Commons Sitting of 25 November 1936

Preamble
The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.
ORAL ANSWERS TO QUESTIONS.
  DEFENCE.

    FORCES (STRENGTH).
    Mr. H. G. WILLIAMSasked the Minister for the Co-ordination of Defence

    Return for October, 1936, of the Numbers of the Regular Forces, the Auxiliary Forces and the Reserves of the Royal Navy, the Army and the Royal Air Force.

    —

    Regular Forces.

    Auxiliaries.

    Reserves.

    Total.

    Royal Navy and Royal Marines

    101,380*

    Nil

    30,596

    131,976

    Army

    199,849†

    141,234

    161,084‡

    502,167

    Royal Air Force

    51,901

    1,667

    10,887

    64,455

    * Including the Royal Marine Police Force.

    †Excludes numbers who were temporarily with Colours on account of the Palestine emergency

    ‡Includes numbers who were temporarily with Colours on account of the Palestine emergency.

    ARMAMENTS MANUFACTURE.
    Mr. SHORTasked the Minister for the Co-ordination of Defence whether in future he will arrange, in cases where a firm declines to provide adequate machinery for the settlement of grievances, to make such provision, in conjunction with the appropriate trade unions, a condition of the firm's participation in the production of armaments?
    Sir T. INSKIP: It is the policy of the Government to rely upon the machinery already existing in industry for the settlement of difficulties between employers and employed. When there is failure to reach agreement the matter may be reported to the Minister of Labour under the Industrial Courts Act. I have no reason to believe that other measures are necessary, but if the hon. Member has any case in mind I should be glad to give the matter further consideration.

    DISTRESSED AREAS (CONTRACTS).
    Sir WILLIAM JENKINSasked the Minister for the Co-ordination of Defence
    the total number of men serving in the defence forces at the end of October, 1936, and 1935, respectively; and whether he will publish a return showing for each of the three Services the numbers in the regular forces, the auxiliary forces, and in the reserves?
    The MINISTER for the CO-ORDINATION of DEFENCE (Sir Thomas Inskip): The total number of men serving in the defence forces, including the auxiliary forces and the reserves, at the end of October, 1936, was 698,598 as compared with 660,820 at the end of October, 1935; the return asked for in the second part of the question will appear in the OFFICIAL REPORT.
    whether the Government have taken any steps to ask the distressed areas producers to supply any material to any Government Departments; and if so, will he state the value or quantity supplied from these areas, and give the same particulars for the South Wales area for 1935, and the latest date in 1936 separately?
    Sir T. INSKIP: Direct contracts to a total value of about £39,000,000 have been placed by the Defence Departments in distressed areas between 1st April, 1935, and 1st October, 1936. These areas of course also benefited by sub-contracting to an amount which cannot be estimated. I am advised that figures cannot be obtained for particular areas without undue labour.

    MOTOR INDUSTRY.
    Mr. SHORTasked the Minister for the Co-ordination of Defence whether, when consultation took place with the motor manufacturers respecting the setting up of the shadow factories, a similar approach was made to the trade union representatives of the employés con-

    391
    cerned; and, if not, whether it is proposed to do so?
    Sir T. INSKIP: No, Sir. The proposals were not such as to interfere in any way with the normal relations between the firms concerned, as employers, and the organisations representing their employés.
    Mr. SHORT: Is the right hon. Gentleman aware that there is considerable dissatisfaction and ill-feeling in the engineering industry in connection with these factories and others, and would it not be wise to interview the representatives of the unions?
    Sir T. INSKIP: I prefer to leave the ordinary organisations to function in the usual manner.
    Mr. KIRKWOOD: In the event of circumstances arising in which these parties do not come to agreement, may that not leave terrible dissatisfaction in the workshops; and what action does the Minister propose to take in those circumstances?
    Sir T. INSKIP: I have already said in answer to a previous question, that the Industrial Courts Act provides a remedy in such circumstances.
    Mr. SHORT: Has the right hon. Gentleman seen the recent issue of the journal of the Amalgamated Engineering Union?
    Sir T. INSKIP: Perhaps the hon. Member will let me have a copy.

    PRIORITY OF ORDERS. (17).
    Mr. CHORLTONasked the Minister for the Co-ordination of Defence whether any modification has taken place in the control of priority of manufacture of various supplies; and whether he takes any action at the present time to regulate within any works the priority of the orders going through?
    Sir T. INSKIP: The Government, as was indicated in the recent Debate on defence in this House, have not thought it necessary to ask for the compulsory powers which would be requisite for either of the purposes referred to by my hon. Friend.
    Mr. CHORLTON: Is it definitely the case that the right hon. Gentleman has no power to order priority of work within a workshop at present?
    Sir T. INSKIP: I have no compulsory powers to settle the internal arrangements of any manufactory.

    AIR STRENGTH, FOREIGN COUNTRIES.
    Mr. MUFF(for Mr. A. HENDERSON) asked the Minister for the Coordination of Defence whether he is in a position to state the approximate number of war planes possessed by Germany, Russia, Italy and France?
    Lieut.-Colonel Sir A. LAMBERT WARD (Comptroller of the Household)(for Sir T. INSKIP): No published information relating to the present strengths of the Air Forces of these four countries is available.

    CALCIUM CARBIDE (MANUFACTURE).
    Mr. SEXTONasked the Minister for the Co-ordination of Defence whether he intends to implement the suggestion of Mr. Malcolm Stewart in his latest report and set up machinery for the manufacture of calcium carbide in the Special Area of South-West Durham, where there is an abundance of excellent limestone and suitable coal, as well as large numbers of unemployed familiar with the work of quarrying and mining?
    Sir A. LAMBERT WARD: The suggestion referred to by the hon. Member was made in regard to South Wales. The question whether a calcium carbide works based on power derived from coal could economically be set up in a special or distressed area was one of the issues discussed in this House last Session on the Second Reading of the Caledonian Power Bill. I have been informed that the matter has been further considered by those interested but that they have not so far been able to modify their view that the use of hydro-electric power is necessary to the success of the scheme.
    Mr. C. WILLIAMS: Will my hon. and gallant Friend impress upon the Minister that in these cases every effort should be made to give the work to the distressed areas and help the coal mining industry, rather than to ruin other good areas?

  CHINA AND JAPAN.
  Mr. CHORLTONasked the Secretary of State for Foreign Affairs whether he will ask the Japanese Government how

  393
  they reconcile the military occupation of Chahar and part of Suiyuan with their obligations under the Nine Power Treaty to respect the territorial integrity of China?
  The SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Eden): From such information as is at the disposal of His Majesty's Government, it would not appear that Japanese troops are in military occupation of Chahar or part of Suiyuan.
  Mr. MANDER: Is it not a fact that the Japanese Government have long ceased to be able to reconcile anything they do, with existing Treaty obligations?
  Mr. HANNAH: What about the Russians in Sinkiang and Outer Mongolia?
  Mr. CHORLTON: Can we have some particulars of the effect on textile imports into North China?
  Mr. EDEN: That is another question.

  SPAIN.
  Mr. MANDERasked the Secretary of State for Foreign Affairs whether he will consider, in connection with the proposals now before the Non-Intervention Committee for neutral inspection commissions at Spanish ports and aerodromes, whether this would not, in effect, in view of events of the last few months, be a further sanction against the Spanish Government; and whether the plan has met with the approval of the committee and has been submitted to or accepted by the Spanish Government and the rebels?
  Mr. EDEN: I understand that the Non-Intervention Committee has agreed in principle that a scheme of this nature should be submitted to the two parties in Spain for their approval. The details of the scheme are still under consideration, and no approach has yet been made to the two parties. There is no question of the scheme being put into execution until the consent of both the Spanish Government and the Burgos authorities has been obtained.
  Mr. MANDER: Can the right hon. Gentleman say whether it is intended to go forward with the naval and military parts, without waiting for agreement on
  394
  the air part? Is it proposed to postpone consideration of the air agreement until the other parts have been put into effect?
  Mr. EDEN: These are matters for the committee. Perhaps the hon. Member would put down another question or see me about it.
  Major-General Sir ALFRED KNOXasked the Secretary of State for Foreign Affairs whether, in view of the provisions of the pact of non-intervention, he will make representations to the French Government to the effect that they should not permit the departure of 2,000 French volunteers to join the Spanish combatants at Barcelona?
  Mr. EDEN: The question of the enlistment of volunteers is not covered by the Agreement regarding Non-Intervention in Spain, which relates only to the prohibition of the export of war material.
  Sir A. KNOX: Has the right hon. Gentleman taken notice of the report in the "Times" of the arrival of 2,000 French volunteers at Barcelona; and does he not think that, at any rate in spirit, that is a breach of the agreement?
  Mr. KIRKWOOD: Has the right hon. Gentleman noticed something nearer home—in the Irish Free State? Has he noticed that General O'Duffy and a party of volunteers are going out to fight in Spain?
  Sir A. KNOX: Are 40 Irishmen equal to 2,000 Frenchmen?
  Mr. KIRKWOOD: We have always thought so.
  Mr. SHINWELLasked the Secretary of State for Foreign Affairs whether the ban on the conveyance of war material by British vessels to Spain applies to commodities such as foodstuffs and coal?
  Mr. EDEN: No, Sir.
  Mr. SHINWELL: Does that mean that British vessels containing foodstuffs intended for the Spanish Government or Spanish traders will receive the protection of the British Navy?
  Mr. EDEN: I think, if the hon. Member reads my answer, he will appreciate that it is quite clear.
  Mr. SHINWELL: Is the right hon. Gentleman aware that there is considerable concern in shipping and coal circles as to the intended legislation; and will he, in the meantime, give them some assurance on this matter?
  Mr. EDEN: I was quite clear about it. I said that it did not affect the items mentioned—foodstuffs or coal.
  Mr. CHARLES WILLIAMS: Does "war material" include cannon fodder?
  Mr. EDEN: The definition which will be applied will cover those articles of export which are already prohibited, under the non-intervention agreement.
  Miss RATHBONEasked the Secretary of State for Foreign Affairs whether he has information of any considerable amount of arms having been supplied from Russia to the Spanish Government at any date between the signing of the non-intervention pact by the Union of Soviet Socialist Republics and 15th October?
  Mr. MANDERasked the Secretary of State for Foreign Affairs which countries, according to the information in his possession, have committed breaches of the non-intervention agreement; and whether he will disclose the information on which this is based and the periods during which the supplies in question were made?
  Mr. EDEN: There is certain evidence of arms having been supplied to Spain from various countries during the period mentioned in the hon. Lady's question. I have already explained that this information, in so far as we have been able to substantiate it, has been placed before the Non-Intervention Committee. I am, therefore, not able to make any further statement on the subject.
  Miss RATHBONE: Has the right hon. Gentleman's attention been called to a statement made to the Press by a French delegation two days ago that M. Blum had told one of them personally only a day or two before that he knew of no evidence that any substantial amount of arms had been sent by Russia before 15th October, and does he agree with the accuracy of that statement?
  Mr. EDEN: I think the hon. Lady will appreciate that I have troubles enough
  396
  without checking reported statements of other Prime Ministers at second-hand.
  Mr. MANDER: Can the right hon. Gentleman say which country it is that is more to blame in respect to breaches of the agreement than Germany and Italy? Is it Portugal, is it Japan, is it France, is it Russia?
  Viscount CASTLEREAGHasked the Secretary of State for Foreign Affairs whether he has received any communication from the Spanish insurgent authorities regarding arrangements to minimise in any way the suffering in and destruction of Madrid during the present fighting?
  Mr. EDEN: Yes, Sir. In reply to a suggestion from His Majesty's Ambassador and certain of his colleagues at Henclaye, General Franco caused Sir H. Chilton to be informed on 20th November that he agreed to the extension by approximately one square mile of the security zone in Madrid. This area now includes the British and United States Embassies and several Legations. This area will, I trust, be of value in affording a zone of safety for non-combatants of all kinds.
  Mr. KIRKWOOD: Is the right hon. Gentleman in a position to tell us that this will include any section of the working classes within Madrid, or is it just some special place such as the palaces of the great and wealthy of Madrid live in?
  Mr. EDEN: Our objective is to try to get agreement about one area which will not be shelled. Into that area it is for those concerned to move people if they think fit, and I think the House will agree that that is satisfactory.
  Mr. NOEL-BAKERasked the Secretary of State for Foreign Affairs whether he has received any report concerning the arrest by Spanish rebel warships of the Norwegian vessel steamship "Lisken," which left Dundee on 7th November for Valencia with a cargo of seed potatoes, and which was forcibly conducted into the port of Vigo when her cargo was discharged; and whether he can give the House any information concerning the circumstances in which this violation of international law occurred.
  Mr. EDEN: I understand that the master of the Norwegian steamship

