TREASURY AND SUBORDINATE DEPARTMENTS.

HC Deb 21 May 1936 vol 312 cc1393-436

Motion made, and Question proposed, That a sum, not exceeding £217,113 (including a Supplementary sum of £13,262), be granted to His Majesty, to complete the suns necessary to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for the Salaries and other Expenses in the Department of His Majesty's Treasury and Subordinate Departments, and the Salary of the Minister for Co-ordination of Defence." —[Note.—£145,000 has been voted on account.]

3.51 p.m.

The MINISTER for the COORDINATION of DEFENCE (Sir Thomas Inskip)

Rather more than two months ago, the Prime Minister submitted proposals for putting the national defences in order. Among those proposals was the appointment of a new Minister, with duties which were defined in the White Paper. Perhaps I might remind the Committee of some of the main headings of the duties which were to be entrusted to him. They were to include the supervision of the Committee of Imperial Defence organisation, the coordination of executive action and the progress reports of the various Service Departments, the discernment of matters requiring attention, and acting for the Prime Minister in the event of his inability to preside at meetings of the Committee of Imperial Defence. The new Minister was also to keep personally in touch with the Chiefs of Staff Sub-committee and to act as Chairman of the Principal Supply Officers Committee. Nine weeks ago I assumed my new office. I should like to thank hon. Members for the forbearance and, in many cases helpfulness, which they have shown. I gather that the close season is now over, and that I stand to be shot at. I cannot anticipate the topics that may be raised in various parts of the Committee, but it will probably be convenient if I try to give an account of my brief stewardship.

I begin by reminding the Committee that so far as the party below the Gangway are concerned, the right hon. Gentleman who, I understand, will follow me, admitted in the Debate on the White Paper, the dangers of the present situation. We begin, therefore, on common ground. I do not know whether the right hon. Gentleman will go further with me in agreeing that our dangers are increased and not diminished by the liabilities assumed in the interests of collective security. The peace system usually comes in for examination in the Debates, which have taken place with great frequency lately, upon foreign affairs, when our foreign policy is discussed almost in the abstract. Perhaps it will he helpful, in getting our ideas of foreign policy into relation with reality, to spend a day in considering questions of defence. I am sure that the Committee are agreed in thinking that Great Britain has a contribution, and, indeed, an outstanding contribution, to make to peace. The line of division between the Government and their supporters on the one hand, and hon. Gentlemen opposite, seems to fall between those who think that there is something ominous in preparation and those who are persuaded, as I am, that our plans for defence not only will not alarm a single nation in the world, but will actually foster the all-important sense of world security.

When I took up my new duties I found that considerable strides had already been made in the preliminary stages of repairing the deficiencies that had been observed. It is a mistake to think that the elaborate and efficient machinery of the Committee of Imperial Defence stood idle until the House had approved the White Paper. The Prime Minister described some of the results achieved, for instance, by the Supply Committee, who have engaged in very strenuous exertions under the chairmanship of Sir Arthur Robinson. I propose to speak later of this part of my duties. I want first to try to tell the Committee what I have attempted to do in connection with what I may call the primary functions of the three Services.

Let me say at once that I have not pulled up anything by the roots. I have not made a clean sweep. I have not even been ambitious enough to assume the mantle of a reformer. In these last few weeks I have rather been engaged in preparing for myself an agenda for taking the questions that seem ripe for consideration, and preparing the ground for any fuller or more searching investigation which examination of the first questions might prove to be necessary. The Committee are already acquainted with two of those preliminary investigations which the sub-committee of the Committee of Imperial Defence are making, into the question of the battleship and into certain questions connected with the Fleet Air Arm. Perhaps I may inform the Committee that I am intending to undertake, and indeed am undertaking, that preliminary inquiry myself. The subjects which are being considered are those concerning the provision of personnel, periods of service and reserves. It was my right hon. Friend the Member for Epping (Mr. Churchill) who called attention a little while ago to the question of the Fleet Air Arm. I am not covering the large field which he traversed, but I am undertaking the inquiry in the form in which I propose with the complete concurrence of both the Services concerned. I think I am not over-stating when I say that they have welcomed the method which I propose to pursue.

It is said that the scope of these two inquiries—if I may dwell for a moment upon them—is too narrow. It is very attractive to lay out a grand plan for a spectacular decision. That may come. I hope I shall not shrink from any decision, however important, which may be necessary if I am convinced that it is necessary; but my own inclination is to attempt to dispose, with questions of this sort, of the basic facts. My experience is that if you can settle matters in that way very Often the other parts of the inquiry fall easily into their proper places. I think I am right, in spite of whatever may be said as to the limited terms of reference of these inquiries, in the decision at which I have arrived. We are making progress in both cases. Tomorrow, in connection with the question of the battleship the sub-committee is proposing to hear the statements of well-known protagonists on this question of the battleship and aircraft—protagonists who have special technical knowledge of the questions that are involved. I have undertaken, or rather another investigation has been undertaken of a slightly different character. It is an investigation that interests hon. Members in all parts of the Committee, for I have been asked many questions about it both in the House and outside. It is a committee to consider the all-important question of food in war time, and every one will recognise that the moment you begin to speak of food you ate involved in questions of transport, of storage, of distribution and ultimately of production of home-grown supplies.

Mr. D. GRENFELL

And purchasing power.

Sir T. INSKIP

I was not attempting to give a complete list of the questions involved; I was merely intending to suggest some of them, to show over how wide a range the Committee must extend their deliberations. A wealth of detail has already been collected on these questions. A great deal of it has been put in order, and we are in a position, or hone to be in a position soon, when further details have been collected, to formulate the issue with a view to decision, and I think I may assure the Committee that in the terms of reference to the committee of inquiry all aspects of food supply in war will come under consideration. I am also happy to say that I have every reason to believe that every concern or firm that is interested in the storage of food in its various forms will co-operate with the committee in supplying information and devising proper plans, if an emergency should unhappily ever occur, and in those concerns and firms I include the Co-operative movement, as I see the right hon. Member for Hillsborough (Mr. Alexander) in the House.

There is one sub-committee which has been set up and which I mention for the purpose of informing hon. Members that Sir William Beveridge has been good enough, in spite of his other occupations, to assume the chairmanship. It is a subcommittee to make the necessary arrangements for the food supply of the civil population in time of war; and all those who remember the circumstances of the Great War will realise how competent a chairman Sir William Beveridge will be to give guidance upon this question. There are some other perhaps less prominent but none the less valuable or important issues affecting more than one department which have engaged my attention, and are likely to do so—the protection of our merchant shipping, the development of anti-aircraft defence and the passive measures for the defence of the civil population. That is a question which is particularly under the consideration of the Home Office, but naturally it will be my duty to keep in touch with the measures that are proposed from time to time.

Although these are all important inquiries—most important inquiries—I myself should be inclined, after my brief experience, to attach even greater importance to the contact I have made, and I hope I am not overstating it when I say I have happily made, with the Chiefs of Staff. I cannot but express to the Chiefs of Staff my gratitude for their readiness to confer with one whose walks have been so far outside their profession. I sometimes hear it said that there ought to be a joint General Staff, whatever that may mean. I cannot foresee what may be said, if anything, on that topic, but I would like to say that in my humble judgment responsibility divorced from control is nothing but a sham, and the Chiefs of Staff who meet in conference abandon not a jot or title of their individual responsibility or authority in the services to which they belong, but with the assistance of the joint planning committee, composed of the several directors of plans in the, three departments, they take notice of the world conditions and they frame the strategic conceptions which are necessary for a complete system of defence. The Committee may inquire what part I play in these deliberations, but, as I have said, it was and is one of my duties to preside at the meetings of the Chiefs of Staff sub-committee, and I am ambitious enough to think that I can help them, partly by my advice as to the foreign situation from time to time, partly by guiding their deliberations in useful directions, and partly by keeping the Cabinet in touch with their conclusions.

I do not propose this afternoon, whatever invitations may be addressed to me, to lift the veil of secrecy which necessarily and properly must cover the deliberations which take place. I cannot discuss, and I am sure the Committee would not wish me to discuss, the situations or the combinations with which we may be required to grapple in accordance with our commitments. I can only say that it is a responsibility of the Chiefs of Staff to consider and advise His Majesty's Government as to the use of the resources which Parliament places at their disposal. I think every one will agree with me when I say that the fact that we are required to be ready for collective action in circumstances which may be quite unforeseen, introduces a new factor in this generation into our defence system. The Italian clash may illustrate this proposition. I imagine that two years ago no one could have foreseen that our relations with so firm and old a friend would be disturbed as they have been. The dispositions that were made with so sure a touch and with such a remarkable anticipation of the course of events entitle, I think I may say, our Service advisers not only to our gratitude for what they have done in the past, but to our confidence for the future. There is only one thing that we have no right to ask the Service advisers to do, and that is to attempt to make bricks without straw.

