, which wanted palm oil to carry on the manufacture of tin plates. They requested that they should have 12,000 tons during the year, and we informed them that they could not have any palm oil unless they sent the glycerine back. The result of the negotiations was that they bought glycerine in Spain, in the Argentine and in other countries, and paid as high as £210 a ton for the glycerine and delivered it to the Ministry of Munitions at the price of £87, which to my mind was a triumph of the possibilities and resources of the British. Empire and the fact that those resources were so urgently wanted by other countries in the world. In Holland they have a great industry of candle-making, and they could not make the candles without palm oil from West Africa and tallow from Australia, and we imposed the condition that if they wished to continue their candle industry they must return the whole of the glycerine to the United Kingdom at the British Government's price. After difficult negotiations they bowed the knee and accepted the inevitable, and we obtained thousands of tons of glycerine from Holland from the very fact that we were the sole providers of the raw-material that they required. So through the action of the Ministry of Munitions and their foresight in this matter we saved this country, I might almost say, millions of pounds in utilising the raw materials that we have within the Empire for war purposes. It is so easy to criticise Government Departments, and there are so few who tell the good things they have done during the War, that I felt I should like to say there are many cases where the 99 foresight and acumen of officials in the Ministry of Munitions have done wonders in securing for us necessities for the War and have done their part in bringing about the magnificent position in which we find ourselves to-day.
§ Colonel YATE
I listened with some interest to the Financial Secretary's statement about the use of motor cars, and I should like to tell him a little anecdote I heard the other day. There was a disabled officer working in one of the offices. His leg gave him a good deal of trouble, and he went to the head of his office and asked if he might take one of the cars he saw lying idle to the place where his leg was fitted to try to get case. "No," was the reply, "the orders of the Department are so strict that you cannot possibly use it." As a. matter of fact, on the next day seventeen of these pooled motor cars were put under orders to convey members of the Department to the Derby.
§ Colonel YATE
I will not mention the Department. I do not want to give names. I only mention it as an instance of what is going on in the use of Government motor cars. It was told me as a fact. My hon. Friend says he is inquiring into the use of motor cars.
§ Mr. REMER
I should like to refer to the Disposal Board. I have a peculiar knowledge of it because very recently I was asked to act as chairman of one of the advisory councils to the Board, and therefore have some first-hand knowledge as to how they have conducted their work. It is work of most extraordinary difficulty. If timber could come in for such treatment as linen has got we should be very thankful indeed. I think the Government has made a most excellent bargain and one which shows great credit to the Disposal Board. It has to face the question of an enormous stock such as no merchant, manufacturer, or dealer could possibly handle. In the matter of timber it is frightening the market out of its wits, because they do not know exactly what the Government is going to do. They do not know 100 whether the market is going to be flooded and prices brought down to a very low level. A great deal of caution has to be exercised in order that it shall be put discreetly and wisely on the market. I am sure in a far greater sense this must have been the principle which animated the Government in the linen question, because if they had put it on the market in an indiscreet way it would probably have ruined the manufacturers for many years to come. To read articles which have appeared in certain newspapers one would think it was quite an easy thing for the Government to put the linen on the market and there by obtain the profits which are going to be obtained, as it is said, by Mr. Martin. The possibility, in my opinion a. very acute one, that Mr. Martin might make a loss does not seem to enter into anyone's mind. In order to put this linen, or any other good's, on the market you would have to set up a new Department to start, with. You would probably have to have a very large staff of people going round to sell it and a very large number of people to attend to the clerical side of it, with the result that instead of hotels and museums being released these places would be retained for a very great length of time. The difficulties that I have experienced is that there are too many officials who are too anxious to keep hold of their jobs and do not want to dispose of the material they have on hand. I think the kind of bargain which has been made with Mr. Martin is a most excellent kind of bargain, in order that you may get rid of the material in a very large amount. I am sure the proper way to dispose of these stores is for the Government to cut the loss in the quickest possible way. It is very much easier, and 1 think any business man will agree that it is best to make your sales in one large amount than to make them in several small ones. If the material has been sold at too low a rate it is better that it should be sold in that way, because it is the easiest way for the Government to handle the matter
We have heard something about the compensation which is paid to manufacturers for the loss of their contracts. That is also a question upon which I have some first hand experience, because my firm had a contract in existence when the Armistice was signed, and they were compensated for the loss of that contract. We would much rather have gone on with the contract. We are landed with a very large amount of stock which is very little use for 101 anything else, and I would willingly pay back to the Government the compensation we have received if they would allow us to complete our contract. One hon. Member has stated in criticism of the Department that the Ministry of Munitions have paid too much for their materials and for their contracts. A relation of mine, who is at the heart of a large manufactory for machine tools, has told me that in the year prior to the formation of the Ministry of Munitions his firm made a profit of £40,000. In the year which followed the formation of the Ministry of Munitions they made a loss of £5,000, and in the year following that they made a profit of £2,000. It seems to me that these figures are quite conclusive as to the efficacy of the control which the Ministry of Munitions have had over the manufacturers.
The hon. Member for Leith (Captain Wedgwood Benn) made some observations which seemed to me to favour the question of centralised buying, and I noticed that in the Ways and Communications Bill there is a Clause which deals with the same thing. The mind of the Government seems to be in favour of centralised buying. I do not know whether all the buying for all the different Departments is to come through the Ministry of Supply, but I would like to say a word in strenuous opposition to anything of the kind, because I think it is bad. It is a very good thing in theory but it does not work out in practice. The great firm of Vickers, probably the greatest industrial firm in this country, have several works in various parts, such as Barrow and Sheffield, and they have works near London. They do not do all their buying from one office in London. Barrow buys materials from Barrow, Sheffield buys materials from Sheffield, and so on. That is absolutely right. If you have a centralised place to buy in you draw the manufacturers from all over the country to London to buy their goods in London, with the result that the manufacturer either has to appoint an agent in London to attend to his business or he has to have a London office. That is bad, because London is not the centre of manufacturing, and it is also bad because all these people are brought to London, and here, again, we have the hotel problem. It is one of the causes of the hotel problem that so many people have to come to London to do business which previously was done in other places.
102 There is another matter on which I have asked several questions which have been answered by the Under-Secretary for Air, but which practically comes under the Ministry of Munitions, and that is, the use of cyprus wood in aeroplanes. Cyprus was used for aeroplanes against all the expert advice that has ever been given to the Government, and after a very short time it had to be stopped, because pilots had been killed. That cost the country £250,000 of money at least. It has been admitted, in answer to questions, that it cost the Government £250,000, and I think it cost a great deal more. Moreover, this use of cyprus took up, at a very critical time, a great deal of valuable tonnage which might have been used for other purposes. The official who made that blunder against all the advice that was given is still in the employ of the Ministry of Munitions. If this question is to be properly tackled, you must have real expert opinion, and not a professor. The official in question is a professor and not a timber expert. If you are to have proper expert advice on these questions you must have timber experts and other experts to advise you.
I think it was in 1915 that the then Minister of Munitions, the present Prime Minister, asked the Government to appoint what subsequently became the Central Control Board (Liquor Traffic). I want to ask the present Minister of Munitions if he is responsible for the working of that Central Control Board!
§ Question put, and agreed to.
§ Resolution to be reported To-morrow.
§ Committee to sit again To-morrow.