  397
  "Lisken" has informed the naval authorities at Gibraltar that at 6 p.m. on 15th November he was stopped and interrogated by two Spanish armed trawlers wilen off Cape Finistere and 10 miles clear of land. One trawler went alongside and ordered the steamship "Lisken" to follow into Cape Finistere Bay. The master refused on the ground that he was well outside Spanish territorial waters, but an armed guard was then placed on board and the ship proceeded to Vigo. On arrival there, according to the master, the insurgent naval commander gave orders that the ship's cargo, which consisted of seed potatoes consigned to the Agricultural Department of the Spanish Government, should be confiscated. The ship is now at Gibraltar awaiting orders.
  Mr. NOEL-BAKER: In view of the great importance of such offences to the maritime Powers of the world, does not the right hon. Gentleman think it would be possible for His Majesty's Government to take the initiative in organising a protest against the lawlessness of the rebels in these matters?
  Mr. EDEN: No, Sir; this is merely a matter for the Norwegian Government. Our own position has been, and remains, absolutely clear.
  Mr. NOEL-BAKER: But is not the case that all maritime Powers have a common interest in assuring that the international law is kept by all countries, and could the right hon. Gentleman not therefore see his way to take some protest?
  Mr. EDEN: I say that our position is absolutely clear. Other countries must take what action they think fit.
  Colonel WEDGWOOD: Is this not clearly a case of piracy, and in that case is it not in the interest of Great Britain to see that piracy is put down, as we have done hitherto?
  Mr. NOEL-BAKERasked the First Lord of the Admiralty what reports he has received from His Majesty's ship "Glowworm" concerning the firing of torpedoes by unidentified submarines against the Spanish Government warships "Miguel de Cervantes" and "Mendez Nunez" at the entrance to Cartagena harbour on 22nd November; and whether he can give any information to the House?
  The FIRST LORD of the ADMIRALTY (Sir Samuel Hoare): I have received reports which indicate that on 22nd November severe explosions occurred on board the Spanish cruiser "Miguel de Cervantes." The damage caused is stated to be consistent with damage due to torpedo attack. I have no information concerning the alleged attempt to torpedo the Spanish warship "Mendez Nunez."
  Mr. NOEL-BAKER: Has the right hon. Gentleman seen the report in the Press that the Spanish Government have established that it was a torpedo which struck the vessel?
  Sir S. HOARE: No, I do not think I have. In any case, it is essentially a question for the Spanish Government.
  Mr. NOEL-BAKER: In view of the fact that it is of vital interest to all Powers, including Great Britain, that the facts should be established, and in view of the fact that out of such incidents there is a danger that international war may arise, could the right hon. Gentleman not give instructions to His Majesty's ships in Spanish waters to make such reports as are possible to establish the facts when such incidents occur?
  Sir S. HOARE: No, Sir. It is of vital interest to the British Government that we should not interfere.
  Sir RONALD ROSS: Will my right hon. Friend entirely rule out the possibility of the damage being caused either by mine or torpedo fired from small craft?
  Sir S. HOARE: I do not think it is within my province to express any views about this matter. I have no official information to justify me in so doing.
  Colonel WEDGWOOD: Have we got a British warship at Cartagena from which the right hon. Gentleman could get reports?
  Sir S. HOARE: If the right hon. and gallant Gentleman will put that question down, I will give him an answer.
  Mr. A. HOPKINSON: Are we to understand that the right hon. Gentleman, like the Foreign Secretary, proposes to mind his own business?
  Sir S. HOARE: Yes, Sir.
  Sir EDWARD CAMPBELL(for Mr. LEWIS) asked the Secretary of State for Foreign Affairs whether he will take steps to make it clear to the Spanish authorities that those Members of both Houses of Parliament who are proceeding to Madrid and who have stated to the Press that they are a delegation of British Members of Parliament are, in fact, not a delegation from Parliament at all, but a number of private individuals who happen also to be Members of one or other of the Houses of Parliament?
  Mr. EDEN: The Members of both Houses of Parliament who are now visiting Spain do not, so far as I am aware, claim to represent Parliament as a whole. The purpose of their visit, which is purely humanitarian, has been made clear to the authorities both at Madrid and Burgos.
  Mr. MANDER: Have these Members gone with the right hon. Gentleman's knowledge and consent?
  Mr. EDEN: Of course I was fully aware that they were going.
  Sir PERCY HARRISasked the Secretary of State for Foreign Affairs whether His Majesty's Government have approached Foreign Powers, members of the non-intervention committee, with a view to an agreement by which they will make it illegal for their nationals to use their ships to carry war material to Spanish ports; and, if so, what answers have been received?
  Mr. EDEN: No such approach has been made.
  Sir P. HARRIS: Does the right hon. Gentleman intend to make such an approach? Surely it is equally important that other countries should not use their ships for this purpose?
  Mr. EDEN: I am quite prepared to consider that, but I think it would be much the best if all other countries would observe the agreement, as we do.
  Mr. BELLENGER(by Private Notice) asked the Secretary of State for Foreign Affairs whether His Majesty's Ambassador in Hendaye has yet received a reply from the Spanish rebel leader regarding safe anchorage for British shipping in Barcelona and whether, in view of the projected bombardment of that fort by rebel naval forces, His Majesty's Government
  400
  will take immediate steps to evacuate the British residents.
  Mr. EDEN: The answer to the first part of the hon. Member's question is, No, Sir. As regards the second part, full facilities have been provided ever since the outbreak of hostilities, and are still being provided for the evacuation of British subjects from Barcelona. These British subjects have been repeatedly warned of the risks which they are incurring by declining to avail themselves of these facilities. His Majesty's Consul-General at Barcelona has, however, no powers to compel British subjects to leave against their will; and he has reported that there is at present no desire on the part of those still remaining to leave under threat of bombardment.
  Mr. BELLENGER: Has the right hon. Gentleman any hope of obtaining an answer in the very near future to His Majesty's Ambassador's representations?
  Mr. EDEN: Yes, Sir; we have received a reply in relation to all the other ports except Barcelona. I am asking for a reply with respect to Barcelona. I would deprecate any attempt to make more alarmist reports about this matter than are warranted by circumstances.

  RUSSIA.
  Sir WILLIAM DAVISONasked the Secretary of State for Foreign Affairs what is the reason for the delay in entering into negotiations with the Russian Soviet Government for a formal treaty of commerce and navigation, seeing that the temporary interim agreement was made in February, 1934, and meanwhile nothing has been done to implement the pledges repeatedly given to British creditors; and whether notice to terminate the temporary agreement with a view to its replacement by a formal treaty will be given, especially as the interim agreement has failed in its object of providing additional employment in Great Britain?
  Mr. EDEN: As my hon. Friend is aware, His Majesty's Government have always declared that a settlement of the claims of British subjects is a necessary condition for the negotiations of a formal Treaty of Commerce and Navigation with the Union of Soviet Socialist Republics. It is owing to the fact that it has not been possible to reach such a settlement

  401
  that negotiations for a Treaty have not yet been attempted. As regards the last part of the question, I am informed that it would not be correct to say that the existing Trade Agreement has failed to provide additional employment in this country, and I trust that the recent agreement providing for guarantees in connection with orders to be placed by Soviet import organisations for goods manufactured in the United Kingdom will furnish further opportunities of which our producers will take full advantage.
  Sir W. DAVISON: Does my right hon. Friend recollect that he informed me in February last that this matter was continuously receiving the attention of the Foreign Office, and that he did not then think any undue delay had occurred; is he aware that nine months have now elapsed, and that a very important chance has been missed of negotiating a permanent treaty in connection with the £1C,000,000 loan which was granted?
  Mr. EDEN: The point is that we have not negotiated a permanent treaty, and we shall not negotiate a permanent treaty unless we can get a settlement.
  Mr. T. WILLIAMS: Is it not the case that we have already more unemployment than we can manage, without taking notice of the hon. Member for South Kensington (Sir W. Davison)?
  Mr. E. J. WILLIAMS: Does that not also apply in substance to the case of Italy and Welsh coal?

  COLLECTIVE SECURITY.
  Mr. MANDERasked the Secretary of State for Foreign Affairs whether he will consider the advisability, with a view to emphasising the practical nature of the Government's support of collective security, of initiating at once, with States loyal to the League of Nations, consultations, with a view to arrangements for joint action in the military sphere as regards France, Belgium, Iraq and Egypt and in the economic sphere with the others?
  Mr. EDEN: I do not think that the hon. Member's proposal would serve any useful purpose.
  Mr. MANDER: Are we to take it that there will be no arrangement for concerted action, even in economic affairs,
  402
  where we might be called upon to act with other States?

  MEXICO (BRITISH SUBJECTS DEATHS).
  Major PROCTERasked the Secretary of State for Foreign Affairs whether he has made inquiries from the Mexican Government as to the circumstances in which Major John Curtis Hartley, D.S.O., M.C., M.M., of Accrington, late of the Canadian Machine Gun Corps, and Mr. E. M. Geake, former naval commander, were recently killed by bandits in the Golden Head mining zone between Villa Ocampo and Rosario in Northern Mexico; and whether he will consider making an application to the Mexican Government for compensation
  Mr. EDEN: I have received a despatch from His Majesty's Minister at Mexico City, reporting the murder of Mr. Geake and Major John Curtis Hartley on 6th November. Owing to the remoteness and inaccessibility of the place where the murder was committed, detailed information is not yet available, but, as soon as this report reached him, His Majesty's Minister at once approached the Mexican Government asking for full particulars and urging that all possible steps will be taken to ensure that the murderers are arrested and brought to trial. Pending the receipt of fuller information I am unable to say whether there are grounds for asking the Mexican Government for compensation for any dependants of the murdered men.
  Major PROCTER: Do I understand that if there are grounds, the Foreign Office will be insistent on getting compensation?
  Mr. EDEN: Certainly, if there are grounds.

  ROYAL NAVY.

    FIRTH OF FORTH (FLEET, VISITS).
    Mr. MATHERSasked the First Lord of the Admiralty whether he is aware of the popularity of the Fleet on its rare visits to the Firth of Forth; whether he knows of the disappointment caused to thousands of intending visitors owing to the bad weather prevailing when the Fleet was in the Forth last

    403
    month; and whether it is possible for more frequent visits to be paid to the Forth?
    Sir S. HOARE: I can assure the hon. Member that the Fleet much appreciates the welcome it receives on its visits to the Firth of Forth, but as normally one-third of the sea time of the Home Fleet is spent each year in the Firth, I regret that it would not be possible to arrange more frequent visits to this area.
    Mr. MACQUISTEN: Will the right hon. Gentleman see that visits are paid by the Fleet especially to Campbeltown and Dunoon, where there is good anchorage?

    HIS MAJESTY'S SHIP "HASTY" (OUTBREAKS OF FIRE).
    Mr. DAYasked the First Lord of the Admiralty whether he will give particulars of the two recent outbreaks of fire that have occurred in Britain's latest destroyer, His Majesty's Ship "Hasty," on 12th and 14th November; and whether, from the investigations that have already been made, there is any suspicion of foul play or sabotage?
    Sir S. HOARE: The first which occurred on 12th November was caused by two leads of a wireless set coming into contact and the rubber covering of

    Year.

    Dartmouth Cadets entered.

    Special entry Cadets.

    Royal Marines first appointments other than Corps Commissions.

    Promotions from Lower Deck other than through Warrant Rank.

    Corps Commissions, R.M., from the Ranks (other than through Warrant Rank).

    Executive.

    Engineering.

    Executive.

    Engineering.

    1931

    …

    97

    14

    20

    6

    12

    4*

    1

    1932

    …

    100

    16

    16

    16

    8

    4

    —

    1933

    …

    105

    23

    11

    14

    6

    4*

    —

    1934

    …

    100

    25

    13

    25

    5

    4*

    1

    1935

    …

    122

    38

    13

    25

    3

    3*

    1

    1936

    …

    135

    75

    23

    35

    4

    4*

    1

    Totals

    659

    191

    96

    121

    38

    23

    4

    * In addition one Artificer Apprentice was selected for promotion to Midshipman (E) or Cadet (E) in these years.

    Mr. PARKERasked the First Lord of the Admiralty the number of captains, commanders, lieutenant-commanders, lieutenants and sub-lieutenants, and the total of these officers, and the number of commissioned gunners and gunners and com-
    the wires burning; that on 13th November by the short circuiting of the wires to the overspeed device on a turbo-generator. There is no suspicion of foul play or sabotage in either instance.
    Mr. DAY: Will the right hon. Gentleman say whether there were any injuries to the personnel during these outbreaks?
    Sir S. HOARE: I think there were not, but I will look into the question, and if there were, I will let the hon. Member know.

    OFFICERS.
    Mr. PARKERasked the First Lord of the Admiralty the number of cadets entered for the executive and engineering branches of the Navy through Dartmouth College and the public schools and the number of Royal Marine officers entered in each year during the years 1931 to 1936; and the number of promotions to commissioned rank from the lower deck in these branches under the sub-lieutenant and similar schemes in each year during the same period?
    Sir S. HOARE: As the answer to this question consists of a table of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
    Following is the table:
    missioned boatswains and boatswains, re-respectively, and the total of these two classes of officers on the active list of the Navy List in July, 1914, and at the present time?
    Sir S. HOARE: As the answer to this question consists of a table of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
    Following is the table:

    Rank.

    Number on Navy List.

    July, 1914.

    November, 1936.

    Captain

    281

    215

    Commander

    416

    418

    Lieutenant-Commander

    744

    977

    Lieutenant

    1,296

    1,075

    Sub-Lieutenant

    332

    169

    3,069

    2,854

    Chief or Commissioned Gunners

    193

    332

    Gunners

    908

    312

    Chief or Commissioned Boatswains

    118

    33

    Boatswains

    238

    83

    1,457

    760

    NOTES.—(i) The numbers of Captains to Sub-Lieutenants refer only to Officers of the Executive category; (ii) the numbers for 1914 include Officers on the Supplementary Lists.

    MEDITERRANEAN FLEET.
    Vice-Admiral TAYLOR(by Private Notice) asked the First Lord of the Admiralty whether he has seen reports referring to certain Fleet movements in the Mediterranean, and to the fast that the shore leave of naval personnel at Malta had been stopped, and attributing these circumstances to developments in the international situation connected with events in Spain; and whether he has any statement to make.
    Sir S. HOARE: Yes, Sir. I am glad to be able to contradict a most misleading report which was circulated yesterday by a news agency to the effect that, following the increasing threats of a blockade of Barcelona by the ships of General Franco and the reported interference of Spanish insurgent warships with both a Greek and a Norwegian merchant vessel, all British naval leave had been stopped in Malta. The report immediately went on to say that at the same time the Flagship of the First Submarine Flotilla, Mediterranean Fleet, His Majesty's Ship "Cyclops," left Malta yesterday for Spanish waters, that she was accompanied out of the harbour by the submarines of her Flotilla, eight in number, and that though no official information was given as to the destina-
    406
    tion of these submarines, it was reliably understood in Malta that they too were bound for Spanish waters.
    The true facts are that His Majesty's Ship "Cyclops," which left Malta yesterday, and His Majesty's Ship "Galatea" and the Third Destroyer Flotilla, which will sail to-morrow, are relieving other ships in accordance with a programme arranged some weeks ago. The suspension of leave in Malta was due to the violent gale which struck the island yesterday, and which made communication between ships and shore impossible. The action taken is a normal routine on the Mediterranean Station in such circumstances. If submarines left Malta harbour yesterday it could only have been for a short routine exercise, which would not, of course, be reported to the Admiralty.
    Sir JOSEPH LAMB: Is it not possible to take some action against agencies which deliberately circulate these reports, causing international danger?
    Sir S. HOARE: I hope the answer I have given to this question will be a warning that agencies should not circulate irresponsible reports of this kind in the future.
    Sir J. LAMB: May I ask for a more emphatic reply to my question?
    Mr. KIRKWOOD: The First Lord of the Admiralty, in his original reply, referred to the warships belonging to General Franco. I would like to ask him if these are ships that General Franco stole from the Spanish Government, or where did he get them?
    Mr. SPEAKER: I heard nothing about General Franco in the question.

  PALESTINE.

    ARABS AND JEWS (WEAPONS).
    Colonel WEDGWOODasked the Secretary of State for the Colonies whether he is yet in a position to give the House any information as to the disarming of the Arabs in Palestine or as to how far the Jews are now armed; and whether this is a matter left to the High Commissioner to decide?
    The SECRETARY of STATE for the COLONIES (Mr. Ormsby-Gore): As regards the first part of the question, I am not in a position to add anything

    407
    to the reply which I gave to the right hon. and gallant Member on 3rd November. As regards the second part of the question, this is a matter for decision by His Majesty's Government in consultation with the High Commissioner.