There is one side of the work of the Committee of Imperial Defence which is of absorbing interest, but I am not going to pretend that I have been long enough in office to become more than generally acquainted with its duties. I refer to the question of scientific research, which is bound to play an increasing part in our defences in all three elements, sea, land and air, but I suppose chiefly in connection with the air. All I say and all I can say is that the services of very eminent scientists are being fully used in the development of our schemes of defence. It is my business to try to quicken the tempo and the application of the results of their research to actual instruments of defence, as well as to extend the range of their researches. This is not an occasion, for the reasons I have mentioned, upon which I can make any useful statement, and it may be that it will never be possible to make anything more than a very general statement, but if there is an opportunity when it is possible I will naturally give in fuller outline this part of the duties of the Committee of Imperial Defence.

I cannot pretend to survey the whole field of the Committee of Imperial Defence organisation. A great deal of it must necessarily be left unsaid, not, let the Committee understand, because it would be impossible for me to have narrated a great deal that would interest the Committee, but because, as I have said, of the necessarily confidential character of the deliberations and the conclusions reached. There is really no alternative before the Committee, so far as this aspect of my work is concerned, other than the two alternatives, either to trust or distrust the Ministers who, like myself, in the absence of the Prime Minister, from time to time preside over the Committee of Imperial Defence.

I pass to the other side of my duties, and here no reticence need be used and I can give to the Committee, I hope, any information that they desire. I shall attempt to anticipate some questions. which may be raised. The White Paper, already approved by the House, contains the broad plan proposed by the Government. It is a plan of which the first object is to repair the deficiencies in our defences due to the omissions of the last four or five or more years; and, secondly, to create a reserve source of supply available in case of emergency. I need not remind the Committee that if a storm should unhappily beat over our heads we are not very likely to have a long time in which to expand our production. It is vital to be prepared for an output capacity which may be switched on almost literally at 24 hours' notice, and even doubled or trebled, to meet the needs of a war on a modern scale.

I have referred earlier, in passing, to the work of the Supply Board and its committees, covering the whole range of necessary supplies, extending even to foodstuffs and medical stores, ships, gauges and various forms of armaments, all of which are engaging the attention of a sub-committee devoted to that particular question. It will be remembered by the Committee that it was not until 1932, six years after the creation of the Supply Board, that the so-called 10 years rule ceased to be the basis of our defence policy. The 10 years rule, of course, is the assumption that no major war need be envisaged for 10 years. But the activities that might have begun in 1932 began only in the summer of 1934, for reasons connected with the financial crisis of the preceding year and of that year. The effective preparation of the Supply Board machinery began and was doubled and redoubled from that time forth.

In the Debate on the Ministry of Defence (Creation) Bill my right hon. Friend the Member for West Birmingham (Sir A. Chamberlain) asked whether any survey of industrial forces had taken place and how this force could best be employed. I am not sure that my right hon. Friend received a definite answer to that inquiry at the time, but at any rate I am endeavouring to give him one now. The answer is that a detailed survey has been made of the material operative and technical resources of the country. They have been examined and tabulated. The Government have had the co-operation of men of very high standing and wide experience, and the result is that we are now ready to take the final step of giving experience of actual production of war material to firms that are at present engaged upon ordinary peace activities.

May I illustrate what has been done by reference to shells and shell components? I select this topic as an illustration because it is obvious to everyone that the production of this special industry falls, of necessity, far short of any war needs; indeed, the output of shells in peacetime may be described as almost negligible except for the current requirements of the Forces. The facts are that whole-time technical officers have been engaged in a personal inspection of suitable engineering firms to see whether they are adaptable to shell production, either by expansion or, in some cases, by balancing of existing plants. Four hundred firms of undoubted capacity and experience have received a detailed inspection, and the same process is continuing in the case of other firms. Five hundred of these other firms have recently received a preparatory examination, with a view to a more elaborate inspection as soon as it can be given.

Full process manuals have been prepared, and are now available, as to the manufacture of shell and shell components. They are ready, and they are kept up to date, and I think I may fairly claim that in this case, as I have mentioned in connection with all war material, we are in a position to enter upon the next and most important stage of putting into operation the plans for producing the material that is w anted. Firms have been classified and allotted to the different departments. Obviously something of that sort is desirable to avoid overlapping and the competition that might otherwise take place between the Services, and, in fact, an orderly plan has been made. It is true that, so far, it may be described as a paper plan, but it is an essential preliminary to the real work of production. All that plan is in being so far as the survey of industrial resources is concerned.

This brings me to consider a factor in the problem to which I have given, and shall be bound to give, a great deal of attention. In the same Debate to which I have already referred, my right hon. Friend the Member for West Birmingham asked if the tools and gauges are ready that will be needed. It is significant that the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) raised the same question. I say it is significant because, of course, the right hon. Gentleman has an outstanding and unrivalled experience of the production of munitions. Sir Eric Geddes had already, before the Royal Commission on Armaments in November of last year, elaborated the same matter. He pointed out with great force how indispensable to the production of shells, and, indeed, of different forms of armaments, gauges and machine tools are. There is no doubt that gauges and machine tools are the indispensable link—perhaps one may say the first link—in the chain of production. Their importance has been recognised for many years in the organisation of the Committee of Imperial Defence, and subcommittees have been engaged in considering what could be done. There was no money available for establishing a reserve, and the work of the committees was confined to investigating capacity to produce all these intricate and elaborate weapons and instruments, and research on the improvement of design. I am happy to say that the designs, at any rate, are now all in readiness for nearly all tools and gauges necessary for Service requirements. Here again process manuals have been drawn up, and they are proving invaluable to firms that will be engaging in shell manufacture, so at any rate one stage, and an important stage, of this difficult business has been completed.

The Committee will realise that there are many types of tools and gauges. They are made by a number of firms, though the number is limited. As to gauges, no difficulty arises about inspect- tion gauges; they are the subject of the attention of the National Physical Laboratory; but what are important are the ordinary gauges, which the contractors sometimes make for themselves, or which sometimes specialist firms make. I wish I had a store at my command. My task would have been a very much easier one if I could have entered upon my duties with such a store. But successive Governments have been responsible for decisions—or, shall I say, for the want of decisions—and there is no reason at all why I should attempt to hide from the Committee the fact that every Government in recent years must bear responsibility for this. I am going to take the Committee into full confidence in this matter. My task would have been very much easier if, having selected the firms for the construction of war material, I had had, when they asked me for the tools and gauges, a reserve of supply or a bulk order from which I could supply all their needs. But that is not possible, and it is no use crying over spilt milk. My task now is to plan the placing and timing of orders so as not to strain the industry that makes them, or cause an undue rise in prices.

I have met representatives of the industries, besides the consultations I have had with the officers of the Departments concerned, and I have the assurance of their help. I have a list of the numbers and types of tools and gauges that are estimated to be required, at any rate for Army purposes. Furnished, as I now am, with this information, I hope within a few days to have a meeting which has been arranged to discuss the actual allocation of the contracts for the full supply of these articles, and the steps which are necessary to hasten production. It may be necessary—and, indeed, I am very much attracted by this proposal, and am not sure whether I have not entertained it rather more strongly than some others—to place what I may call a bulk order, or orders in bulk, and make special arrangements whereby these orders shall be applied to the purposes of the Government, or Government contractors, and given priority over other engagements of the manufacturers. At any rate, I may assure the Committee that I have not overlooked the possibility that some such step as this will be necessary. But at the same time I want the. Committee to understand that, with re- gard to tools and gauges, there has been every indication from the firms who produce these articles that there will be co-operation with the Government in producing them at the lowest possible price in fairness to the firms themselves and to the Government, and at the earliest possible moment.

Mr. CHURCHILL

How long?

Sir T. INSKIP

So far as gauges are concerned, if I were able, as I hope to be within a very few days, to place orders for these gauges, I do not think there will be a production of a very substantial quantity under four to five months. The Committee will understand that the construction of gauges and the construction of machine tools go hand in hand; it is no good having the gauges without the machine tools, or the machine tools without the gauges. So far as machine tools are concerned, I am afraid that the process of getting them may even take a little longer than the time which I am informed will be required for the gauges. As I have told the Committee, this is a matter which has engaged a great deal of my attention. It is bound to cause me anxiety. These tool matters may be described as bottle-necks, and I do not know of any bottle-necks which are more necessary or perhaps more difficult to get through when people are as anxious as I am, and as the Committee are, to see this programme of deficiencies completed at the earliest possible moment.

Having reached this point, I think it will now be convenient that I should say something about an important suggestion which has been repeatedly made by my right hon. Friend the Member for Epping, that the Prime Minister should create a skeleton Ministry of Supply at once. Let the Committee examine that proposal for a moment, because anything that comes from my right hon. Friend on this question—he knows that I say this with sincerity—deserves notice and examination. I gather that he contemplates a Minister with far-reaching executive powers, probably backed by statutory enactments. His Minister of Supply—I am taking his words from passages in the OFFICIAL REPORET—would make articles for the Services, he would control the industries that are involved, be would secure deliveries which otherwise could not be obtained. In other words, he would be indistinguish- able from the Minister of Munitions as we knew him during the Great War. That is where the Government and my right hon. Friend part company, and I want the Committee to face up to the issue, because, as I have said, it is a question upon which the Government have made a decision. The Committee will remember that the Government stated, in paragraph 49 of the White Paper, that: What we have decided to do is to carry through in a limited period of time measures which will make exceptionally heavy demands upon certain branches of industry and upon certain classes of skilled labour, without impeding the course of normal trade. My right hon. Friend would take the gigantic stride which would put a great part of our industrial system on a war basis. I am not at the moment presenting the case against this suggestion; my right hon. Friend the Chancellor of the Exchequer dealt with it in a passage that most Members of the Committee will remember in the Debate on the Budget proposals on the 23rd April. My right hon. Friend the Member for Epping was naturally impressed with the example of thoroughness afforded by Germany. He invited us on that occasion to follow that example. His Majesty's Government up to now have taken a different view. It is conceivable that events might compel His Majesty's Government to arrive at a different decision, but the Committee may be sure that His Majesty's Government are not waiting for events to force this question upon their attention. Naturally, it must engage their attention from day to day, as my right hon. Friend the Chancellor of the Exchequer said. But even admitting, as of cow-se we do, that the Government carry a very heavy responsibility when they adhere to their decision not to interrupt the normal course of trade, there is no need for the Government to stand in a white sheet on this occasion. I do not think we can attain to the ideal of no interruption of normal trade, even in connection with the output of machine tools. I am informed—not as the result of any threat of compulsory powers by the Government—I have been informed by a gentleman in this branch of industry, who volunteered the statement, that it might be necessary for them, if the Government would give them an indication, to give a priority to Government orders, which, if they were to execute their orders in the ordinary course, the Government orders or the orders of the sub-contactors would not receive. Therefore, if you have people in industry who realise that the country's needs must come first and are prepared of their own volition to give them precedence, the normal course of trade will to some extent be interrupted.

Mr. CHURCHILL

In regard to the vital machine tools and gauges, is there now a Government priority on these things?

Sir T. INSKIP

The Government have no powers of compulsory priority.

Earl WINTERTON

Ah!

Sir T. INSKIP

I do not know what my Noble Friend means. I am stating the fact. Re may be of opinion—he will tell us later in the Debate—that the Government should take compulsory powers. That is a question well worth considering, but at the present time the Government have no powers of compelling priority for Government orders or for the orders of Government contractors. I only say that I am giving an indication of the willingness of the manufacturers in this branch of industry to do all that they can to secure practical priority for Government supplies.

Mr. A. V. ALEXANDER

Is it not a fact now that a great many industries are suffering from lack of ordinary raw materials—raw materials which to them are manufactured products, because of priority already being given to Government orders?

Sir T. INSKIP

I should not like to admit that that is the case. It may very well be that contractors for supplies are in fact giving Government orders their first consideration, but it would not be accurate to describe that as a priority for Government supplies. It is a question of the particular firm or undertaking ordering their business as they think right, and I have yet to learn that it would be wrong for an industry, even without the exercise of compulsory powers by the Government, to prefer the nation's needs even to the needs of a private customer.

May I now give to the Committee some information about the progress that has been made in connection with the Air Force? I want to give this illustration partly because it is the best illustration of the progress that has been made, but let the Committee not think I am putting it forward as an illustration to which the other cases should be compared. The expansion of the Air Ministry began first; it began as long ago as 1934, or, rather, the plan for the expansion then began. The Committee will remember that the plan that now holds the field provides for a threefold increase of the Royal Air Force as compared with what it was in 1934. To produce the aircraft, that is to say, the best possible aircraft that British design and skill can provide, to provide the fully trained personnel, and to back them with adequate reserves and equipment for industrial production is an immense task, and I think I may say that the whole country is immensely indebted to the energy and resource of my Noble Friend Lord Swinton, the Secretary of State for Air, and his Department. They have been able to make a, really remarkable achievement.

Recruitment, of course, must come in advance of the provision of the units. I am informed that 1,600 pilots have in fact been taken on in 12 months, and there has been an addition to the service flying training schools and the formation of a nucleus of additional civil flying schools. But what the Committee is interested in at the present moment is the provision of the aircraft for the use of this personnel, and I think that this case of the Air Force affords the Committee a very helpful illustration of the dual problem of getting material for expansion and for the repair of deficiencies and organising so that we can turn over at once, if war should unhappily come to emergency production on a large scale. Until the final stage which the Committee has approved for the expansion of the Air Force, it was thought that the existing aircraft industry would suffice for the national demands. The position of the orders given in these circumstances is not unsatisfactory. I mention that, because there were some warnings given as to the delays that might be expected. The progress of the orders that were given to the existing industry has not been at all unsatisfactory.

What we are really now concerned with is to produce the expansion in the in- dustry which is necessary to provide the greatly increased numbers of aircraft, to broaden the basis of production so that there may be an available source of supply in the event of war. Steps are being taken, as many hon. Members are aware, to enlist motor firms in this industry with a view to building up reserves of output. They will be asked—they have been asked—to build new premises or extensions at the Government expense. The remuneration which they will receive will take the form of a fee for management, on behalf of the Government, for production, and the premises will, of course, remain the property of the Government. They will be maintained on a care-and-maintenance basis for the purposes of the country, and they will be available for and capable of that swift expansion which I have mentioned more than once this afternoon. By these means we hope that reserve capacity, without any interference with normal trade, can be achieved in connection with the air industry.

I will not trouble the Committee with statements as to the progress that has been made by the Admiralty and the Army. I have referred to the stage which they have reached in connection with shell production, so far as the Admiralty is concerned, which is comparatively simpler than the others, but I can assure the Committee that, subject to this ever-pressing question of the machine tools, the programme for the Navy is not in an unsatisfactory position.

I must say something about prices. The Committee will remember that the Government made a promise that there should be nothing in the nature of profiteering, and that is a matter chat has engaged the attention of all concerned in the various Departments. Profiteering is meant to refer to that additional price which can be extracted because of the increase of demand over supply, and not as a compensation for increased costs, and the plan which the Government have aimed at, and tried to carry out in many of the cases, is to give a contract on the terms that the price will be fixed with reference to a careful costings examination, with an addition of profits not based, I would say, by way of percentage upon output, but profits that will be limited either by agreement or, in some cases, by arbitration. The Committee will realise that if you are to avoid swiftly rising prices as the result of the great demand which is being made upon industry, some such method as this must be adopted.

The prices that will be given, we hope, will provide a fair reward to industry. Let it be remembered that many of the firms and undertakings upon which we are now dependent have had to maintain themselves through very hard times, and it is not unreasonable that they should receive a fair reward under these circumstances when they are once more in the market. Reference has been made from time to time to extravagant rises in the price of shares in companies dealing with munitions. My right hon. Friend the Prime Minister has already told the House on more than one occasion that it is no part of the Government's duty to superintend activities and operations on the Stock Exchange—[An HON. MEMBER: "What are they doing now?"]—Not in this connection, but it would be a very queer business indeed the stock of which did not show some improvement in the prices of its shares on a prospect of firm orders after many years of low production. Although the Opposition may, and quite rightly will, probe these questions from time to time, examine them, and elicit the true facts, I shall not only not complain of it, but shall welcome it, and I repeat the assurance which the Prime Minister gave to the House some months ago, that the Government are determined to omit no efforts that will prevent the company—that is, the country—being bled in the hour of its necessity.

Mr. COCKS

You said "company."

Sir T. INSKIP

The hon. Member is aware that I am more human than he is and, therefore, apt to err. I turn now to another question that will interest hon. Members opposite, even more than the question of prices. The hon. Member for East Woolwich (Mr. Hicks), in the Debate to which I have referred, asked a number of questions as to what was going to he done with labour. Skilled labour is another question that causes great anxiety, and the hon. Gentleman said that it would be folly not to give consideration to the skilled labour now available in many parts of the country. I agree with him. One of our tasks is to search out the pockets of skilled labour—

Mr. KELLY

We know it.

Sir T. INSKIP

I never grudge hon. Members opposite opportunities for indulging in their humour, and that is undoubtedly another slip on my part, of which they have taken full advantage. I repeat, so that hon. Members opposite may, on second thoughts, understand what I have said, that the Government's duty is to search out the pockets of skilled labour which may be found in many places in the country. There are undoubtedly, here and there, in the places where large undertakings were formerly carried on, groups of men who have strayed into businesses and occupations which they do not prefer to their true avocation, and if by any means we can draw them back into industry, I believe we shall be serving the best interests of the men themselves, and furnishing the country with an invaluable supply of the skill which it needs at the present time.

I have been asked once or twice whether I have taken consultation with the trade unions or the Trades Union Council. I gave an answer to my right hon. Friend the Member for Epping yesterday—I did not give it to him, because he was not able to be present—which set out the position as I would put it before the Committee. The organisations of the different branches of industry are very well equipped to deal with industrial questions. To take the case of the Amalgamated Engineering Union, there is a proper organisation for discussing these questions with the employers, and I believe that discussions are now going on as to a rise in wage rates which has been under consideration for some little time.