    DISTURBANCES.
    Mr. T. WILLIAMSasked the Secretary of State for the Colonies how many Jews were killed by Arabs and how many Arabs were killed by Jews during the recent disturbances in Palestine?
    Mr. ORMSBY-GORE: I have not got this information, but I will ask the High Commissioner if he can supply it.
    Colonel WEDGWOODasked the Secretary of State for the Colonies whether he will seek to discover how far the rioting in Palestine was supported and supplied from the Arab kingdoms and from European countries; and whether, in particular, our treaty relations with Iraq do or do not prohibit action of this nature on the part of that country?
    Mr. ORMSBY-GORE: As regards the first part of the question, I have nothing to add to the reply which I gave to the right hon. Member on 3rd November. As regards the second part of the question, the Anglo-Iraqi Treaty of Alliance contains an undertaking by each party not to adopt abroad an attitude which mint create difficulties for the other party. I have no reason to suppose, however, that there has been any breach of this undertaking on the part of the Iraqi Government, although assistance has undoubtedly been given to some extent by individuals in or from Iraq.
    Colonel WEDGWOOD: As the answer to which the right hon. Gentleman refers me said that he had no information, I am now asking whether he will endeavour to obtain information?
    Mr. ORMSBY-GORE: The only information I have is that there were individual Syrians and Iraqi engaged in assisting the insurgents.
    Colonel WEDGWOOD: Is the right hon. Gentleman aware that representatives of Iraq and, I think, of other Arab States, are in Jerusalem assisting the Arabs to prepare their case or assisting them to force the hands of the British Government?
    Mr. ORMSBY-GORE: No, Sir.

    JAFFA-HAIFA ROAD.
    Mr. RANKINasked the Secretary of State for the Colonies whether his attention has been called to the fact that recent military operations in Palestine were substantially hampered by the absence of adequate road facilities between Jaffa and Haifa; and whether the construction of this road is now to be speeded up?
    Mr. ORMSBY-GORE: Authority was given to the High Commissioner on 30th July for the urgent execution of work on the Jaffa-Haifa road recommended for reasons of public security, involving expenditure of about £77,000 in addition to £25,000 for which advance approval had been given earlier in the year.
    Lieut.-Colonel HENEAGE: Can my right hon. Friend say who will pay for the road?
    Mr. ORMSBY-GORE: The Palestine Government.
    Brigadier-General CLIFTON BROWN: Is not the real reason operations were hampered that they had no mounted troops?

    EMERGENCY REGULATIONS.
    Mr. PRITTasked the Secretary of State for the Colonies whether, seeing that the general strike of the Arabs in Palestine has been terminated, the Emergency Regulations, 1936, and amendments thereof, made under the Palestine (Defence) Order in Council, 1931, will be withdrawn; and whether he can see his way to advise the pardon or release or, alternatively, the trial under the regular criminal code, of any Arab prisoners or wounded Arabs now in hospital who might be liable to prosecution under those regulations?
    Mr. ORMSBY-GORE: The question of the withdrawal of Emergency Regulations made under the Palestine (Defence) Order in Council is one for the consideration of the High Commissioner in the light of his appreciation of the situation in Palestine. As regards the second part of the question, any recommendations which the High Commissioner may make regarding the treatment of those liable to prosecution under those Regulations will receive my careful consideration.

    JEWISH IMMIGRATION.
    Captain CAZALETasked the Secretary of State for the Colonies whether any plan has been drawn up by the authorities in Jerusalem and London to be submitted to the Royal Commission suggesting conditions for the future regulation of Jewish immigration into Palestine, whereby a fixed numerical relationship shall be maintained between Jews and Arabs?
    Mr. ORMSBY-GORE: No plan such as that referred to by my hon. and gallant Friend has been drawn up by His Majesty's Government, and I am not aware that any such plan has been placed before the Royal Commission on behalf of the Palestine Government.
    Captain CAZALET: May I ask whether the evidence given before the Royal Commission by officials in Palestine is given by them as private individuals or as representatives of the administration there, or of the Government here?
    Mr. ORMSBY-GORE: It is given by them as heads of their several departments on questions of fact. Officials appearing before the Commission are under oath, and any reply they give is their own.
    Mr. T. WILLIAMS: Will it be made perfectly clear that each civil servant who goes before the Royal Commission gives evidence entirely on his own behalf and not on behalf of the High Commissioner or of His Majesty's Government?
    Mr. ORMSBY-GORE: The High Commissioner has already given evidence, and he was perfectly free to give what evidence he thought right in all the circumstances. There have been no instructions from here, and there is no suggestion that there is any evidence on behalf of the Palestine Government.
    Colonel WEDGWOOD: Will the right hon. Gentleman make it certain that any evidence they give is on questions of fact, and that they do not put forward schemes which they hope the Commission will adopt?
    Mr. ORMSBY-GORE: The right hon. and gallant Gentleman knows that the Royal Commission is independent of the Government, and is entitled to ask anybody who appears before it any question,
    410
    and the witness is more or less bound to answer. Therefore it is not wholly or merely evidence on questions of fact. If they are asked on matters of opinion they are free to answer for themselves.
    Sir ARTHUR MICHAEL SAMUEL: Would it not be well to let it be known that unless questions are asked by the Commission, no suggestion should be put forward until after all the evidence has been taken?
    Mr. ORMSBY-GORE: That is the position. I have been very careful in this House not to give any expression of opinion as to future policy in Palestine.

  ST. HELENA.
  Mr. LUNNasked the Secretary of State for the Colonies whether he is aware of the serious conditions prevailing in St. Helena; that following upon the widespread epidemic of influenza in June and July there is considerable ill-health among the population; that 50 per cent. of the workpeople are unemployed, wages have been reduced and unemployment relief cut down; and whether he will have immediate inquiry made with a view to some amelioration of conditions in the island?
  Mr. ORMSBY-GORE: I have made inquiries of the Governor of St. Helena on the matters referred to, and as the reply is a long one, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
  Mr. LUNN: Does the answer mean that there will be inquiry into all these grievances in the island?
  Mr. ORMSBY-GORE: No, Sir; the answer is that the hon. Member has been misinformed.
  Mr. DUNCAN: Is it not a fact that the suggestions in the question are greatly exaggerated?
  Following is the reply:
  The Governor of St. Helena has reported that the general health of the island is better at present than it has been for some time, and that the effect of the outbreak of influenza, which was of a non-virulent type, disappeared some time ago. My information is that the percentage of unemployed is not as

  411
  high as is suggested in the question; that there has been no reduction during the past three years in the wages paid either to the regular employés of the Government or to employés in the flax milling industry, which is the principal industry of the island; and that there has been no reduction in the rates of wages paid by the Government in respect of unemployment relief work. There has been some increase in unemployment recently owing to curtailment of flax milling, in consequence of which the Government unemployment relief work has been increased, but I understand that there is some prospect of additional employment in the flax-milling industry becoming available in the near future. As regards the last part of the question, the Governor is fully alive to the needs of the situation, and various steps, including the appointment of an agriculture and forestry officer and the growing of experimental crops, have been, and are being, taken with a view to obtaining alternative means of livelihood for the islanders. I would point out that the total population is a little under 4,000, and the annual revenue under £25,000.

  COLONIES (LOCAL DEFENCE FORCES).
  Colonel WEDGWOODasked the Secretary of State for the Colonies whether he will give a list of the Colonial local forces available, respectively, for local defence and for defence of the Empire generally, noting how far they have been brought up to date with modern weapons and air arm; and will he state what steps are being taken to enlist greater support as, for instance, in Malta, Palestine, Cyprus, or Ceylon?
  Mr. ORMSBY-GORE: I would refer the right hon. and gallant Gentleman to a Stationery Office publication entitled "Notes on the Land and Air Forces of the British Oversea Dominions, Colonies, Protectorates, Mandated Territories and Territories under Condominium," which contains information concerning the constitution, terms of service and armament of the Colonial local forces. Inspection reports on each of these forces are rendered annually by competent military officers, and reviewed by the proper authorities in this country, and these forces are kept up to date in regard to weapons and training.
  Colonel WEDGWOOD: Will the right hon. Gentleman be so good as to send me a. copy of that publication? May I ask him whether attention is being paid to the air services in these various forces, so that they may be able to take some part in modern warfare?
  Mr. ORMSBY-GORE: Certainly, we are doing all we can to develop auxiliary air forces and flying clubs in those Colonies where it is found possible to do so.
  Colonel WEDGWOOD: May I ask in particular whether there is any chance of getting a local air force or local force of any kind in Malta or Cyprus?
  Mr. ORMSBY-GORE: There is a considerable air force in Malta, already. The question of further air development in Cyprus is under consideration.

  CYPRUS.
  Mr. MATHERSasked the Secretary of State for the Colonies whether he can make any statement on the measures taken in Cyprus to carry out the recommendations of the Financial Commissioner appointed in 1934; whether the burden of taxation on the agricultural producer has been lowered; and whether steps have been taken to provide water supplies and irrigation and to develop a sound co-operative credit system?
  Mr. ORMSBY-GORE: As the hon. Member is no doubt aware, the Financial Commissioner made a great number of recommendations—in fact over 100—and I could not conveniently state in detail in this reply what action has been taken with regard to all of them. I can, however, say that many of the recommendations have already been adopted, whilst others, including those relating to the very important question of agricultural credit, are still under consideration. The answer to the second part of the question is in the negative, and to the third part in the affirmative. I am happy to state that a grant has been obtained from the Colonial Development Fund of £30,000 for preliminary work upon the development of the underground water resources of Cyprus and that an officer has already been selected to direct operations. An administrative officer has been appointed Registrar of Co-operative

  413
  Credit Societies, and the co-operative legislation recommended by the Financial Commissioner is now being prepared.
  Mr. MATHERS: In view of the urgency of the development still to be undertaken, will the right hon. Gentleman give an assurance that it will be pursued as speedily as possible
  Mr. ORMSBY-GORE: As speedily as the financial resources of the colony will allow.
  Colonel WEDGWOOD: May we be assured that it will not put up the price of land?
  Mr. MATHERSasked the Secretary of State for the Colonies for what reasons the editor of the Cypriot newspaper "Kypros" has been refused permission by the authorities to republish articles which had already appeared in his paper with the approval of the censor?
  Mr. ORMSBY-GORE: The Governor of Cyprus, in the exercise of his discretion under powers conferred upon him, held that the republication of a series of tendencious articles designed to reopen issues which in the past have led to violence and disorder was contrary to the interests of peace and good order in Cyprus, and I can see no reason for my intervention.
  Mr. MATHERS: Does not the Minister think it strange that articles which at the time of difficulty could pass the

  Railway Construction in East Africa, 1931–35.

  Dependency and Railway Line.

  Method of Financing.

  Grants or Loans from Imperial Government.

  1. Kenya and Uganda Railway. Yala-Butere Extension (10·75 miles).

  Loan funds raised by Kenya Government on behalf of the Kenya and Uganda Railway.

  None.

  2. Tanganyika. Branch Railway from Manyoni to Kinyangiri (93·58 miles).

  Loan funds raised by Tanganyika Government.

  Free grant of £30,000 from the Colonial Development Fund to cover interest charges for two years.

  3. Nyasaland Railway from Blantyre to Salima (160 miles).

  Sums advanced to Nyasaland Railways Limited by Nyasaland Government from Nyasaland Loan Funds.

  A grant of £500,000 was made from the Colonial Development Fund to meet interest charges on Nyasaland Guaranteed loans for a period of years.

  (Total length of lines constructed = 264 miles.)

  censor, should now under better conditions fail to do so?
  Mr. ORMSBY-GORE: Not at all. The hon. Member will remember that when these articles appeared Government House was burned down and reinforcements had to be sent to the colony. I have no desire for this anti-British campaign to be reopened.

  EAST AFRICA (RAILWAY CONSTRUCTION).
  Mr. DAYasked the Secretary of State for the Colonies the total length of railway lines that have been constructed in the British dependencies in East Africa during the five years ended 31st December, 1935; the manner in which this construction has been financed; and whether any grants or loans for same have been made by the Imperial Government?
  Mr. ORMSBY-GORE: As the answer is in the form of a tabulated statement, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
  Mr. DAY: Are the development and construction of the railways proceeding satisfactorily?
  Mr. ORMSBY-GORE: Yes, most of the railways to which I am referring are nearing completion.
  Following is the statement:

  NYASALAND (INQUIRY).
  Mr. McGHEEasked the Secretary of State for the Colonies whether he will inform the House of the reasons for the recent investigation into the conduct of certain high officials in Nyasaland; and whether, before coming to a decision, he will give information to the House on the subject?
  Mr. ORMSBY-GORE: In August, 1935, the Governor of Nyasaland appointed a commission to investigate all gold transactions in the Treasury and to inquire into rumours reflecting upon the conduct of certain Government officials. Their report found that the rumours were distorted and exaggerated, and that there had been no impropriety. I have already authorised the Governor to make a public statement in Nyasaland that no useful purpose would be served by the publication of the report or by further public discussion of the matter.

  ROYAL AIR FORCE (AERODROMES).
  Brigadier-General BROWNasked the Under-Secretary of State for Air whether the officials or advisers employed by the Ministry for the selection and acquisition of sites for aerodromes and other works in connection therewith have any agricultural qualifications or agricultural experience; and whether they consult the landowners with a view to siting stores or other works in connection with aerodromes with the least possible damage by severance to the adjoining farms?
  The UNDER-SECRETARY of STATE for AIR (Sir Philip Sassoon): The answer to both parts of the question is in the affirmative.
  Brigadier-General BROWN: Is it the practice in every case for the Ministry to consult the landowners concerned before entering into direct negotiations with their tenants?
  Sir P. SASSOON: Certainly, it would be part of the duty of the land officer to consult with them.
  Brigadier-General BROWNasked the Under-Secretary of State for Air what is the total area of agricultural land acquired by the Air Ministry, or in respect of which notices to treat have been
  416
  given by the Ministry, since 1st January, 1935, as sites for aerodromes or other works in connection therewith; the approximate additional area to be acquired for these purposes; and whether, in selecting such sites, the productivity and value of the land for agricultural purposes, or the damage done by the arbitrary selection of a portion of a farm, is taken into consideration by the Ministry?
  Sir P. SASSOON: The total area asked for in the first part of the question is approximately 18,000 acres. As regards the second part, I regret that a useful estimate of the further total area to be acquired cannot be given at this stage, and as regards the last part, the considerations mentioned by my hon. and gallant Friend are given the fullest possible weight.
  Brigadier-General BROWN: Is it a fact that no compensation whatever is paid in respect of the diminution in value of adjoining residential property resulting from the establishment of an aerodrome in the immediate vicinity?
  Sir P. SASSOON: All questions of hardship are taken into account.
  Captain HEILGERS: Can my right hon. Friend say how many agricultural workers have been displaced?