Mr. KELLY

For a long time.

Sir T. INSKIP

For a long time. So, in connection with other industries. The point that I want to make is that I should have thought it was, and I still think it is, much more likely to be congenial to hon. Members opposite if the very skilled and experienced machinery that exists in the different branches of industry was left as far as possible to discuss and settle questions between the employers and the workpeople. I have no desire to ask for a blank cheque on behalf of the Government. I recognise to the full that if the Government should, unhappily, be faced with the alternative of diluting labour or some elaborate scheme of transfer of labour, of course, there would have to be consultation with the bodies that include all the various craft unions, but I believe the course that I have deliberately taken up to the present time of leaving industry on both sides to make its own arrangements is most conducive to peace in industry and to the avoidance of rise in prices. I do not grudge in the least a proper appreciation in an increase of wages of the employés. Indeed, what I have said about the firms applies equally to the men. The men have been, down on the bedrock of wages, and if it is proper that an increase should be given, the employers' and the mens' organisations are competent to settle such questions. Therefore, in spite of what the right hon. Member for Epping has indicated as being his opinion, more than once, I have decided, rightly or wrongly, to leave this industrial machinery to be worked as smoothly and as efficiently as I believe it can be by them.

The last thing that I have to say is a few words about the Special Areas. The Committee will remember that in connection with the White Paper a statement was made that special considerations would be given, other things being equal, to the Special Areas. I have kept in communication with the three Departments and I have an assurance as to the efforts that are being made in each Department to give their orders to the places where they will be most welcome. I will not trouble the Committee with the details, but I will go into them if necessary later in the Debate. There is no doubt that in this question of supply and the making up of deficiencies we are engaged as a nation upon a great enterprise. We are trying to achieve a successful result without undue disturbance of our trade, both home and foreign. Everybody will agree as to the importance of maintaining our foreign trade, so carefully and exhaustingly sought in the years of depression. We are trying in the short space of three or four years to overtake the accumulated deficiencies of many years. I am grateful for the indulgence of the Committee. I am increasingly aware that any success that may attend any help that I may give in this connection will be due to the efforts of others —to the men and perhaps the women who may possibly be brought into this ex- pansion programme, to the owners of industrial undertakings and the business men who are giving me their co-operation, and not least shall I owe a great deal to the help that I have already received by suggestion and kindly criticism from hon. and right hon. Members of this House. All that I can say is that if we can succeed in this great enterprise, if we can accomplish that to which we have set our hands, it will be a great achievement, and I believe that it can be done.

4.50 p.m.

Sir ARCHIBALD SINCLAIR

I beg to move, "That sub-head BB (Salary of Minister for Co-ordination of Defence) be reduced by £100."

Let me, in the first place, offer to the right hon. Gentleman my congratulations on the introduction of the first Estimates of the Ministry for the Co-ordination of Defence. This Ministry is in a special sense the creation of Parliament. Other Ministries have been brought into being under the pressure of events and on the initiative of Governments, but this new Ministry is the result of urgent demands from all quarters in both Houses of Parliament, from the Ministerial benches as well as the Socialist and Liberal benches, that the problems of defence should in future be considered as a whole, that there should be unity of doctrine in regard to all the problems of defence, naval, military, air, transport and supply; unity of plan and unity of direction, in place of the old system of Departmental autonomy and strife. For a long time this demand was strenuously resisted. We were told to trust to the Committee of Imperial Defence, but at last the Government yielded. How far they have yielded is yet to be fully disclosed, and certainly some of the passages of the right hon. Gentleman's speech were a little disquieting. To some extent, however, the Government have yielded to the pressure, and the result is the creation of the Ministry the first Estimates of which we are discussing today.

The first practical question that arises out of the right hon. Gentleman's speech is whether the Government have so designed the Ministry and equipped it with such powers as to enable it to carry out the intentions of Parliament. Has the Minister acquired the powers which Parliament desired him to possess? The right hon. Gentleman did not tell us much about his Ministry. What is his personal staff? Is he advised directly, as we hoped he would be, by officers drawn from the Imperial Defence College? What are his relations with the Chiefs of Staff Committee? Before I refer to what my right hon. Friend said on this last point, I would remind the Committee that when the Debate took place on the Government's White Paper on Defence I drew attention to a discrepancy between a statement in the White Paper, that the new Minister would not normally preside over the Chiefs of Staff Committee, and an announcement by the Secretary of State for Air in another place that the Minister would be the chairman of the Committee, not necessarily, he said, presiding over every meeting, but working to them the whole time. Lord Milne, who has had great experience as chief of the Imperial General Staff for many years, declared in a speech in another place that he attached immense importance to this point, and he added that the Minister should take the chair at all the meetings of the Chiefs of Staff Committee.

I had hoped that the Minister would be able to make it clear in the Debate to-day that he was firmly in the saddle as the regular and effective chairman of the Chiefs of Staff Committee, but, while he described himself quite clearly as the chairman of the Supply Committee, he only said that he was keeping in touch with the Chiefs of Staff Committee. "Keeping in touch" were the words that I took down, and occasionally presiding at their meetings. I had hoped that he would be in a much stronger position than that. His speech in introducing his Estimates to-day displayed all those qualities which we are accustomed to expect from him—coolness, poise, clarity of statement, and sure mastery of his subject, qualities which have earned him the confidence and respect of his colleagues in all parts of the House, but I looked in vain for convincing evidence that the right hon. Gentleman, possessed of such powers as have been assigned to him, was finding himself able to exert the pressure necessary to fuse the strategic doctrine of each of the three Services into one combined doctrine: one strategic whole.

The appointment of the right hon. Gentleman was one example of the process which we have begun to regard as characteristic of this Government's policy. He was appointed after the Government's plan had been framed and published. It was one of the instances of that process which the right hon. Member for Epping (Mr. Churchill) has described with so much picturesque elaboration as putting the cart before the horse. It was not clear from the right hon. Gentleman's speech this afternoon whether he has yet managed to transfer himself to a firmer and more convenient, if perhaps more conventional, position, between the shafts of the cart. He referred to some of the main issues of defence policy, but he left a great many without mention. He excused himself on account of the confidential character of the deliberations that are held and the conclusions that are reached, and said that this Committee had no alternative to trusting the Minister and the heads of the Defence Services. I hope that the Minister will unseal his lips in future, and perhaps before we have finished this Debate.

Those were not the terms in which Lord Haldane and the right hon. Member for. Epping, when they were at the head of the two great Defence Services before the War, were wont to address the House. I did not hear the speeches but I have read them, and they used to give the House clear indications of the principles upon which defence policy was based, the dangers that our Defence Forces were designed to meet and the nature of the organisations which the Government were putting up. I shall refer to some of those speeches again before I sit down.

In the meantime, I would press the Government for more information as to the dangers which they are asking this Committee and the country to face. Very few hon. Members will deny that the dangers exist. The right hon. Gentleman was right when he said, in the opening passages of his speech, that there is common ground there between hon. Members in all parts of the House. I start from that common ground. We are not blind, and we do not seek to blind others, to the disquieting features of the international situation. We have seen the fate of Abyssinia. We are beginning to sense vaguely the policy of the Italian dictatorship. We know the warlike doctrine it inculcates in its citizens and in its children, and we see the powerful and threatening strategical position which it has acquired—I would say partly through the weakness of the present Government—in the Near East. Looking further afield, there is the power and expansionist policy of the military party in Japan. Coming nearer home we see what the hon. Member for Barnard Castle (Mr. Dalton), in his powerful speech in the Debate on foreign affairs a fortnight ago, described as the rapid, remorseless and menacing process of rearmament in Germany. What are the true proportions of these dangers? In the absence of any clear statement from the Government it is only right and natural that private Members of the House and publicists outside, with sources of information far inferior to those at the disposal of the Government, should seek to make and publish estimates of their own.

The right hon. Gentleman the Member for Epping has been a, most active and most consistent investigator of German rearmament, and the fact that in one controversy of immense importance, that over the air strength of Germany, he was proved right and the Government was proved wrong has given great weight to any views that he expresses. In a Debate about four weeks ago he gave in considerable detail the grounds for his assertion that the German Government had spent, in the single year 1935, a sum of £800,000,000 on armaments. On the other hand, other careful and well informed observers derided those estimates of German rearmament. Professor Bone, for example, in an article in this month's "Nineteenth Century" analyses the statistics of German agricultural and industrial production in recent years and also the figures of retained imports of nickel, chrome and tungsten ores and the figures of the consumption in Germany of non-ferrous metals. He compares these figures with similar figures for this country and draws the deduction that the figures of the right hon. Gentleman are "grossly exaggerated and unworthy of credence." Here are two opposing views held by well-informed observers, each supported by pertinent and impressive statistics. The right hon. Gentleman has challenged the Government to deny the accuracy of his figures and has claimed that unless the Government is willing to deny their accuracy, unless it is willing to contradict them specifically and can show reasons why they are wrong, his statement might be allowed to stand and might be taken into the general currency of thought on this topic. The Government has ignored his challenge. Perhaps they reflected that even if the hon. Gentleman's figures are exaggerated, they would tend to mobilise public opinion in support of their policy—so why should they refute them? Yet surely it would be wiser for them to seek the solid support of fully instructed opinion rather than rely upon a public opinion which is merely vaguely alarmed. On the one hand, if Professor Bone's statistics or deductions are wrong, let the mistakes and the fallacies in them be authoritatively exposed. Do not let public opinion be lulled into a false sense of security. But if the right hon. Gentleman's figures are wrong, do not let a dangerous atmosphere of vague fear and menace be created.

Fear and suspicion, the gradual growth of the feeling that some other nation is an implacable enemy and that war is inevitable—these are among the root causes of war. These are the feelings which scaremongers in the sensational Press and the hirelings of the armaments interest are alert to exploit. "I know that the nation will not fail anyone who tells it the truth," said the Minister for Coordination of Defence last week. So let me urge them to respond to the challenge of the right hon. Gentleman the Member for Epping and tell us frankly and dispassionately the truth as they know it about German re-armament 'and the true proportions of the danger in Europe, in the Far East and the Near East, against which their defence plans are designed to protect us.

The next question that I want to put to the right hon. Gentleman is, What has happened to all the money, nearly £2,000,000,000, that we have spent on armaments since the War? Hon. and right hon. Gentlemen opposite are fond of warning us on this side against the loose employment of phrases like "collective security," and they are, of course, entitled to demand definitions of such phrases. So we are entitled to demand definitions of such phrases as "unilateral disarmament," "filling the gaps," "supply the deficiencies," from hon. and right hon. Gentlemen opposite who use them. In the last 10 years only there has been an expenditure of more than £1,000,000,000 on British armaments. That may be sufficient or it may be insufficient, but it cannot accurately be described as unilateral disarmament. In a recent Debate I was taken to task by the Chancellor of the Exchequer for the use of the word "squandered" in connection with this expenditure. It is a strong word, but I am prepared to defend its use.

What has happened to our money that has been spent in the last 10 years? In the first place, five-sixths of it has been spent on the old established Services, the Navy and the Army, and in spite of repeated warnings by back bench Members of all parties—it was on this question that I made my first speech in this House 13 years ago on the Report stage of the Air Estimates—only a sixth of this money has been spent on that Service which is now clearly shown to be the most vital of all three, the Air Service. About half of it, £550,000,000, has been spent upon the Navy, yet we were told in the Government's White Paper last year that the Navy in the condition in which it was in March of last year was unfit either to defend our vital interests or to cooperate in any system of collective security. This is in spite of the fact that the personnel of the Navy has declined by a third and its tonnage by a half and although, as the May Committee reported in. 1931, the Admiralty has, in addition to the money it has received from this House, been able to draw from year to year an old war stock to the extent of £1,000,000 to £1,500,000 a year. Yet we are told that this money was insufficient to provide the equipment and the reserves of war material necessary to maintain its efficiency.

In the Debate on the Navy Estimates this year I instituted a comparison between the naval expenditure and its results for the five years before the War and for the past five years. The Noble Lord who was in charge of the Navy Estimates gave me a very courteous but by no means convincing reply. My criticism and the Noble Lord's reply are on record in the OFFICIAL REPORT and I do not want to weary the Committee by reviving the controversy on the same lines, but his figures suggest a fresh comparison. He declared that the provision proposed this year for effective services only, a sum of £60,000,000, was equivalent at pre-War rates and prices to a provision of £40,000,000. In other words, he deducted a third, and for the purposes of my argument this afternoon I am prepared to accept that proportion. Add to that £60,000,000 the amount of the Supplementary Estimate which has now been presented and we reach a total of over £70,000,000 on effective services for the Navy in the present year. Deduct a third and we have a figure of £47,000,000, or just £1,000,000 less than the Estimate for effective naval services for the year 1914–15. Yet in that year we had 68 capital ships and 14 building, as against 15 capital ships now and two building, the construction of which is to be begun at the very end of the financial year. We had then 110 cruisers and 17 building as against 54 and 17 building this year. Our tonnage is only half what it was then and the Navy then was complete in its personnel, its war material and its necessary reserves. So it is not true that we have been disarming during the last 10 years. We have been spending vast sums on our defence forces and we have not been getting value for it, and it seems clear that the case for an inquiry into the expenditure on the defence services is overwhelming. I pressed for it before and I was glad that the right hon. Member for Hillsborough (Mr. Alexander) was pressing for it at Question Time yesterday. I again urge the Government to grant this inquiry.

So much for our past expenditure. Now as to the future. In the last week before the General Election the Prime Minister said: Where democracy is up against the truth it can form its own judgment, and I have never known the British democracy, where it is up against the truth, give a wrong judgment."—[OFFICIAL REPORT, 23rd October, 1935; col. 152, Vol. 305.] A few days later he told a great public meeting at the Guildhall what he, no doubt, then believed was the truth of the armament situation. He said: Do not fear or misunderstand the Government when the Government say they are looking to our defences. I give you my word that there will be no great armaments. Yet in opening the Budget the Chancellor of the Exchequer declared that he was contemplating the possibility that armament expenditure, after rising to a peak, would sink to a permanent level which in all likelihood would substantially exceed the £158,000,000 provided for in the original Estimates of this year, a prospect which moved the right hon. Gentleman the Member for Epping to declare that such a level would be so intolerably high that there would have to be either a melting of hearts and a joining of hands or an explosion and a catastrophe the course of which no imagination could measure. We have travelled a long way since the Prime Minister gave his word to the electors at the Guildhall during the General Election that there would be no great armaments. The new plans are obviously on a scale far greater than was indicated to the electors at the General Election and we ought to be told now what that scale is and what the cost will be. Either by the procedure of a Select Committee or in some other way this House ought to obtain full information of the Government's plans and scrutinise searchingly the expenditure on defence. The Government have rightly claimed that they must be free to expand or contract their programme as the situation deteriorates or improves. We are not seeking to tie them to a particular figure, and we hope the figure that they give will prove to be one which they need never reach. The Chancellor of the Exchequer said only last night: We have staked out a programme. And again: We have a definite programme in front of us. Let us, at any rate, know what will be the cost of completing that programme for which the Estimates are before the House this year.

We ought also to be told what will be the role assigned to each Service in the Government's plans, and by what standards the requirements of these Services will be measured. As I was saying just now, before the War, this was the kind of information which was given to the House of Commons by Lord Haldane, who was then Secretary of State for War, and by the right hon. Gentleman the Member for Epping (Mr. Churchill), who was then First Lord of the Admiralty.

They made clear statements of the principles upon which our Defence system was based and the standards of strength accepted for each Service and the role assigned to the Navy and the Army respectively. For example, the right hon. Gentleman the Member for Epping in March, 1912, precisely stated that "the actual standard of new construction which the Admiralty has in fact followed during recent years has been to develop a 60 per cent, superiority over the German Navy on the basis of the existing Fleet lay"; and he proceeded to explain in detail, through each category of ships, the application of that standard. The right hon. Gentleman says that he cannot lift the veil of secrecy which covers the dangers with which we are faced.

Sir T. INSKIP

No, I did not say that. I said that I could not lift the veil of secrecy which covered the deliberations. I said nothing about covering the dangers.

Sir A. SINCLAIR

I certainly understood the right hon. Gentleman to say that. I hope that if that is so, he will give us the information for which I am asking and a clear statement on the principles of action upon which he is proceeding to meet those dangers. He said that we must not ask him and the Defence Department to make bricks without straw. No, but if we are providing the straw, we are entitled to see the plans of the houses which our bricks are going to be used to build.

The nearest approach to any such exposition which the Government have so far vouchsafed us is in regard to the Air Force. There the Government's formula, announced by the Prime Minister about 18 months ago, was parity with any Power within striking distance of our shores. I have criticised that formula but it was better than nothing. It at any rate gave us some indication of what the Government thought and a yardstick by which to measure their achievements. The right hon. Gentleman has told us a little more about their achievements. He said that they had 1,600 new pilots and that they had motor firms now building premises in order to expand rapidly, making a reserve capacity for expansion in time of emergency. I would ask further, whether the Government have yet attained that standard of parity which they said was to be the standard to which the Air Force was to be brought, and, if not, when do they expect to attain it?

So in regard to the Navy, we ought to have a clear statement of policy like that which the right hon. Gentleman the Member for Epping gave to the House before the War. The only definite standard of which we have been told is parity with the United States of America; yet it is generally agreed that it does not in the least matter to us or to any of the other peace-loving nations of the world how big the United States Navy really is. The larger their fleet the more secure the British people and the other peace-loving nations of the world will feel. So that for practical purposes the formula of parity with the United States of America is meaningless. What then is our present standard of naval strength?