  GATWICK AIRPORT (NIGHT LANDINGS).
  Mr. PERKINSasked the Under-Secretary of State for Air (1) whether the Lorenz system for blind landings is yet in operation at Gatwick airport;
  (2) whether he will consider temporarily transferring the night air service to and from Scandinavia from Gatwick airport to Croydon airport, in view of the absence of the Lorenz blind landing equipment as well as certain other equipment necessary for a night service at Gatwick?
  Sir P. SASSOON: I am glad to be able to inform the House that the installation of the Lorenz apparatus at Gatwick Airport is on the point of completion, and that it will be ready for operation by the end of this week. In view of this fact my hon. Friend will, no doubt, agree that the second question does not arise.
  Mr. DINGLE FOOT: Will my right hon. Friend make it plain to all the pilots engaged on these night flying services that they have a right to go to Croydon Aerodrome if they are not satisfied with the weather conditions at Gatwick?
  Sir P. SASSOON: The company make it a habit to suspend the services if they think the weather is unfit for flying, and, in addition to that, the pilots have express instructions to proceed to Croydon or to any other aerodrome if there is any doubt about the weather at their destination.

  TRANSPORT.

    RIVER TAY (ROAD BRIDGE).
    Mr. FOOTasked the Minister of Transport whether he has considered the case submitted to him by the Dundee Town Council in support of the project for a road bridge over the Tay; and whether he has reached any decision on this matter?
    The MINISTER of TRANSPORT (Mr. Hore-Belisha): Yes, Sir, but I am precluded from pursuing the matter further at the present time for the same reasons which led to the Government's decision on the schemes for the construction of bridges over the Forth, Humber and Severn, and I am so informing the local authorities.
    Mr. FOOT: Are we to understand from that reply that all projects of national development, however necessary, are to be held up indefinitely?
    Mr. HORE-BELISHA: No, Sir.

    MOTOR ACCIDENTS, KENSINGTON.
    Vice-Admiral TAYLORasked the Minister of Transport whether his attention has been called to the serious number of motor accidents which occur in Holland Park Avenue between. Campden Hill and the Clarendon; and whether he will take any action in the matter?
    Mr. HORE-BELISHA: Yes, Sir, and certain action has been taken.
    Vice-Admiral TAYLOR: Is the Minister not aware that the local authorities have been endeavouring to overcome these accidents for some. time, but have not met with success, and can he utilise
    418
    his Department in order that they may be able to overcome their very serious difficulties?
    Mr. HORE-BELISHA: No, Sir, I was not aware that they were not meeting with success, but it is the desire of my Ministry to afford them every possible assistance in any steps they are taking.
    Vice-Admiral TAYLOR: May I ask the Minister to acquaint himself with the very large number of accidents occurring on that road to-day? Things are no better now than they were before. It is a very serious matter, because it is a very dangerous road.
    Mr. HORE-BELISHA: I answered that question. I have informed myself, and I have afforded the authorities certain assistance, and I said that action had been taken.

    TRAFFIC FACILITIES, HYDE PARR.
    Vice-Admiral TAYLORasked the Minister of Transport whether any decision has yet been come to with regard to improving traffic facilities on the north side of Hyde Park; and whether, in view of the Coronation, this matter can be expedited?
    Mr. HORE-BELISHA: I will send my hon. and gallant Friend a copy of the answer which I gave to a question on this subject last week.
    Vice-Admiral TAYLOR: Is the Minister not aware that this matter has been under consideration by the various Departments for a very considerable time, and that it is an urgent matter in view of the congestion of traffic which takes place there, and which will become far worse owing to the Coronation, and will he expedite the matter and have a plan agreed to and carried out?
    Mr. HORE-BELISHA: I hope that my hon. and gallant Friend is not still trying to affix the responsibility, wrongly, to me. I have to get the consent of the responsible authorities, and that I have clone my best to secure, and I am not without hope that in the end I shall secure it.
    Sir W. DAVISON: Can the right hon. Gentleman say whether he has gone further into the suggestion which was submitted to him some months ago that

    419
    a roundabout should be formed round the island enclosure, which would greatly relieve this congestion of traffic?
    Mr. DUNCAN: Will my right hon. Friend expedite the matter, so that the work can be completed before the Coronation?

    LEVEL CROSSINGS.
    Mr. RANKINasked the Minister of Transport whether there are any level crossings on the roads which he is to take over as national trunk roads; and whether he can give an assurance that he will eliminate the level crossings on these roads as soon as he has the power to do so?
    Mr. HORE-BELISHA: I would refer my hon. Friend to the answer which I gave on this matter on 19th November, of which I am sending him a copy.
    Mr. LOUIS SMITH: Does not the right hon. Gentleman think that before expenditure is undertaken on the widening of roads, the abolition of level crossings in the country should have consideration?
    Mr. HORE-BELISHA: For some time past we have been encouraging the elimination of level crossings by offering special grants of 75 per cent. of the cost.

    MOTOR COACH TOURS.
    Mr. ROWSONasked the Minister of Transport whether he is aware of the dissatisfaction prevailing in Lancashire and Cheshire among motor coach proprietors and their patrons concerning the decision of the Southern Traffic Commissioners to curtail and prohibit certain motor coach tours to the south and west coast resorts; and whether he will take steps to have the matter reconsidered?
    Mr. HORE-BELISHA: My jurisdiction is appellate, and is being invoked in these cases.
    Sir R. ROSS: Is it proper in cases where matters are subject to appeal for Parliamentary pressure to be exercised on the Minister who has to decide the appeal?
    Mr. MACQUISTEN: Will the right hon. Gentleman see that this policy of the railway companies of trying to suppress road transport is brought to an end?

    MAIN LINE TRAINS (LADIES' COMPARTMENTS).
    Mr. DAYasked the Minister of Transport whether he will consider making representations to the various railway companies of Great Britain asking them to have one or more compartments set aside and labelled "For ladies only" on all main line trains?
    Mr. HORE-BELISHA: This, I am informed, is the practice.
    Mr. DAY: Is it riot a fact that there are many non-corridor trains on which no such reservation is made?
    Mr. HORE-BELISHA: I am informed that there are carriages marked "Ladies only," but that the ladies prefer not to use them.

    SPEED LIMIT OFFENCES.
    Mr. TURTON(for Mr. LOVATFRASER) asked the Minister of Transport whether he will introduce legislation which shall require justices to state publicly what are the special reasons which have led them to order that a motorist's licence should not be endorsed when convicted of exceeding the speed limit?
    Mr. HORE-BELISHA: I have noted my hon. Friend's suggestion, which I should not overlook in any amendment of the Road Traffic Acts which may become necessary.

    SOUTHWARK AND CAMBERWELL.
    Mr. AMMON(for Mr. SILKIN) asked the Minister of Transport whether he is aware of the serious difficulties and hardship caused to residents of Southwark and Camberwell in getting to and from their work owing to inadequate means of transport; whether his attention has been drawn to a reply made recently by the chairman of the London Passenger Transport Board to a deputation from Southwark and Camberwell to the effect that no action could be taken by the board to deal with the problem; and whether, in the circumstances, he is prepared to take any and, if so, what action in the matter?
    Mr. HORE-BELISHA: I am informed by the chairman of the board that the views expressed by the deputation to which the hon. Member refers are being

    421
    placed before the Standing Joint Committee set up under the London Passenger Transport Act, 1933.
    Mr. AMMON: Are we to understand that the Minister intends to abandon the idea of dealing with this matter?
    Mr. HORE-BELISHA: I have not abandoned it, because I am not responsible, but the board has it in mind.

  SECRETARY OF STATE FOR FOREIGN AFFAIRS (SPEECH).
  Mr. SHINWELLasked the Prime Minister whether he has considered the speech delivered by the Secretary of State for Foreign Affairs in which he stated the conditions on which this country would resort to the use of arms; whether this represents Government policy; and whether he would issue a White Paper in amplification of the speech in order to clarify the position?
  The SECRETARY of STATE for the HOME DEPARTMENT (Sir John Simon): The answer to the first and second parts of the question is, Yes, Sir. As regards the third part, I think that the Government's policy as expressed by my right hon. Friend is perfectly clear, and I do not think any further steps such as suggested are required.
  Mr. SHINWELL: If, in the opinion of the right hon. Gentleman, the speech of the Foreign Secretary represented Government policy, why was it not made in this House instead of being made outside?
  Sir J. SIMON: I think the statement made by my right hon. Friend was a perfectly proper statement to make, and it was admirably clear, but I am not aware that it laid down anything very new.
  Miss RATHBONE: Is the House to infer that the Government have definitely departed from that policy of steady and collective resistance to all acts of unprovoked aggression to which the right hon. Gentleman the Member for Chelsea (Sir S. Hoare) told us on 11th September last year that he and his Government adhered with a firm, enduring and universal persistence?
  Sir J. SIMON: I do not think there is any case for setting one declaration
  422
  against the other. What was stated by the Foreign Secretary was stated on behalf of the whole Government.

  CROWN PROCEEDINGS BILL.
  Mr. FOOTasked the Attorney-General whether it is the intention of His Majesty's Government to introduce the Crown Proceedings Bill during the lifetime of the present Parliament?
  The SOLICITOR - GENERAL (Sir Terence O'Connor): No, Sir.
  Mr. FOOT: Why not?
  The SOLICITOR-GENERAL: For the reason given by my hon. and learned Friend.
  Mr. FOOT: In view of the fact that the reason given was that there was not sufficient agreement in the House upon the Measure, will the hon. and learned Gentleman say from what quarter the opposition comes and whether, if he is shown that there is sufficient unanimity in the House desiring the Bill, the Government will reconsider their decision?
  The SOLICITOR-GENERAL: I should like to see that question on the Paper.

  THE CORONATION (SPECIAL POSTAGE STAMP).
  Mr. LYONSasked the Postmaster-General whether any and what decision has now been reached with reference to the issue of a special Coronation stamp?.
  The ASSISTANT POSTMASTER-GENERAL (Sir Walter Womersley): I am not yet in a position to announce a decision.
  Mr. LYONS: If I put a question down a week hence, after consideration has been given to the matter, will my hon. Friend be able to make a statement?
  Sir W. WOMERSLEY: This matter is receiving careful consideration, and, as soon as he can, my right hon. and gallant Friend the Postmaster-General will announce the decision arrived at.
  Mr. MANDER: Is the design to be submitted to the Royal Fine Art Commission, and if not, will the Minister consider this suggestion?

  TELEPHONE SERVICE (LEICESTER AND LONDON).
  Mr. LYONSasked the Postmaster-General what progress has now been made in the establishment of additional telephone lines between Leicester and London?
  Sir W. WOMERSLEY: Four additional direct lines between Leicester and London are being provided to meet anticipated growth of traffic, and are expected to be brought into use by Christmas. The relation between the public demand and the lines provided to meet it is kept under constant review, and records for the past few months show that the service between Leicester and London is well up to standard and, indeed, compares favourably with the average for the country.
  Mr. LYONS: Although the Postmaster-General may consider the service satisfactory, may I ask whether it is expected that the additional lines at Christmas will meet the heavy demand between those two places?
  Sir W. WOMERSLEY: Yes, Sir, this Christmas box to Leicester will meet all the requirements of that time. We shall keep the matter under constant review, realising that hon. Members are very keen about it. If further lines are required, they will be provided.
  Sir R. ROSS: Why did my hon. Friend not keep the lines to Belfast under equally careful consideration?

  COAL INDUSTRY (EXPORT TRADE).
  Mr. SHINWELLasked the Secretary for Mines whether the Government have in contemplation the provision of a subsidy or any similar form of assistance for the export trade in coal?
  The SECRETARY for MINES (Captain Crookshank): I would refer the hon. Member to the answer which I gave on 9th November to the hon. Member for Carmarthen (Mr. Hopkin), of which I am sending him a copy.
  Mr. SHINWELL: May we have an indication from the Government whether they intend to do anything for the export trade?
  Captain CROOKSHANK: I do not think the hon. Gentleman can have in mind what the answer said
  Mr. SHINWELL: Will the hon. and gallant Gentleman enlighten me?
  Captain CROOKSHANK: If you, Sir, would allow me to repeat myself, I would—
  Mr. SPEAKER: That might set a very bad precedent.

  AIR RAID PRECAUTIONS.
  Mr. CARYasked the Secretary of State for the Home Department whether he can give the House any information as to further progress in respect of air raid precautions, with special reference to the provision of gas masks, gas-proof shelters where practicable, the provision of blast-proof and splinter-proof steel screens for windows, and the supply of bleaching powder for de-contamination purposes; and whether it is the intention of his Department to carry out, in conjunction with the appropriate municipal authorities, specific tests to familiarise the public in the adoption and use of the protective measures in question?
  The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. Geoffrey Lloyd): I am satisfied that substantial progress is being made in the organisation of air raid precautions. Mass production of respirators for the civilian population is about to begin, and arrangements are in train for the provision of adequate supplies of the materials required in the event of war, such as bleaching powder. The public will be advised to remain indoors in a room which has been protected against gas and splinters, and it is not proposed to recommend the use of steel screens for windows, as sandbags are a better protection. Use is being made of the facilities for the training of the public in measures of air raid precautions which already exist in various parts of the country, and every effort will be made to encourage local authorities to undertake this work, usually in conjunction with the St. John Ambulance Brigade or British Red Cross Society.
  Captain ARTHUR EVANS: Is it proposed to take any steps against Socialist county councils who refuse to take part in this very necessary public duty?
  Mr. LLOYD: The Air Raid Precautions Department of the Home Office is receiving co-operation from councils of all political parties. There is only one important local authority in the country which is not co-operating.
  Mr. H. G. WILLIAMS: Which is that?
  Mr. THURTLE: Can the hon. Gentleman give the House an assurance that, after all these arrangements are completed, the population of this country will be immune from gas attacks?
  Sir W. DAVISON: Will my hon. Friend tell the House the name of this authority?
  Mr. LLOYD: I think it is Barnsley.