And here let me say a few words on two points affecting the Navy. We on these benches have backed the Government in the measures which they have taken to put the Fleet into a state of full preparedness and efficiency to carry out the policy of the League of Nations in the Mediterranean, and also in their proposals to strengthen the Navy—with one exception. We have refused to be committed to the construction of battleships before the inquiry, to which the Minister referred in his speech this afternoon, has been completed. The case against the construction of battleships argued by the right hon. Gentleman the Member for Epping, my right hon. Friend the Member for North Cornwall (Sir F. Acland) and the hon. and gallant Gentleman the Member for Hertford (Sir M. Sueter) has not been answered, and is, in my belief, unanswerable; but this afternoon I want to confine myself to a comparatively narrow point. Speaking in the Debate on the Supplementary Naval Estimates, the Minister for toe Co-ordination of Defence read out the terms of reference to this committee of inquiry. He said they were as follows: To consider the experiments that have taken place or are proposed in connection with the defence against aircraft, and the vulnerability from the air of capital ships." —[OFFICIAL REPORT, 4th May, 1936; col. 1413, Vol. 311.] That is not the inquiry which was promised us by the Noble Lord who was. in charge of the Naval Estimates when we were discussing these Estimates. The undertaking which he gave was in these words: I really want people to feel confident about battleships, to feel that they are necessary. I do not want people to go about feeling that their money has been wasted on battleships when it ought to be used for something else. We are perfectly prepared to take any steps to make people perfectly convinced that the policy of the Government is right.… We have got our case ready and we would really like the opportunity of the critics of battleships coining out in the open… Their views must be based on definite experience, and I hope that they will be open to cross questioning by the naval authorities in the same way as the naval authorities have been cross-questioned by the opponents of battleships. Therefore, while I feel perfectly clear that my right hon. Friend will not expect me to pledge myself to the exact method of inquiry to be adopted, I can assure him that every step will be taken to ensure that all these points can be thrashed out as to the merit or otherwise of our battleship replacement programme."—[OFFICIAL REPORT, 16th March, 1936; cols. 117–8, Vol. 310.] That is a very different undertaking. That undertaking has not been fulfilled by the terms of reference which the Minister has given to this House. Why has there been this effort to narrow the scope of the inquiry? Will the Minister for the Co-ordination of Defence or whoever speaks at the end of this Debate on his behalf, give us a pledge—and I put this to the Minister quite definitely—that the scope of the inquiry will be as described by the Noble Lord who was in charge of the Naval Estimates, and that the inquiry will be carried out as he indicated to the House.

The other point I want to mention in connection with the Navy is this: The lesson of the last War was that the tendency had been to concentrate too much attention upon the big ship to the exclusion of the vital importance of smaller craft. No one is likely to forget the importance of the part played by the fishing fleet in the last War. Lord Balfour said that they were "the shield and buckler of the Allied cause," and Lord Jellicoe said," The Navy saved Britain, but the fishermen saved the Navy. "Now the fishing industry is threatened with collapse. There is more unemployment in the fishing towns and villages on the North East coast of Scotland than in any other part of the country.—[An HON. MEMBER: "And in Grimsby."] An hon. Member behind me says "And in Grimsby." An invaluable reservoir of naval recruitment is drying up at the source and the boats which were the Navy's shield in the last War are now being laid up. There is urgent need on the ground of naval defence for the Government to come to the rescue of this hard-pressed industry. I hope that the Minister will give us an assurance that he will consider favourably the proposals which have been made to him that those fishermen who are ready to hold themselves and their boats at the disposal of the Government in the event of war should receive a retaining fee, and that the Government will press actively on with other measures for the salvation of the fishing industry, whose welfare should be the special pre-occupation of the Admiralty.

There remains the Army. In the Debate on the White Paper in March, I asked what role was to be assigned to the Army in the Government's scheme of defence. I asked whether it was to be equipped for participation in land warfare on the Continent of Europe, or was it to be recognised that our contribution to pooled security could best be made at sea and in the air, where we share common risks with our fellow members of the League, and where our help could be made most promptly available. The Home Secretary, who replied for the Government, said: The right hon. Gentleman asked whether… the Army would be called upon to go abroad, but that is not a question to which anybody could give an answer here and now. Our duty in that respect at present is to see that we have a force which is capable, in case of need, of going abroad and that is not of course limited to one particular expedition abroad but applies to emergencies which may arise in any part of the world. I then pressed the point as to whether he meant that the Army would be organised to take part in a Continental war, or whether it would be merely an expeditionary force available to go to other parts of the world and organised more or less on its present basis, to which he replied: I am sure the right hon. Gentleman himself will be the first to see that, while it. is quite right that we should seek to define generally the purpose of the Army, it is impossible for any man, in advance, to determine the method by which the Army shall be used."—[OFFICIAL REPORT, 10th March, 1936; cols. 1996–7, Vol. 309.] That is not the reply which the House of Commons received from Lord Haldane before the War. It is meaningless, as my hon. Friend above the Gangway says. Before the War the House of Commons was told precisely the principles on which the Army was to be organised and what its role was to be, the organisation of the Expeditionary Force, with its 160,000 men and six divisions, and of the Territorial Force, and how its strength had been calculated, and exactly what role had been assigned to it in our scheme of Imperial defence. I believe that this is the crucial issue. To organise a mechanised expeditionary force capable of taking part in Continental warfare would involve colossal expenditure, and although the Prime Minister has pledged the Government against the adoption of conscription, I find it impossible to believe that such an army could be raised and kept in the field without conscription. Already it is being suggested that unless the flow of recruits is increased, we may have to resort to conscription. For my part, I should regard the acceptance of conscription as the defeat of those ideals of peace and freedom which I am prepared to support the Government in defending against military aggression from abroad, but which I am equally resolved to defend against the militarists at home. An army organised for Continental warfare would be on a basis wholly different from that required for garrison duty throughout the Empire, or for Colonial service or for service in India. Again I ask the Minister for the Co-ordination of Defence, which basis do the Government intend to adopt?

If we look at the problem from the standpoint adopted in the Government White Paper of collective security under the League of Nations, surely it is clear that the States members of the League possess an overwhelming superiority over those outside the League in military strength on land? I would ask the Committee to take the worst assumption, and one which would be quite unwarrantable, except for the purpose of weighting the scales to the utmost against my own argument. Count in not only Italy, but also Austria, Hungary, Bulgaria on the side of Germany and Japan in a great struggle against the League. They would have 1,400,000 men in the first line to the 2,500,000 men of the six chief League Powers, France, Belgium, Poland, Rumania, Russia and Jugoslavia, and 6,000 aeroplanes to the 6,350 of the League Powers. It is in the air and not on the land that our contribution to collective security would be most required, and because we share to the full the risks in the air of our fellow members of the League on account of the exposure of our great centres of population, our communications and our centres of industry, to air attack, it is in the air as well as on the sea that we ought to make our contribution, to collective security. If the Government share those views let them say so, but, if not, let us at least know what their conception is of the role of the British Army. For my part I suggest that its contribution to collective security should be made in continents where its present organisation is better adapted to the requirements of war than that of mechanised armies organised on the Continental scale; and that the Territorial Force should once more be constituted on the basis of service for home defence only, so that it could revert to its original role of being responsible for the defence of these shores in the absence of the regular Army.

I will leave other hon. Members to deal with other vital aspects of the defence problem—industrial organisation, supply, and the measures to be taken in the event of air attack on London and on our docks and communications by sea, and also with the vital question of our food supplies. I will only say this on the question of industrial organisation and supplies, that I was astonished to hear the right hon. Gentleman reveal how little has been done to prepare in, such ways as by the provision of precision tools and gauges. He said that successive Governments have neglected these issues. I remember a speech of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) about three years ago bringing to the attention of this Government the vital importance of these issues, and yet it would appear from the speech of the right hon. Gentleman to-day that no attention was paid to the speech of the right hoe. Member for Caernarvon Boroughs and that nothing in fact was done. The right hon. Gentleman referred to the difficulty of getting these supplies of tools and gauges, and he dealt with the suggestion that there should be a Minister of Supply with greater powers of obtaining these necessary articles. It is notorious that it is getting increasingly difficult for private industry to get delivery of these tools and gauges, and that private industry is being hampered in this way. I am told that deliveries can be obtained for certain gauges and tools more rapidly from Germany, in spite of the rearmament which is going on there, and from America; and I suggest that the right hon. Gentleman should consider lowering the tariffs against the importation of these tools and gauges which are required by industry and by the Government for the purposes of defence.

Finally, I want to ask for information on two important aspects of the external co-ordination of defence. What measures are being taken to bring about an effective co-ordination of defence so far as the different countries of the Empire are concerned? The right hon. Gentleman did not refer to this in the course of his speech. In the Navy Debate I pointed out that there was small sign of effective co-operation between Imperial Governments in matters of defence. Are the Dominion Governments being fully consulted? Have they shared in the preparation of the Government's defence plans? Are they prepared to co-operate, and, if so, will the right hon. Gentleman tell us what their part is going to be?

I return to the Government's White Paper, and its reference to collective security. What measures are being taken to create collective security? It is not hon. Members on this side who are to be blamed for misusing collective security as a catch phrase. It is used in the Government's White Paper. We want to know what the Government are doing to make it a reality. Unfortunately, while the Government's White Paper contains these vague references to collective security, it cites recent increases in the armaments of other members of the League, like France, Belgium and Russia, along with those of Germany and Japan, as necessitating increases in British armaments. If collective security means anything real to the Government, the armaments of loyal members of the League should be regarded as complementary to and not competitive with our own. We have supported, and shall continue to support, the Government in any increase of armaments the case for which we think is clearly proved, but the piling up of these great armaments gives us no sense of security. Real security lies only in removing the causes of war and particularly the economic causes, which destroy overseas trade, block migration and create unemployment, impoverishment and discontent all over the world. The best form of national defence would be a tenacious and consistent pursuit of a foreign and economic policy in accordance with the Liberal traditions of this country, and in firm loyalty to the ideals of the League of Nations.

5.38 p.m.

Mr. ATTLEE

We have awaited with interest the first speech of the right hon. Gentleman in his position as Minister for the Co-ordination of Defence and to hear him give an account of his stewardship. Frankly I cannot say that I have been disappointed in his speech, because I never expected very much. Not because the right hon. Gentleman is the right hon. Gentleman, but because we have not been put in a position to expect very much. I was struck by a phrase he used, which seemed to me to be exactly applicable to his own position—" responsibility divorced from authority is a sham." It is responsibility without authority that has been given to the right hon. Gentleman, and the plans of the Government for the coordination of defence are, in fact, a sham. The right hon. Gentleman gave us a gloomy speech, a speech in which he appeared to envisage some catastrophe three or four years ahead. I notice, constantly reiterated in the speeches of Ministers, this period of three or four years ahead. They say that "we have three or four years to do it in." I do not know what they are anticipating at the end of that time. I do not believe that anybody anticipates that if we continue arming vigorously for three or four years we shall then suddenly have a heavy fall in expenditure. The Chancellor of the Exchequer did suggest something of that kind, but the speeches of nearly every Minister suggests that after three or four years we shall have the deluge—another war.

What I found lacking in the speech of the right hon. Gentleman is what I have found lacking in every speech I hear from Members of the Government on the subject of defence, and that is a total lack of unity of strategic outlook. What we get is a number of statements, a number of plans, put forward by the three Ministers but all totally uncoordinated. The right hon. Gentleman's speech this afternoon started with a fallacy. He talked all the time of these proposals as making up deficiencies. The assumption is that all the time there is an ideal present in the mind of somebody for the defence of this country properly co-ordinated between the three arms, but that owing to a variety of causes that ideal has never been reached; that now they are going to make up deficiencies and that when they have done that we shall have a co-ordinated structure of defence. That is entirely untrue. There is every indication that the Government have no co-ordinated plan of defence and the right hon. Member for Caithness (Sir A. Sinclair) was perfectly right in saying that it is a ridiculous thing for Ministers to come here with a bush-hush policy, saying, "Trust us, but do not inquire too far." The picture I get of the Government is of a Government which is as incoherent in its defence plans as it is in its foreign policy, and all that it is doing at the present tine is to increase armaments in a panic. What, in fact, it is doing is merely to multiply anachronisms.

We are being asked to pay huge sums of money for security and safety, but we never get the slightest suggestion as to how safety is to be attained. We have never had a clear statement on this issue, because we have never had a statement on defence as a whole. The first question I should like to ask is this: Are there really any co-ordinated plans at all for defence? The right hon. Gentleman rather suggested that there were. He told us that when the critical situation arose in the Mediterranean, owing to the imposition of sanctions, there was wonderful co-operation between the Services, everything was done all right. I am very glad to hear it, but if that was so we can take it that it was not any fear of Italy which prevented the Government from carrying out the policy to which it had set its hand, of imposing really effective sanctions on Italy. We gather that there was no question of running away, no question of fear, everything had been foreseen, and that there were co-ordinated plans for the Navy, Air Force and Army, so that in case anything should happen they were already to go to the Mediterranean—nothing improvised, they knew exactly what they were doing.

It is gratifying, but I am bound to say it is the first time we have heard it. It points to the question, why the Government did not carry out the policy they laid down, and which did so much to win them the last General Election. Our contention has always been that we cannot trust the Government's foreign policy. When they ask for armaments we cannot trust them with the use of these armaments, or in the efficiency of the armaments. I have not the slightest desire to turn the Debate into a foreign affairs debate, as we have to deal mainly with the question as to whether the defence plans are being properly coordinated.

I should like to ask the right hon. Gentleman whether he will be in a position at the end of this Debate to give some outline of the position of this country relative to the system of collective security. I was struck by one remark which he made in that connection. He said that we have various responsibilities and that we have an increased liability from collective security. What did he mean by that? Did he mean that if we were to adopt the policy of Lord Beaverbrook we should then have far greater security and a far smaller liability, and be able to reduce our armaments? Do I understand that it is owing to the responsibilities of collective security that we are so afraid of Signor Mussolini? Is it the responsibilities of collective security that make us hand over one sea after another to some particular dictator? That seems to me to be a rather curious conception. I could understand it coming from some hon. Members who sit on the benches below the Gangway, but it strikes me as rather curious coming from the Minister who is to co-ordinate the Defences of a Government which is pledged to collective security and which has based its armaments policy on collective security.

Surely if collective security means anything, it means that with any increased liability there must also he increased security for us. I would like the right hon. Gentleman when he replies to tell us what steps have been taken to make collective security a reality. We have heard of conversations between particular Powers. Are there any conversations to make collective security a reality? We are told that collective security is merely a phrase, and we have been attacked on that basis; but it is a phrase which the Government put up and have always put up. They are protagonists of collective security, and we want to know whether it really means anything effective. I would like now to ask that we should be given a little more information.

I am sure, as the right hon. Gentleman the Member for Caithness said, that in a Debate of this sort we should have had a far clearer exposition in pre-war days. I am sure we should have had a clearer conception of what would be the role of the Army, the Navy or the Air Force in any particular contingencies that might arise. I should like to have a good deal more information, particularly with regard to the Navy. We have had speeches from the present First Lord of the Admiralty which are really mere echoes of a kind of pre-war reverence for the quarterdeck, a saluting of the spirit of the mast, and after carefully reading those speeches again, I do not know what the First Lord of the Admiralty really considers the position of the Navy to be. I have also looked at the speeches made in pre-war days by the right hon. Gentleman the Member for Epping (Mr. Churchill) when he was First Lord of the Admiralty, and I know exactly what was meant, what was conceived and what he thought of the British Navy in a world which was at that time very largely a world of two-dimensional war. I do not get any conception at all from the spokesmen of the Admiralty as to what they conceive to be the role of the Fleet under conditions of three-dimensional war. I would like to ask whether at the present time the bases of our Fleet are considered in the same way as in pre-war days. Do we still consider Malta and Gibraltar as secure resting-places for our Fleet, or are they isolated spots very open to air attack in modern warfare? I understand that the Fleet did not stay long at Malta during the summer when it was threatened. If those particular bases are open to danger, I want to know when the Admiralty found it out. It has been rightly pointed out that during all these years we have been spending a great many millions of pounds on our Forces. We want to know whether these inherited systems of security have been revised in the light of modern conditions.

That brings me to the next point, and here also I would like to have some explanations. It seems to me that we are trying to re-create a 1914 Fleet for the conditions of 1936, exactly as we have very largely a 1914 Territorial Army for which the Secretary of State for War has been actively recruiting. I want to know exactly where 1914 comes in, in 1936. We spend £1,000,000 a year on cavalry, and I want to know what part cavalry has in the Defence Forces in modern warfare. I think we all want to know a great deal more about the role of the battleship. What protection will it give to this country? After all, we are considering not the Estimates of one year or the Estimates even of the right hon. Gentleman's salary to-day, but an enormous programme which is to go on for three or four years. The battleship programme is not one that can be finished in a short time. It will commit us to enormous expenditure. We know—and it is the profession of the Government—that the matter is still one on which there is to be discussion, and it seems astounding that in all these years the matter has not been carried much further than it has. When I am told that I must trust the expert, I say that everything I read leads me to mistrust the expert. I do not think there is anything quite so painful as reading the accounts of great experts of war afterwards. I am afraid that all the speeches of the Secretary of State for War for the purchase of recruiting for the modern Army will not counter his story of the late Lord Haig and the whole story of the War as it comes out now. Therefore, although I do not profess to be an expert, I am not prepared to bow down and say, "Because the Lords of the Admiralty say this, let everybody else be dumb." The right hon. Gentleman rather gave us that impression. There was a kind of hush-hush over his speech—trust the Ministers. Frankly, I do not trust them.