  EMPLOYMENT OF WOMEN AND YOUNG PERSONS ACT, 1936.
  Mr. RHYS DAVIESasked the Home Secretary whether he has yet set up an advisory committee to which he can refer important questions in connection with the operation of the two-shift system for women and young persons; if so, whether he will state the names of the committee; and whether any order has been issued under Section 1 of the Employment of Women and Young Persons Act, 1936, as regards the arrangements to be made for ascertaining the views of the workpeople by a secret ballot?
  Mr. LLOYD: Yes, Sir. The promised committee was set up last month, and the members are as follow:
  Sir Gerald Bellhouse, Chairman.
  Mr. Thomas Ashurst (Secretary of the Cotton Spinners' and Manufacturers' Association).
  Brigadier-General A. C. Baylay, D.S.O. (Chairman of the Birmingham and District Engineering Employers' Association).
  Miss F. Hancock (Organiser, Transport and General Workers Union).
  Mrs. Stuart Horner, M.B., B.S. (His Majesty's Medical Inspector of Factories).
  Mr. W. Kean, J.P. (General Secretary of the National Union of Gold, Silver and Allied Trades).
  Mr. H. M. Moulden (General Secretary of the Leicester and Leicestershire Amalgamated Hosiery Union).
  Mr. A. J. Palfreyman (Chairman of the National Federation of Hosiery Manufacturers' Associations).
  Miss F. I. Taylor (His Majesty's Deputy Chief Inspector of Factories).
  The committee was asked to give immediate consideration to the procedure to be adopted for consulting the workers and taking the secret ballots required by the Act, and a draft Order to give effect to their recommendations has now been issued. Copies of the draft Order can be obtained from His Majesty's Stationery Office, and I am sending one to the hon. Member.
  Mr. BROOKE: Will the Under-Secretary say why no representative of the woollen textile industry was invited?
  Mr. LLOYD: The names were selected from a list submitted by the General Council of the Trades Union Congress.
  Miss RATHBONE: Does the hon. Gentleman not consider that, in a committee affecting women almost entirely, the proportion of women on this proposed committee is quite inadequate?

  ENTERTAINMENTS DUTY.
  Colonel BALDWIN-WEBBasked the Financial Secretary to the Treasury the amount received in Entertainments Duty in each month for which figures are available subsequent to July, 1936; and how such figures compare with similar months in 1935?
  The FINANCIAL SECRETARY to the TREASURY (Lieut.-Colonel Colville): As the answer involves a table of figures, I will, with my hon. and gallant Friend's permission, circulate it in the OFFICIAL REPORT.
  Following is the answer:
  The approximate receipts from Entertainments Duty for each month from July to October, 1936, together with the corresponding figures for the same period of 1935 were as follow:

  1936.

  1935.

  £

  £

  July

  607,200

  479,500

  August

  626,400

  584,000

  September

  665,800*

  639,400

  October

  765,900*

  682,200

  *These figures are subject to correction.

  Colonel BALDWIN-WEBBasked the Financial Secretary to the Treasury what has been the yield of Entertainments Duty since the beginning of the present financial year up to the latest date for which figures are available?
  Lieut.- Colonel COLVILLE: The approximate yield of Entertainments Duty since the beginning of the present financial year up to 31st October last, was £4,453,000.
  Mr. KIRKWOOD: Is it not a fact that reducing the Entertainments Duty has been of benefit to the Exchequer?
  Lieut.-Colonel COLVILLE: Perhaps the hon. Gentleman will kindly look at the figures in the OFFICIAL REPORT when he should see the answer for himself.

  SPECIAL AREAS.
  Mr. JENKINSasked the Minister of Labour when the Government's further proposals for dealing with the Special Areas will he submitted to this House?
  The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Lieut.-Colonel Muirhead): The Government are pressing forward with their consideration of this question, but I cannot yet give the date when their proposals will be submitted to the House.

  HOUSING.

    LEASES.
    Mr. JAMES GRIFFITHS(for Mr. HOPKIN) asked the Attorney-General whether his attention has been called to the large number of long leases on dwelling houses which are now terminating or about to terminate; and whether he is prepared to take any and, if so, what action to alleviate the hardship consequent on the termination of such leases?
    The SOLICITOR-GENERAL: As far as the position on termination is concerned, I would draw the lion. Gentleman's attention to Section 18 of the Landlord and Tenant Act, 1927, which prevents an unreasonable use being made of the covenant to repair in cases where the buildings are to be pulled down or structurally altered. My Noble Friend the Lord Chancellor has had his attention drawn to certain other cases of
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    hardship arising out of the technical breach of long leases, and he is making inquiries to see whether such cases would justify legislation and could be rectified by an amendment of the law or otherwise.
    Mr. BELLENGER: May I ask whether the last part of the answer refers to the user?
    Mr. MACQUISTEN: Would not the Solicitor-General admit that one of the worst pieces of long-lease tyranny was Regent Street on the part of the Government?
    The SOLICITOR-GENERAL: The last part of my answer referred to certain abuses which have been brought to the notice of my Noble Friend. The character of these abuses is the purchase of leases by speculators and then an attempt to enforce the covenants in order to resell the reversion. That matter is under the close consideration of my Noble Friend.

    BUILDING (STANDARDS).
    Mr. AMMON(for Mr. SILKIN) asked the Minister of Health whether he is aware of the hardship caused to many persons of small means who have innocently bought jerry-built houses; and, if so, what action he proposes taking to prevent this evil in the future?
    The MINISTER of HEALTH (Sir Kingsley Wood): I am aware of particular cases in which allegations of unsatisfactory building have been made. As the hon. Member is aware, the building industry itself, through the National Federation of Building Trades' Employers, is taking steps, with my encouragement, to establish good house-building standards. The scheme with which I am in close touch includes the framing of a model specification, guarantees and certification, and is now about to come into operation.
    Mr. THORNE: Would it be possible for the surveyors of boroughs to give a certificate of good building?
    Sir K. WOOD: I rather think that the local authorities might have something to say about that.
    Mr. THURTLE: Does not the Minister feel that this is one of the evils which necessarily arise from private enterprise?
    Sir K. WOOD: The complaints which reach me have not been confined to private enterprise.
    Mr. HOPKINSON: Is it not a fact that some of the very worst cases are houses build under the original Addison scheme?

  TRAMP SHIPPING SUBSIDY.
  Mr. H. G. WILLIAMS(for Captain PLUGGE) asked the President of the Board of Trade whether, in laying before the House the continuance of the £2,000,000 subsidy towards tramp shipping, he will undertake to guarantee that the vessels constructed by the help of this subsidy shall be built in Great Britain?
  The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin): Under the provisions of the British Shipping (Assistance) Acts, which it is proposed to continue, subsidy is not paid in respect of construction, but is paid in respect of tramp voyages performed by eligible ships. If my hon. and gallant Friend means that newly-built ships coming on the Register next year should only be eligible for subsidy in that year if they have been constructed in United Kingdom yards, I am in agreement with him.

BALLOT FOR NOTICES OF MOTIONS.
  RECRUITING.
  Mr. PALMER: I beg to give notice that, on this day fortnight, I shall call attention to recruiting for the Defence Forces, and move a Resolution.
  NATIONAL PARKS.
  Mr. MANDER: I beg to give notice that, on this day fortnight, I shall call attention to the subject of national parks, and move a Resolution.
  COAL EXPORT TRADE.
  Mr. GEORGE HALL: I beg to give notice that, on this day fortnight, I shall call attention to the condition of the coal export trade of this country, and move a Resolution.

  DECLINE OF POPULATION.
  Miss RATHBONE: I beg to give notice that, on this day fortnight, I shall call
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  attention to the danger to the national well-being and security of the approaching steep and steady decline of the population, and the necessity of making provision for lessening the economic burdens of parenthood, and move a Resolution.

MESSAGE FROM THE LORDS.

  GAS PRISES.
  That they have appointed a Committee consisting of Seven Lords to join with a Committee of the Commons as a Joint Committee on Gas Prices, pursuant to the Commons' Message of yesterday.
  That they propose that the Joint Committee do meet in Committee Room 4, on Tuesday, the 15th of December next, at Eleven o'clock.

  CONSOLIDATION BILLS.
  That they have appointed a Committee of Six Lords to join with a Committee of the Commons as a Joint Committee on Consolidation Bills in the present Session, and request the Commons to appoint an equal number of their Members to be joined with the said Lords.

GAS PRICES.
So much of the Lords Message as relates to the time and place of meeting of the Joint Committee on Gas Prices, considered.
Ordered,
"That the Committee appointed by this House do meet the Lords Committee as proposed by their Lordships."—[Sir G. Penny.]
Message to the Lords to acquaint them therewith.

ELECTRICITY SUPPLY INDUSTRY.
3.53 p.m.
Mr. R. J. TAYLOR: I beg to move,
"That this House, believing that the national ownership and control of the electricity supply industry is an essential step in a programme of nationally-planned economic development, is of opinion that electricity generation and distribution should be brought under national ownership and control and that there should be established a national electricity authority responsible for securing the efficient direction and management of the industry, subject to such ministerial and other direction as may be provided for by statute."
I make no apology for moving this Motion. To-day we have electricity as one of the most potent and essential elements in our national life, and I believe that, as the result of the wonderful invention that has come about with its introduction, the possibilities of a higher standard of life for our people are immeasurably greater to-day than they have been over a period of any thousand years to which we may go back. In my lifetime there has been tremendous improvement both in regard to its production and its application. The possibilities of the production of electricity have increased enormously by the skill of the technician, by the international exchange of science and invention and by the very high standard of the engineers and technicians of our own country. The people who have been responsible for this beneficent power when used correctly have not been the shareholders of any company. They have been the working men who have been successful in advancing their education along certain very well-defined lines which have carried them to the development of electricity.
In regard to its application, it is not so very long ago—1881, I believe—that we had the first town lighted in this country, and at that time the country thought that that largely covered the possibilities of electricity. But since then we have moved on until we have been able to apply electricity not only to lighting but to heating, to cooking and to power generally, and our towns have been beautified in this sense that, as we have increased the use of electricity, we have taken from the towns, to a very considerable extent, the terrible smoke nuisance. If we could remove it from London, probably we should not have hanging over us the fogs
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which we have been experiencing in the last few days. To-day we are manufacturing cloth and providing food for the people and we have been becoming gradually more and more dependent upon electricity. One of the most beneficent aspects of it is in the home, where working women spend their lives, and I am sure that one of the most deadly enemies of health, namely, dirt, could be almost eliminated if our people were able to procure electricity in their homes at a price that they were able to pay. To me, the most important consideration is this. Men go to their work, and earn probably or £2 or 10s. a week if they are lucky. Some are earning considerably less, but because their earnings are at that level they are living in little homes—homes for all that—some with large families, and the wife of that worker has from marriage to live a life of drudgery. I am thoroughly convinced that if we could bring to our working women the benefits of electricity at the working man's economic price, the lives of our working mothers in the homes of England would be brightened and, most important, they would have some leisure to enjoy. For that reason I am very pleased to move this Motion.
What is the reason why we are not able to supply electricity at these economic prices? The reason seems to me to be this: When we began the use of electricity we thought its possibilities were limited; and private enterprise never comes in if it cannot see a gilt-edged security. I know that it is said sometimes that if the rate is high enough they will take a risk, but I think I can prove my statement by saying that the first Act that was passed to deal with electricity was passed in 1882 and that in every Act, with the exception of one, that has dealt with electricity, provision has been made for the public authority to take over the control and supply and distribution of electricity. In the very first stage it was the local authorities who blazed the trail for electricity. Private companies, the private shareholders, came along when they had seen the possibility of it and when they recognised it as a gilt-edged security. They are hanging on to-day like limpets on a rock, because they know the possibilities of electrical development and that we are only just on the fringe of that development.

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As I said, 1882 was the date of the first Act dealing with electricity. Under that Act 639 Provisional Orders were issued giving authority for the supply and distribution of electricity. Some of the 639 Orders were not taken up 'out 354 were granted to local authorities and only 164 to private companies. I make that statement because I believe that we are indebted to the local authorities for the cheap electricity that we get in this country to-day. Then there is power. When the Act was passed which enabled power companies to supply and in some cases to distribute electricity, we got the Electricity Commissioners. It seems a great pity that at the outset we did not nationalise this industry. The hon. Member for South Croydon (Mr. H. G. Williams), who is to move an Amendment to my Motion, I see smiling, laughing. His hilarity is based on his interest in the electrical industry. Mine is not; my interest is centred on what I want electricity to do for me and for all the people of the country equally. I believe that this should be a great public service.
I have dealt to some extent with electricity for lighting. The possibilities of electricity for heating and power were clearly recognised during the Great War. I have had occasion to look up the report of the Coal Conservation Committee, which was presided over by Lord Haldane. That report states:
"In the factories put down for the production of munitions during the War 95 per cent. of the machinery is driven by means of electricity, and it is only a question of time for all power to be applied in this way."
There has been a tremendous increase in the use of electricity. The increase since 1922, in lighting and heating and cooking, has been about seven times, and in power about three times. That increase has occurred in spite of the tremendous limitation that the majority of the people of this country are unable to purchase electricity when they want it. Let me recall again the report of the Coal Conservation Committee. That committee made some very practical suggestions as to the situation of plants for generating electricity. We coal miners are largely interested in electricity. I have a figure or two that I want to quote in order to show the bearing that electricity has on the coal industry, but more
438
particularly the bearing that the coal industry has on electricity on account of the cheapness of coal. The Coal Conservation Committee suggested that, if the generating stations were placed in the coal-mining areas, where the coal was, high tension mains could carry the current to the place where it was needed. In spite of that we went on as before because there was no national planning. No one seems to have thought about national planning until the Labour party came along and said that we ought to plan electricity supply. Take the case of Northumberland, which I know best. An enormous quantity of Northumberland coal comes into the London market to generate electricity, and the cost of conveying that coal from Northumberland to London must be added to the cost of generating the electricity. It seems to me that it would have been a much wiser arrangement, especially now that we have had a grid system, to light up the whole country, to have generated the electricity from a place like Northumberland and to have brought the juice down here instead of bringing the coal here.
I have mentioned Northumberland only, but my remarks are applicable to every area where it is necessary to place a generating station in order to get a full and sufficient service of electricity. In the Midlands generating stations are placed in the middle of towns. That is all wrong. It would have been a good deal better had we reversed all this process. We are now at another stage in electricity development. We have reached the stage when we have another report issued dealing with electricity. It is the report of an inquiry which has been carried out in the light of the operation of the grid system, now complete. What that inquiry found is that, although the grid has made certain things possible in the supply of electricity, the current is still not coming to the consumer, because there is a dam somewhere. They say that it is because of the small undertakings, and they suggest that undertakings which are distributing less than 10,000,000 units a year shall be compulsorily put out of existence. Those that are distributing more than 10,000,000 units may go in the same way.
I had not the slightest expectation that my Motion would have created as much interest as it undoubtedly has