We have asked again and again what is the position in regard to the Air Force, and once more we have had no clear doctrine laid down. I would ask particularly what is the Government's atti- tude towards the efforts that I understand are again being made—I do not know how many times they have been made already—to hand over part of the Air Force to the Navy. That attack comes up regularly. It is one of those forms of warfare rather like the warfare on the North-West Frontier. We know that the warfare at the back of the lines between Ministers is always one of the great features of modern warfare. Occasionally, there may be peace between them, but this war between the Departments of these two Services is always apt to break out. Frankly I think that the carving up of the Air Force would not add to its efficiency, and to my mind if there is to be any carving up and handing over, the Navy should be handed over to the Air Force and not the Air Force to the Navy, because the Air Force is the dominant Force today. H one considers the dangers of any war at all, the vital spot is this country and the vital danger comes from the air.

I was not at all satisfied by what the right hon. Gentleman said with regard to the safety of this country. It is very satisfactory to know that there are committees working, but he did not give us a great deal of technical detail, and, after all, that is not his province; but I do not think anyone is satisfied that there is a really vigorous effort being made to protect this country or, indeed, that there is real co-ordination between the Departments on protection. I must say that one rather curious point which struck me about the right hon. Gentleman's speech was that throughout his remarks his Ministerial colleagues were never once referred to. Is the co-ordination not a high-level bridge, but a bridge somewhere half-way down, because there was no reference in the right hon. Gentleman's speech to the First Lord of the Admiralty or the Secretary of State for War? The nearest approach to co-ordination seemed to be when the right hon. Gentleman referred to the Chiefs of Staff Committee, I must confess that I am disturbed by that attitude.

Sir T. INSKIP

The right hon. Gentleman is inaccurate in saying that I made no reference to the right hon. Gentlemen. I paid a tribute to Lord Swinton and mentioned him specifically by name.

Mr. ATTLEE

I quite agree that the right hon. Gentleman paid tribute to Lord Swinton, but that was in a different part of his speech. So far as the part of his speech dealing with his co-ordination activities is concerned, my statement is correct, although I am willing to admit that it was merely an oversight. I quite agree with the right hon. Gentleman the Member for Caithness when he said, with regard to the role of the Army, that we have to get an army that is suitable for one purpose. I believe it is impossible to get an army that is suitable for four totally different purposes and for which it has to be totally differently equipped. The impression the right hon. Gentleman the Secretary of State for War gave me was that he is trying to get an all-weather Army which will be useful in no particular weather, an Army that is to be neither suitable for modern Continental mechanised warfare nor suitable for 1914. The Territorial Army remains in 1914, parts of the Army have got as far as 1936 and others are halting at various stages on the road.

I was not any more satisfied with the right hon. Gentlemen's treatment of the question of the prevention of profiteering. He left out one important thing, in that he did not tell us what was the Government's idea of a fair rate of profit. We are having built up tremendous vested interests in armaments. Until you have some real check on profiteering you will not disabuse the minds of the people of this country of a very well-justified suspicion concerning those who operate in private armaments. I have one reference to make to the inquiry into the private manufacture of armaments, in order to call attention to what I regard as a very serious error on the part of the Government. Ministers are responsible for policy. It is their duty to take the blame for anything that goes wrong in that Department and they ought not to put forward a civil servant to make statements of policy.

Before the Armaments Inquiry we had a. very distinguished civil servant, Sir Maurice Hankey, who, in the course of his evidence, gave replies which were not matters of evidence but matters of opinion. To put him in that position and still more to ask him to give statements on such matters is, I think, entirely wrong. It is unfair to a civil servant, a soldier or a sailor that he should be put in that position. He may very well give technical evidence but if asked his opinion on a matter of acute political controversy, he ought to be instructed to say, "That is a matter on which I cannot reply." As a matter of fact, Sir Maurice Hankey actually stated that he appeared as an advocate against the side that was putting forward the case against the private manufacture of arms. The chairman of the inquiry asked: It is réally a speech of counsel in reply?—A. That is right. It is not any longer evidence, your second statement, it is a criticism of the case made against private manufacture?—A. Yes. I suggest that that is entirely wrong. If they wanted to put in an advocate they had the Law Officers of the Crown who are trained advocates, and it is not right, as I say, to put a civil servant in the position of giving his judgment as Sir Maurice Hankey did on such a matter as that of the peace ballot. That is not his job and he is no better able than anybody else to give a judgment on that matter. He prejudged the whole issue on which the committee was to decide. What is the result of that? The public learns that a man in a key position has expressed very strong views on a matter which excites acute public controversy. What is the position of such a man in the event of a change in Government? It is a tradition in this country that civil servants and soldiers and sailors loyally serve any Government which is in office. I do not for a moment suggest that Sir Maurice Hankey would do anything different, but he has been put in such a position that people in the country can say, "You see they have a man there with certain views and certain prejudices." I think the Government in that respect have done a grave disservice to a great public servant by putting him in an entirely false position.

There are some other matters to which I wish to allude. I wonder where the right hon. Gentleman is going for his information. I hope he is making his inquiries very wide and that he intends to see a great deal of the younger members of the services in his investigations. There is a tendency in some Government offices to think that a Minister must confine himself to a narrow range of high civil servants or of generals or admirals, and that he must not seek information everywhere. I regard that as a completely wrong view. In the right hon. Gentleman's position it is, I suggest, his duty to make himself acquainted with the best thought in all three services and not only that of the older men. I take it that one of his instructions, at least, is that he should look round to see what is going wrong, and I submit as a broad general principle that, in anything dealing with the fighting services, it is always worth while to find out what the younger men are thinking, because the older men are generally out of date. That is particularly so where there are three separate services and where one service is much younger than the others. There is an enormous weight of prestige and society influence on the side of the older services. I hold no brief for one service against the others. I want to see real co-ordination between them, but it is idle to deny that there is a heavy weight of vested interests in the older services and the older forms of warfare.

I must say that I had hoped that today we should get something like a wide appreciation of the situation from the right hon. Gentleman. What we got was far too much a mere continuation of what is expressed in the phrase "filling up deficiencies." The Government are not filling up deficiencies. They are entering upon a very heavy armaments programme. One can date the change from the second year of the National Government and it has gone on, concurrently with the deterioration in foreign affairs. We on this side are not persuaded that the defence policy of the Government is a reality. We are sure that the right hon. Gentleman is working hard and doing his best, but we do not believe that he has been put in a position of real authority. I am convinced that what is required is a thorough overhaul of all the services and of the relations of those services to one another. The answer doubtless will be that we cannot have that overhaul because we are engaged in a great building-up process to meet an emergency. But what will be the good, if at the end of four years, you have simply piled up an immense mass of waste?

We believe that your defence policy must depend on your foreign policy. We have not heard a word of the co-ordination of our defence plans with the Dominions and the other parts of the British Empire. We have not had a word of any co-ordination of our defence plans with other States who are with us in the system of collective security, and we on this side will strenuously oppose the Government not because we do not think that this country must have adequate defences in order to pay its part in collective security, but because we believe that the Government's insincerity over collective security is only equalled by their inefficiency in defence organisation.

6.9 p.m.

Mr. CHURCHILL

My right hon. Friend the Minister for the Co-ordination of Defence at the outset of his speech opined that what he called "the close season" as affecting himself was over, and that he was now liable to be shot at. I would like to reassure him that, so far as I am concerned, he is certainly not to blame for anything that has gone wrong in the present situation. No responsibility for the position in which we stand rests upon his shoulders, whatever may be the responsibilities which he is contracting towards the future. He has succeeded to a lamentable inheritance. The delays which have taken place in putting our defences in order have been intolerable. Three years ago the plainest warnings and the fullest accounts were given of what was happening elsewhere. Even a year ago or thereabouts, when 100 or more Members sent a memorial to the Prime Minister for the appointment of such a functionary as we now have the advantage of having with us, no decision was taken. I ask the Prime Minister, at any time, to explain to us why a whole year has been wasted before arriving at decisions which are now admitted to be necessary.

The Leader of the Liberal party asked why the Minister for the Co-ordination of Defence was not appointed before the defence scheme was settled. A very obvious question. I have asked it myself, but where is the answer? There is no answer. It was not until February of this year that the White Paper defining the office of my right hon. Friend was given to Parliament, and even after that there were three weeks of delay in selecting the man to fill the office. No explanation has ever been forthcoming of all this wasted time in the fulfilment of what, is now represented as a necessary step, though I admit a subsidiary step. That is where we are to-day. Let me say to my right hon. Friend that, while no one is going to try to fix responsibility upon him or harass him in his difficult task, he must not expect, because he, having been appointed to this office, must necessarily study these matters and acquire knowledge of them, that during that period in this most critical time, the necessary criticism and investigation of the House of Commons into defence matters will be suspended. I am sure he would not expect that, and I give him every possible disclaimer, as far as I am personally concerned, that no one is attempting to attach the slightest blame to him.

First I will deal with the character and scope of the new office which has been created. I do not think such a plan could have been made by anyone who apprehended the problem. There are three Service Departments, the Admiralty, the War Office and the Air Ministry.