439
created. The interest is remarkable, especially on the part of local authorities. The local authorities appear to be nervous as to what is to happen to them. Personally I have no wish that they should go out of existence until at least I can be assured of national control and ownership. Then I think that in the larger interests they would be prepared to go. I say that because I believe that at the present time prices are altogether in favour of the local authorities. The Minister of Transport will correct me if I make a mistake, but I will give one figure, and it is units at a charge of 3d. I find from this report that 61 per cent. is to the credit of the local authorities and only 17 per cent. to the credit of private enterprise. Therefore, if we lose the local authorities we shall be handed over to those who will exploit us.
I said that I would say something about the coal industry in relation to electricity. From the figures of 1934–35, I find that the capital expenditure of companies at the end of the year was £177,754,197, and the gross surplus £15,299,814. In respect of public authorities the capital expenditure was £271,054,807, and the gross surplus £21,650,542. The interest charges of the public companies amounted to £2,716,000, and the dividends were £6,213,950. In other words, dividends represented roughly 40 per cent. of the gross surplus. The average cost of coal, including handling, and 2 per cent. for coke, was 14s. 10d. per ton. I believe that if we could have this industry nationalised, instead of all this keen cutthroat competition in the coal industry, it would be much easier to find an economic price that would ensure a decent wage for the miner. We are not making electricity with white power yet, but with coal. I can assure the House that we in the mining industry do not want the wages paid by public authorities to be reduced, but we should be delighted if our men could have the same amount of wages. If we are finding the raw material that generates the electricity, surely, as the prime producers, we ought to be guaranteed a decent wage for mining the coal. If we had a single authority, or authorities in the regions under national control it would be so much easier to find the economic price, and for that reason, if for no other, I move this Motion.
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It has been said, and I think it is quite true, that with the modern development of electricity less coal has been used. I believe that there has been a reduction of 17½ per cent., which has been brought about largely, I suppose, by the electric motor, the grid and various other technical improvements. But there is bound to be a point at which we reach finality in regard to improvements in that respect. There is sure to be an increasing use of electricity, and as that increase continues, the use of coal will be considerably extended. There is much that needs to be said in regard to the chaotic state of prices in the common uses of electricity. It is most amazing that, as things are at the moment, on account of being able to distribute in watertight areas and by an alteration of the boundaries of local authorities, you can have anomalies arising in the situation. A man told me yesterday that in the backyard of his house a certain price obtains for electricity because it is under one authority, and that at the front of his house, which is under another authority, there is a difference in the price of 3d. or 4d. a unit.
I will give an illustration in regard to prices to show that, as things are with the grid, we have not solved the problem. Some time ago in the North of England an education authority built an elaborate school, and in Durham they have some magnificent institutions under the education authority. They made application for a supply of electricity and were told that the price would be 4d. a unit, but as an education authority under the Durham Labour administration who put efficiency with economy first, they could not see their way to pay that price. There is no one who can say that, as far as Durham is concerned, efficiency and economy have ever been sacrificed for profligacy, such as can be charged against some industries in the North of England. There men have received 3d. after a lifetime of saving as the share which they expected was to provide an annuity for them in later life. These are men who have invested their money in private enterprise. But as I have said, the education authority were not prepared to pay 4d. a unit. They went to another local authority and obtained a connection at 2d. a unit, and when they made

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inquiries they found that that local authority was taking their supply from the people who wanted to charge 4d. Surely, that is a sufficient illustration of the chaotic state of the affairs of the industry. I have had other letters. Here is one that has come from a part of Yorkshire:
"The supply of electricity and its price is now a matter affecting practically every individual industry, and it is felt that these matters cannot now be left in the hands of concerns whose primary object is that of making dividends for shareholders."
That is from an authority. I will read another portion of it because probably every hon. Member speaking to the Amendment will be interested in it:
"My association feel very strongly that, unless something drastic is done, places like the West Riding are not going to get much, if any, advantage from the grid scheme, which has been laid down at great expense, owing to the fact that Section 21 of the Electricity Supply Act, 1926, relates to charges for electricity supplied by power producers and not to distributors.
The Electric Distribution, Yorkshire, Limited, get their supplies from the Yorkshire Electric Power Company, and both these concerns, it is understood, are owned by the same people. It is obvious, therefore, that so long as a good profit is made, it is immaterial whether it is made by the power company or the distribution company, and my association considers that this Box and Cox arrangement should be put an end to as speedily as possible."
Mr. H. G. WILLIAMS: Will the hon. Member say what association wrote those letters?
Mr. TAYLOR: I have exceeded my time, and I am very sorry. I want to make an appeal to the House. We have been talking a great deal about unification lately. We want to unify the coal fields. When we talk about it outside we say "nationalisation." The coal-owners throw up their hats, and although they have not joined up with the miners, they will be pleased about it. Why cannot we do that with this industry? Until we nationalise this concern, the poorer areas will not get electricity. The wires are now laid on, and we should nationalise the industry as we did the Post Office. I know of some districts in England where the postman goes to the farmer twice a day, and often all he takes is the morning paper. We do not begrudge that service, and do not say that he should pay 6d. The service is the same in the village as in the town.
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If we could have this kind of unification, or nationalisation, or national ownership, there would be such an impetus given to the electricity industry that we should be able to have the various things of which I originally spoke, which would be amenities in the home and would lift the standard of life of our people. We could have them in such increasing quantities that we could establish light industries in the depressed areas.
Take one instance. If electricity had been cheap enough, every little working-class home that is being built by councils; and private enterprise could have had a permanent refrigerator installed, which would have preserved food and would have been a valuable contribution to our health services. Instead, in all those little homes the milk one gets in the morning has turned by night. Electricity is the power responsible for providing the current to wireless sets. If we can control what we want the people to hear and, by television, what we want them. to see, surely the power that enables the people to hear and see in this way ought to belong to the people.
4.31 p.m.
Mr. RIDLEY: I beg to second the Motion.
There will be common agreement that it is an important problem with which we have to deal, and I make this assertion and assumption that one of the most interesting economic and political phenomena in the world to-day is, that public ownership is being applied in practice by people who profess not to believe in it in principle, because it is the only solution of the problem which immediately confronts us. My purpose in following the excellent speech of my hon. Friend is to show that whatever hon. Members opposite profess to believe, they must, in order to find an adequate, satisfactory and permanent solution of this chaotic problem of electricity generation and distribution, apply to it the principle of public ownership. If an element of humour is to be found in this Debate, it is that some hon. Members opposite who pride themselves on the belief in private enterprise and in the fine qualities of individualism, have themselves, in the terms of their Amendment, a little timidly and hesitantly, crawled to the penitent form. Even the McGowan Report very timidly and tepidly says that

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public ownership is ultimately the only solution for the chaotic problem with which we are concerned this afternoon.
When the House was discussing the Opposition Amendment to the Address, the Home Secretary said that he had no particular desire to live in a Socialist commonwealth, but he was disposed to consider whether there was an argument for applying public ownership to industries to which the principles of public ownership had not been applied. I am sorry that the right hon. Gentleman is not in his place in order that he might he persuaded to our point of view in this connection. The situation with which the Motion deals may be regarded as a triumph of historic Liberalism; as the sort of triumph which hon. Members below the Gangway spend their political time in attempting to repair and repudiate. In the words of one writer:
"The present chaotic situation arises out of the widely accepted view that a system of competitive private enterprise without monopoly results in the best service to the public."
In other words, it has resulted in unrestrained laissez faire. It has not resulted in the best service to the public, and successive Committees of this House and successive Ministers have constantly considered how the industry can be rescued from its present chaos. Each successive Committee appointed has, without exception, including the McGowan Committee, seen that public ownership is the ultimate solution. The real difference, therefore, between the Motion and the Amendment is the difference of time. There has been an unhealthy delay and procrastination which has been largely responsible for creating the present chaotic position.
The report of the Williamson Committee, which was translated into the terms of a Bill in 1919, suffered a most unfortunate fate, because it received the attention of hon. Members like those who are supporting the Amendment to-day. The recommendations of the Williamson Committee, had they been translated into the terms of an Act of Parliament, would have given in regional areas generation and distribution under public ownership and public control. The Bill left this House for another place almost in the condition in which it was presented to the House, but, in the language of the
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McGowan Report, the Bill was emasculated in another place. I remember the Lord President of the Council, in a moment of prescient sagacity several years ago, saying that whoever was in office in the House of Commons, the Tory party was in power elsewhere. The Bill came back to the House of Commons from the other place stripped of all its authoritative and compulsory powers. It authorised the appointment of Electricity Commissioners with nothing more than persuasive authority to attempt to do a job which needed for its purposes compulsory authority The commission did not succeed in its job, and the Weir Committee, therefore, had to be appointed in order to find a new way out of what had become an intolerable situation, but there was delay which ate away six or seven very valuable years.
The Act of 1926 created the Central Electricity Board. It has always been a little amusing to me to reflect that the Central Electricity Board was the biggest extension of public control in British politics that British political life had so far seen. It was piloted to the Statute Book by a Minister of Transport who was at the same moment the President of the Anti-Socialist Union. The Central Electricity Board has made a great step forward in the control, organisation and generation of electricity, but it has only been able to achieve the result that is now to its credit because it has been able to co-ordinate the generation of electricity with compulsory powers, and because over a very wide area, with public credit behind it, it has been able to spend for the time being public money to the tune of £18,500,000 in order to standardise generating frequency. The Act which created the Central Electricity Board, an accomplishment of which I have no doubt hon. Members opposite are proud, suffered the same opposition in this House from exactly the same quarter that is opposing the Motion to-day. If hon. Members opposite would care in an idle moment of a busy life to spend half an hour in running through the OFFICIAL REPORT of those debates, they would find that the Bill found its way to the Statute Book against opposition from the Government side because of the support it received from this side of the House. Therefore, the pride of hon. Members opposite in the appointment of the Central

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Electricity Board is a tardy pride, and they need not be too proud about it.
The Central Electricity Board, not possessed of that sort of public ownership power that would have given it complete authority over generating stations, such as nationalisation would give it, has been completely unable to deal with the other very important side of the industry—the distributive side. The distributive side to-day presents a situation of such appalling chaos that ever, the Amendment indicates a desire to do something in regard to it. There are between 600 and 700 entirely unrelated, non-co-ordinated distributing authorities. There are some using one type of current, some using another and others using both. There is a variety of policies which add themselves to what would otherwise be a state of chaotic confusion, and there is a wide variety of policies through public authorities or private companies in the matter of assistance to would-be electricity customers. There is just as wide a variety in the matter of tariffs and prices as was the case with frequencies, and is still the case with voltages.
I live in a London borough which is curiously divided. It is one of those boroughs that has had its boundaries flung wide by suburbanisation in the last seven years. I refer to the borough of Ealing. Part of the old borough is supplied by a public authority, the Ealing Borough Council. The other part—the extended part—is supplied by the Metropolitan Electric Supply Company. In Ealing the local authority are charging 3½d. a unit while the outside area covered by the Metropolitan Electric Supply Company has to pay 4d. or 5d. per unit. If we take the general tariff standard, the price variation is still substantially in favour of the local authority. Taking a typical £20 rated house consuming 2,400 units of electricity per year the local authority's total charge for that consumption would be £7 12s. ld., while the Electric Supply Company's charge would be £10 16s.
Unification of the industry on the distributive side would give us a number of things. It would give us order in the place of chaos. It would give us standardisation of voltage. Voltages will not standardise themselves if they are left to do the job themselves. We get to-day a continual extension of non-standardised
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voltages, and as long as the House delays a radical solution of the problem, and the more it procrastinates, the worse the problem becomes, because of the continued extension of non-standardised voltages. The standardisation of voltages would result in the standardisation of equipment, the standardisation of bulbs, fires, wireless sets, cleaning apparatus, and every other kind of appliance that can be harnessed to electric power. It would simplify tariffs and prices not only in the sense that it would make them one but, in a much more important sense, that it would make them easily understandable from the point of view of the ordinary householder. It would enable us, on the basis of the best practice, to standardise the kind of assistance now provided by the best sort of public authority for wiring non-wired houses and to facilitate the acquirement on the instalment plan of the sort of appliances that the householder desires to use.
We are, or we can be, at the beginning of a tremendous development in the use of electrical power not only for industrial and productive purposes. I agree with my hon. Friend that electricity can be the handmaiden of our working women. I take some pride in the fact that I am a thoroughly domesticated animal. I enjoy using an iron in my home, but I only enjoy it because it is an electric iron. If I had to use, as many of our women friends have to use on a hot July day, the old fashioned flat-iron, with a roaring coal fire snaking things horribly uncomfortable I should take no delight in the process. It is ironical that hon. Members opposite—[Interruption]—well let me say a curious thing—who can afford domestic assistance in their establishments are also able to provide them with all these modern appliances, while the wives of our working people who cannot have the advantage of domestic assistance are also deprived of the advantage of this handmaiden which might rescue them from eighteenth century drudgery. In ironing, cooking, cleaning, washing, and heating, electricity, reduced to a price which our people can afford to pay, would be the handmaiden of the working woman.
Let me put before the House one or two considerations in regard to public ownership and control. In the first place, public ownership would enable us to have

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in terms of electrical development long-term expansions. I submit that you cannot have in this developing service long-term expansions within private enterprise. In the nature of things private enterprise—I do not say this in criticism of it—must have its 5 per cent. next year for its primary investments. Hon. Member opposite know that you cannot raise money on the Stock Exchange for any industrial development purpose unless you can promise a return on the money at the end of the first financial year. A public authority is in a different position. It can afford to have a time-lag on its investments and, therefore, you can only have a long-term expansion in the matter of electrical development under public ownership and control, because of the inherent financial restrictions from which private enterprise inevitably and historically suffers.
The advantages of a long term expansion can be summarised in this way. The larger the area of the authority the more it can afford to engage specialists, publicity experts, and special general staff, which will assist the popularisation of this great and growing industry. The larger the area of unification, the more you spread your load of electrical consumption, the more you keep your plant working all round the clock, reduce your overhead charges and thus have the possibility of cheaper electricity. Unification under public control will enable us for the first time to have some sort of planning for relatively larger areas. I see no reason why a public authority owning electrical power should not be able to encourage industries on some specially considered terms, and develop them in the distressed areas. I agree most cordially with my hon. Friend that the prosperity of this industry should help to throw some ray of sunshine into the darkened lives of those who win for it its raw material. It is a shocking thing that the men who go down into the bowels of the earth and win the raw material for this great industry should suffer poverty and privation, and that the immediate conversion of coal to electricity and gas, and other by-products, however profitable it may be, still leaves this uncomfortable fact, that no shadow of that prosperity finds its way into the life of the miner. I contend that it is desirable not only to unify this great
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industry under public control but to bring it more closely into relation with the industry which provides its raw material, and thus spread its prosperity in order to relieve those in distress.
There are two desirable things about public ownership and control. Private enterprise has never displayed the enterprise which private enterprise thinks it does display. In 1900 354 electricity licences were issued, of which only 164 were issued to private companies. The obvious fact is that private enterprise waited to see whether the market was good, but when the market had been made good, when public authorities had pioneered and blazed the trial, private companies came in and tried to skim the cream off the milk. Private enterprise is really not enterprising at all. I suggest that public ownership and control in terms of electricity produces electricity at a lower cost than private enterprise. I call as evidence Sir John Snell, chairman of the Electricity Commissioners, who in giving evidence before the Coal Commission in 1925 said:
"If you ask me whether local authorities' costs compare with the distributive companies costs, the answer is 'yes.' Local authorities' costs are markedly lower."
Obviously then prices are also lower. If you turn to the report of the London Joint Electricity Authority you will find in their Statistical Review, No. 9, for 1936, some interesting facts. In 1934–35 for the provision of lighting, heating and cooking the Metropolitan borough councils sold at an average of 1.76d., the London companies in the same year sold at 2.32d., the extra London local authorities sold at an average of 1.80d. and the extra London companies sold at an average of 2.29d. If hon. Members will turn to the McGowan Report they will find, on page 94, that 60 per cent. of the local authorities sold for lighting, heating and cooking at less than 3d. and only 19 per cent. of the private companies. Forty-two per cent. of public undertakings sold electricity for power at under 1d., and 20 per cent. of the private companies. Private companies' costs are higher and their charges are higher than those of public authorities. I have no doubt that hon. Members opposite know more about Stock Exchange prices than I do and will be able to translate these higher costs and higher prices into Stock Exchange figures.

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I suggest that the case for unification under public ownership and control is complete and conclusive. I do not want to be impertinent, but I think I must warn hon. Members opposite not to be too sanguine as to the popularity of the McGowan Report. From responsible documents already in the possession of hon. Members it is quite clear that local authorities are not going to have the report, for two very different reasons. In the first place, local authorities object to the possibility indicated by the report of their undertakings being transferred to private enterprise. There is some pride in local authorities and they object to the transfer of publicly owned undertakings which they have built up to private companies. They also object very seriously to the differentiation in terms of compensation between the proposals to be applied to a public authority undertaking acquired by a private enterprise and the proposals to be applied to a private company when acquired by a public authority. Whatever half-hearted Bill the Government might produce on the basis of that report there will be no satisfactory solution of this growing problem except on the basis of complete public ownership and control.
4.58 p.m.
Mr. H. G. WILLIAMS: I beg to move, in line 1, to leave out from "House" to the end of the Question, and to add instead thereof:
"believes that the best basis for the reform of electrical distribution is contained in the report of the committee on this subject, and expresses the hope that, as soon as Parliamentary time is available, the Government will introduce a Bill based on this report."
I understand that the hon. Member for Clay Cross (Mr. Ridley) has on a previous occasion addressed the House; otherwise I should have been delighted to have congratulated him on the clearness with which he has stated his case. Having indulged in that polite comment may I proceed to a measure of criticism? The hon. Member is privileged to live in the attractive suburb of Ealing, not very far from where I live, and he has told us that one part of Ealing is lit by the municipality and another part by private enterprise. He led the House to believe that it was much more uneconomic to buy the juice from the private company than from the municipality. Not being an electrical engineer himself
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the hon. Member may not know that they generally call it juice. I find that in Ealing the price for heating and cooking and lighting, as far as the municipal undertaking is concerned, for the year ended 31st March, 1935, was 2.47d. The hon. Member selected this example himself.
In the report of the Electricity Commissioners, on page 560, are some particulars of the activities of the Metropolitan Company, which is, I think, the company the hon. Member mentioned, and which supplies the areas of Acton, Greenford, Hanwell, Paddington and certain other districts. I think Hanwell was the district which the hon. Member had in mind, celebrated as the area of a big asylum. In Hanwell you can do rather better. The amount is 2.15d. as against 2.47d. charged by the municipality. In the whole area of the district supplied by the Metropolitan Company their average revenue per unit is 2.27d. The hon. Member quoted a set sum of about 3½d. a unit. I imagine he was comparing certain scales of charge, and there is a great variety of scales of charge which give consumers—
Mr. RIDLEY: I was comparing my own experience with that of friends who live in another part of the same district. I live in a house which is wired for lighting and I pay 3½d. a unit for electricity, whereas friends of mine who live outside the area catered for by the local authority, and whose houses are similarly wired, pay 5d. a unit.
Mr. WILLIAMS: That may be so. We are not considering what is the maximum charge somebody may pay if he does not know his own business, but the charge at which he can buy electricity if he knows his own business. Nearly all wise people take the two-part tariff, which is a fixed charge and a small unit charge. I have not the slightest idea of what amount per unit I would pay on the flat rate, but I pay a fixed annual charge and a small rate per unit. In the case selected by the hon. Member, one can, in fact, buy current more cheaply on the average from the company than from the muncipality. The hon. Member for Morpeth (Mr. R. J. Taylor), in moving the Motion, very carefully avoided reference to his own constituency, which is supplied by a company. The hon. Member hinted that I had some con-

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nection with the industry. It is not as close as I would like it to be, for the industry is moderately prosperous. I rather gathered that the hon. Member considered that connection not quite proper, although he later indicated that he had some connection with coal mining, his chief object being to sell coal at as high a price as possible to the electricity supply industry with which I am connected. The less hon. Members opposite talk about interests the better, for the Labour party is one gigantic organisation of vested interests. Hon. Members opposite come here to repreesnt the trade unions, they grind the trade union axe, and they do it rather well; but they must not be high-minded on the subject.
The hon. Member for Morpeth was curiously reluctant to discuss his own constituency, which is rather well treated from the point of view of electricity. One of the most efficient companies in the world operates in the hon. Member's constituency. The constituency is a rather scattered one, but 72 per cent. of the houses in it are connected up. That is not bad. Every village, with the exception of one tiny hamlet, is connected up by a most progressive private company. Therefore, I am not in the least surprised that the cases which the hon. Member selected did not conic from his own area, and that he went to a place of which he did not know so much. He mentioned a mysterious local authority in Durham—he did not say which one—which asked for a quotation from the same company as supplies his own constituency, and he said the company wanted to charge 4d. a unit. I do not think that is the full story, and I would like to have a, full account of that transaction, because it may be that that was the charge on the flat rate, but that an alternative was given.
Mr. R. J. TAYLOR: Is the hon. Member suggesting that there is a two-part tariff where I live in my constituency?
Mr. WILLIAMS: I do not know where the hon. Member lives in his constituency, but I am certainly suggesting that there is a two-part tariff in his constituency.
Mr. TAYLOR: May I point out to the hon. Member that one of the charges we
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made and one of the charges in the McGowan report is that the two-part tariff is not brought sufficiently to the notice of the people. I have not heard of a two-part tariff in my constituency.
Mr. WILLIAMS: The hon. Member wants to know whether there is a two-part tariff in his constituency. There is a two-part tariff of a very interesting character, and perhaps the hon. Member will pass on the news. It is a two-part tariff graduated according to the size of the house—from four rooms to 15 or more—and between summer and winter. It has not the normal appearance of a two-part tariff because the proposal is to sell the first few units at a relatively high charge of 4½d.; the next units at 3d.; the next at 1d. and the remainder at five-eighths of a penny. That has the same result as is sometimes achieved by asking one to pay a substantial sum, whether or not one uses any current. It is merely another method of arriving at what is known as a two-part tariff. Does the hon. Member still suggest that there is not a two-part tariff in operation in his constituency? I gather that the hon. Member is now satisfied, and that his interruption was based on a misunderstanding of the situation.
Mr. KELLY: He has not said he is satisfied.
Mr. WILLIAMS: He has not said anything. Apparently the hon. Member would like to see all electricity generated in the coalfields, but one of the troubles about generating electricity is that far more water is needed than coal. The problem of condensing is a much more serious problem than that of fuel supplies. In a great many cases it is, in fact, dearer to send electricity along a wire than to send coal in a truck on a railway. Electricity does not travel for nothing along a wire; it dissipates part of itself in unnecessary warming up of the wire. There are a number of factors of that sort which would not be in the briefs supplied from Eccleston Square—or do they come from Transport House? I gather that the hon. Member's friends are not too sympathetic towards the idea of building power stations in the coalfield. A well-known London borough, Fulham, which is controlled at the moment by a Socialist majority, has put up a very large power station, which is

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sure to be one of the objects of the next air raid, for it is one of the great features of the River Thamse. The borough of Fulham has not put up this enormous power station in Durham or Morpeth, but in Fulham. The Socialists in Fulham do not agree with the Socialists in Morpeth, and they say that if they have a power station they will build it in their own borough, and buy coal and fetch it by water.
Mr. RIDLEY: How could Fulham have put up a power station in Morpeth?
Mr. WILLIAMS: The Socialists in Fulham, in association with fellow conspirators in other Socialist constituencies, might have arranged it. In fact, nobody suggested that they should do it in Morpeth. Such talk as that of the hon. Member for Morpeth is plain nonsense, and why should we not say it is nonsense?
Mr. T. WILLIAMS: Surely the hon. Member is now talking plain nonsense. He knows that the Fulham power station has been erected within the existing chaotic society, and not in a nationally controlled and nationally organised society.
Mr. H. G. WILLIAMS: Why, if you think something is chaotic, should you make it more chaotic? After all, why build a station at all? Why not get the electricity from the grid? Surely it is plain nonsense. It only deceives great masses of people in the distressed areas when they are told that it is an economic proposition to do as the hon. Member suggested, and one thing we ought not to do is to deceive people who live in the distressed areas. A general attack was made on private enterprise because profits are earned by it. Under the existing system, even if it were nationalised, interest would still be paid on the money, unless it is proposed to abolish interest—I am not clear whether that is the proposal. Neither the Mover nor the Seconder indicated whether there is involved the proposition that interest would no longer be paid on the money.
Mr. RIDLEY: Of course that is not the proposition.
Mr. WILLIAMS: Interest is to be paid. Therefore, all we have to consider is the difference between the rates of interest that may be paid. The proposal is that the industry should still be run with
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capitalist capital. Is that right? Even this nationalised enterprise would be run with capitalist money. The curious thing is that even if there were no rate of interest on money, no capital interest to be paid, the capital charges would be hardly different. Whether interest was paid or not would make little difference to the electricity supply industry. Its capital charges consist fundamentally in the replacement of the capital that has been put into it. The industry is dominated by the vast amount of capital that is necessary. Capital charges, such as buildings, plant, overhead cables and so on, dominate the situation, and they would hardly be affected if private ownership were completely abolished in this country. Therefore, hon. Members are again only deceiving the public if they pretend that profits make very much difference in any event, assuming an equal efficiency, to the ultimate costs of electricity.
The Motion is, I presume, a proposal for a reform. There would be two justifications for a reform. One would be that the existing scheme was so bad that any change was worth trying, and the other would be that the reform proposed could be proved to be better than the existing scheme. Does any hon. Member say that the situation of the electricity supply industry is so bad that any change is justifiable? Does any hon. Member deny that the electricity supply industry has made more progress during the last 15 years than any other industry in this country? Is that denied by the hon. Members who moved and seconded the Motion. Is there any industry which has increased its number of customers more rapidly? Is there any industry which, going back to 1882, has been more hampered by legislation? I would like to give the House one or two figures. The number of units sold last year was three times as great as the number sold ten years ago. I think any long-established business that has trebled it output during the last ten years has achieved very remarkable results. What has happened in the case of prices The average price charged for electricity during the last ten years has been reduced by one-half and the number of consumers is four times as great. That is very remarkable for an industry which the seconder of the Motion constantly described as chaotic. He wanted reorganisation, co-

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ordination and all the other words that end with "ation". Supposing hon. Members co-ordinated to their heart's content—would what is being done in Morpeth really make much difference to a man living at Clay Cross?
Mr. RIDLEY: I am not accustomed to the practice of the House, but does the hon. Member expect me to reply to all the questions he is asking me? If he likes, I will give him answers, but he has no right to ask questions to which I shall have no opportunity of replying.
Mr. WILLIAMS: I should be only too willing to give way when necessary.
Mr. HERBERT MORRISON: They are rhetorical questions.
Mr. WILLIAMS: The right hon. Gentleman the Member for South Hackney (Mr. H. Morrison), who has not had as much experience in this House as I have, knows that questions are often not rhetorical. They are sometimes asked on the other side of the House in the hope that the hon. Member to whom they are addressed will not seek to reply.
Mr. MORRISON: The hon. Member must not think that I was attacking him. I was only trying to interpret the spirit, of the hon. Gentleman to my hon. Friend in order to help him to understand what is going on.
Mr. WILLIAMS: I am not concerned with what the right hon. Gentleman was thinking. The industry has suffered from a variety of disabilities, many of them explained in the Report of the McGowan Committee. The 1882 Act discouraged private enterprise because it gave such short franchise that many people were unwilling to take the risk. The hon. Member who seconded the Motion hinted that all the pioneers were municipalities, but he is quite wrong. The pioneers in electricity supply in this country were private individuals and not municipalities. The first private individual started his business only three-quarters of a mile from this House; it was the late Mr. Gatti, who started the first electricity supply undertaken in the world. Those people had great difficulties which hindered them. The hon. Member who seconded the Motion suggested that there are too many voltages and that if we had only had a national supply every-
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thing would have been all right. Supposing we had started off with the unification of voltages, what would have been the position to-day? I imagine that every undertaking would have had as a basis 100 volts, and it would have been necessary to scrap the whole lot.
Does anybody to-day know what is the right voltage? I do not and nobody else does, but striking the balance of advantages the industry is settling down to a voltage of 230 volts alternating current with a frequency of 50 cycles per second. Considering the position a few years ago and having regard to the then existing development of apparatus and the means of insulating cables; taking into consideration the safety of human life and all other factors, and the fact that those responsible were proceeding only on a basis of rough justice and without any ultimate theoretical considerations to guide them, is it anybody's fault that there was a large number of voltages? Nearly all the original voltages have had to be changed because they were found to be too low. I am not saying that there is anything theoretically perfect about the voltage which I have just indicated but I am glad to say, from the point of view of the standardisation of apparatus, that about 75 per cent. of the people of this country are drawing their supplies on that voltage at the present time. There is still a variety of other voltages but they affect only a small minority of the population.
Let us draw a contrast between the electricity supply which we are now considering and another electrical service. We have in this country a nationalised electrical service which distributes from a central station by wires to people's houses. We call it the telephone service and it has been completely nationalised since 1912. Presumably there is none of that chaos in the telephone service to which the Seconder of the Resolution referred. It has been under one authority for the whole of the United Kingdom since 1912. The figures which I am about to quote relate to 1913, the first year after it was nationalised and they are convenient because they happen to be in the current number of the Statistical Abstract for the United Kingdom. The average revenue for each telephone call in 1913 was about 2d., that is for local calls, taking the standing charge and the charge for each call. The average charge

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to-day is about 4d. These figures are approximate but, speaking generally, the charge to-day is about double what it was in 1913. Take the other industry which hon. Members opposite are condemning, when they talk about the anarchy of competition and all the rest of it. I am now going back to the days when I was an apprentice in an electrical engineering works, just before the metallic filament lamp came into use. Taking into account the improvement in apparatus and the reduced charges for electrical energy, I could light this Chamber to-day for one-fiftieth of what it would have cost in those days, 30 years ago.
It is rather startling but it is the case that the cost of the telephone has doubled while the cost of illumination is only one-fiftieth of what is was 30 years ago. Talk of anarchy. Is there any political party or any industry or any enterprise at all which can point to results so amazing? I have made an estimate of what it would cost to light this Chamber at the moment. I think we pay ¾d per unit to the Westminster Electric Supply Company after paying the standing charge. If we pay more, the First Commissioner of Works must be incompetent and I do not think that he is. There is also a standing charge for the telephone. There is a standing charge in both cases but in the case of the telephone it is so oppressively high that no working man in this country has a telephone.
Mr. EDE: I have.
Mr. WILLIAMS: I do not regard the hon. Member as a working man. He is mere adequately described as chairman of the Surrey County Council and a very good chairman he is, I am glad to say, of that very conservative body. The cost of lighting this Chamber, from a rough calculation which I have made, for 12 minutes, is the same as the cost of a local telephone call which lasts six minutes. It is twice as expensive to have local telephone calls as to light this Chamber. What has happened then in regard to the number of consumers? The number of consumers of electricity is increasing six times as rapidly as the number of people who are being connected with the telephone. The number of new consumers of electricity in the last 3½ years is equal to the total number of people who are
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linked up with the telephone. One is nationally managed and the price is double what it was a generation ago, whereas in the case of the other, the price—where you use the supply efficiently—has been reduced to the extent just indicated. I am not talking about the person who uses a tiny quantity and pays a flat rate. Electricity differs from almost everything else in that production and consumption take place simultaneously. There is no storage. If a person wants to turn on the light for one hour out of the 24, he has to bear the same capital charge as the person who has it on all round the clock.
I have tried to work out the cost in the case of my own house and to compare it with what a consumer would pay in Morpeth. I have a standing charge based on the number of rooms in the house and then a charge of ½d. per unit. In Morpeth they have a more elaborate and apparently more complicated system than in Putney. I am under a company and the hon. Member opposite is under a company. I find that on the same number of units for lighting, in a house of approximately the same size, the charge in Morpeth is approximately the same as that in Putney. I am content with what I pay and as the hon. Member has not grumbled about what he pays, we may take it that there are at least two companies who are satisfying their customers, and I do not own any shares in either of them.
As regards the system of charging, which is a matter of great importance—on account of these capital charges which run all round the clock and all the year round, the right system is to have a charge, first, based on the maximum demand likely to take place, and secondly, a subsidiary charge based on actual consumption. That may be expressed in many ways. You might have a machine which would register the maximum demand in any period of the year. That is not a very convenient arrangement in the case of domestic consumption, though it may be a good arrangement for factories and cinemas and large shops and so forth. For the domestic consumer, the fixed charge is sometimes based on the number of rooms and sometimes on the floor area of the assessable rooms and in other cases on the rateable value. None of these methods is theoretically perfect.

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They are all indirect attempts to discover what is likely to be the maximum demand of the consumer.
I notice that the McGowan Report plumps for rateable valuation. The justification for that is that it is already used for water rates, police rates, street lighting charges and other municipal service charges. It is a measure of rough justice and it is a system which is convenient. Under it some people may pay more than they ought to pay and others less, but no system is perfect. Incidentally a good deal of the stuff which is talked both in the industry and outside it about chaos in the system of charging is not of much importance. All a person is concerned with is the charge made by his own undertaking. It does not worry a man in Putney to know that in Morpeth they have a more complicated system of establishing their two-part tariff than we have here. What the supplying authority has to do is to offer its service on such terms as will make it as easy as possible for people of moderate means to take advantage of it and for that reason, according to the different needs of different districts, there may be a strong case for different systems of charges. The idea that you can have a simple plain uniformity is based on no theoretical consideration of any kind.
I have said little, so far, about my Amendment and I will deal with it briefly. I do not commit myself to blind support of everything in the McGowan report. That would be stupid. But three very competent gentlemen have prepared in that report a very interesting document and they are entitled to the gratitude of the House and the country for the ability with which they have stated the case. They make certain recommendations, some of which are purely technical but they make one big recommendation which is simple. They say that it is absurd to distribute electricity on the basis of boundaries which have been drawn purely for political or municipal purposes. The boundary for electrical purposes, they say ought to be drawn on technical considerations which have nothing to do with politics. Those boundaries may not be theoretically perfect but anyone who studies the map will see at once that a particular
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undertaking should not extend beyond a certain point because of some obvious physical barrier, while you do not want to have too great a divorce between the consumer and the undertaking.
In other words, the case against undertakings being too large is very strong. Those directing an enterprise ought to be familiar with the greater part of the district over which it operates. One finds that the leading men in the supply industry to-day are men who have intimate knowledge of their own districts. Much of the success of their undertakings will be found to arise from the fact that they and their staffs are intimately acquainted with the district in which they are working. On the other hand, the undertakings must not be too small. If you want to give fair terms to the whole of the population you must have a reasonable diversity in the load factor, that is to say, the domestic load, the power load, the rural load and so forth ought to be well mixed up together. If you completely divorce the countryside from the towns in this matter, the countryside, or some parts of it, will have to wait a long time for a supply. You want to secure the maximum utilisation of your plant, whether the plant for generation or the plant for distribution, and for that purpose you require areas of substantial size so drawn that they incorporate a good mixed load.
I hope that we are not going to approach this question on grounds of political prejudice—on the ground that we are in favour of or opposed to nationalisation on municipal trading. The true approach should be on the ground that we want whatever will produce the best results. I think everybody is convinced that there must be a measure of consolidation and that a large number of undertakings are too small to be efficient. On the other hand, it would be easy to have organisations which were too big. The moment you accept the conclusion that there are organisations which are too small and that you are going to apply a measure of coercion, which none of us like, you will have resistance. You will have the resistance of the personal pride of those who have built up these undertakings, of the chairmen of electricity undertakings in municipalities, of the borough electric engineers, and of the boards of directors of companies. I

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am not now considering the terms of purchase and I think the recommendations of the report will call for modification but if you adopt the central idea of the report you are going to see municipal undertakings buying up other municipal undertakings and buying up companies and you are going to see companies buying up other companies and buying up municipal undertakings. You have to accept existing facts; you have to accept that there is in this country a large number of undertakings of substantial size and of very high efficiency which you have to use as the basis for your development, and to deny that fact for purely theoretical considerations seems to me very unwise.
My Amendment is not an unqualified approval of every suggestion in the McGowan Report—that would be stupid—but their central idea seems to me thoroughly sound. It is the idea that you have an existing situation which is the best basis on which to build up a better situation, and, for the comfort of those who think that ultimately it should be under some form of popular control, it is suggested that in 50 years' time, or thereabouts, the whole situation should once again be reviewed. In the meantime it is much more important that we should have a rapid extension of electricity supply throughout the country, though that extension has been amazing already, and 750,000 new connections in a year is not bad going, but it wants accelerating, particularly in the rural districts. You want to give the housewife opportunities that she is apparently denied, though a housewife who has not got an electric iron to-day does not require a Socialist majority in this House to supply it. You can to-day buy an electric iron for 4s. 11d., and if the hon. Gentleman's relatives and dependants have not discovered that, and he will consult with me, I will explain how he can get an electric iron with the greatest comfort and relatively on the cheap. They have it at Hanwell on terms which are most economical. You can iron in Hanwell for a long, long time for a penny, and indeed I can visualise some of the ladies in that part never stopping ironing, it is so cheap.
Seriously, however, I ask this House not to endorse the original Motion merely on the ground that the hon. Member has had some difficulty in
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persuading ladies of his acquaintance to make adequate use of the bountiful facilities provided. There are very few now who are denied this great opportunity which he described with such lucidity and eloquence. He is not the only hon. Member in this House who has used an electric iron. Many years ago I used one, and I think I own four electric irons at the moment. I do not use them all myself, but it is useful to have more than one in a house, because periodically they fuse. I hope this House will not socialise the electric lighting industry of this country merely because of the personal difficulties of the hon. Member for Clay Cross in regard to the heating of the irons of his relatives. I think there are more substantial reasons why we should confirm in power those who have achieved the most amazing results in the last 10 or 15 years. Why the industry should be criticised in the way it is amazes me, because in the last 10 or 15 years it has achieved results which no other industry in this country can show. For these reasons, and for a great many others which I must leave time for other lion. Members to advance, I move the Amendment.
5.24 p.m.
Sir ARNOLD GRIDLEY: I beg to second the Amendment.
I cannot deal with this question with the same forcefulness as my hon. Friend the Member for South Croydon (Mr. H. G. Williams), who has just sat down, but I should like to put myself in proper location with the House. I have been associated with this industry for something like 35 years, and I well remember the bitter struggle of the early days which the pioneers had to face. I was a little surprised that the Mover of the Motion seemed utterly oblivious of the fact that for the first 16 or 18 years of the early development period of this business the shareholders in many of the undertakings had no return on their capital whatsoever, and it was not until the War gave a tremendous impetus to the growth of our industry that struggling undertakings were at last put on their feet; and they have never looked back. I want to bring the House back to the Motion on the Paper, because I think we have hardly touched upon it since the Debate opened. It says:

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"That this House, believing that the national ownership and control of the electricity supply industry is an essential step in a programme of nationally-planned economic development."
Why is it an essential step? Is electricity supply not available to-day in 90 per cent. of Great Britain? If not, we cannot believe the official report that has been put before us. Nor can we claim for a moment that industry in any part of the country is handicapped because it has not available a cheap supply, not only for domestic but for industrial purposes. Even in Jarrow, to which Members in all parts of the House are desirous of seeing new industries attracted, there is no handicap in regard to electricity supply, for Jarrow is part of the area served by the great company a part of whose area the hon. Member for Morpeth (Mr. R. J. Taylor) inhabits. It is between mid-Northumberland, where the hon. Member resides, and Jarrow, in the lower county of Durham. In Jarrow you can get a supply as cheaply as you can in any other part of the highly industrialised Tyneside area. The same applies to South Wales. I should be surprised if any hon. Member who sits for any constituency in the South Wales industrial area could point to any district there in which there is not, not only an adequate, but a cheap supply available for industrial purposes. Therefore, I ask the House to agree with me in saying that there are no grounds whatsoever for asking this House to believe that the national ownership of electricity supply is an essential step for economic planning.
Mr. KELLY: Does the hon. Member apply that remark to the South-West of the country?
Sir A. GRIDLEY: No, I do not call the South-West an industrial area. Now I come to my second point, and I note that nationalisation is to apply both to generation and to distribution. Speaking as one who has had a long and close association with the industry, I should be surprised to find anyone who could suggest how the generation of electricity in this country could possibly be improved upon. There are now a few very economical and very large power stations located where they ought to be, where there are ample supplies of condensing water, and the connection of these stations with the great transmission grid
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has enabled these further economies in generation, namely that wherever water power in this country or in Scotland exists, it is being made full use of, and not only water power, but the waste heat that used to be discharged uselessly into the air from coke ovens, blowing engines, and such like. These waste forms of energy are now harnessed in comparatively small but nevertheless efficient stations, and they are all linked up with the great transmission grid. Therefore, how it is possible by nationalisation to improve upon what I consider is as perfect a generating system as one could possibly have in this country, I fail to understand.
When you come to the distribution part of the Motion, I agree that you are on firmer ground. I am prepared to admit that, great as is the performance of this industry and those associated with it as a whole, we do not claim that the organisation throughout the country can be called perfect in any way. There is room for reforms to be made, but that is not what we are discussing this evening. This Motion suggests that we should either nationalise the industry or that we should not, and I do not think the Mover or the Seconder of the Motion made any case whatsoever for the nationalisation either of generation or of distribution itself. I would like to put to those hon. Members opposite who support the Motion these questions: Would you nationalise the electricity supply of the country and leave the great gas industry to go on as it is? Can you point to any other public service that has been nationalised or put under any form of national ownership which has not been monopolistic?
Those of us who day by day are concerned with the administration and development of electricity supply undertakings know full well that at this moment we are experiencing competition from the gas industry more fierce—I will not say more unscrupulous, but certainly much more vigorous and active—than we have experienced for many years past. It is the activity, possibly, of a dying industry, although that was said 40 years ago, and gas seems to be as vigorous to-day as, if not more vigorous than, it was when we used it to a far greater extent than we do now in our houses. Would you leave that active, vigorous, competitive industry to compete with a nationalised electricity

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supply? I very much doubt it. We have the analogy of what happened in Canada with one great railway system publicly owned and the other under private ownership and management. Neither of these systems pays and probably neither will, until in some form or other non-competitive combination is brought about.
Mr. KELLY: We would do better than that.
Sir A. GRIDLEY: Very likely, but would you like to buy up and put under national control the London and North Eastern Railway system and leave the London Midland and Scottish Railway to go on competing with it for the traffic between London and Glasgow? One has only to put out these parallels to convince Members opposite of the foolishness of the suggestion to nationalise the electrical industry while leaving the vigorous gas industry to fight against it. From whom comes the demand for the nationalisation of this industry? Does it come from the consumers, that is, the public? If so, what overwhelming volume of evidence is there that there is a demand for the nationalisation of this service? Does it come from the employé? In what industry are the employés paid better than in the electrical industry, which because they are so well off, is rightly looked upon as one of the sheltered industries? There is no demand for nationalisation or change in the form of their employers from the employés. Does it come from the great municipalities? I think that question has been answered from the opposite benches today. There will be a great deal of opposition from the municipal undertakings before we get through whatever proposals may be laid before the House by the Government based upon the McGowan Report.
We on this side consider that the Motion is premature because of the fact that there is this report, which is the work of a committee set up by the Government, and which has, no doubt, already received a good deal of consideration, but the views of the Government have yet to be expressed to the House. The Motion shows almost a lack of courtesy, certainly a lack of patience—which may be justified—with the Government because they have not yet disclosed how they propose to interpret the recommendations of the McGowan Committee.
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I want to make it clear that in the Amendment I underline emphatically my view that the report is a basis, and only a basis, upon which the reform of electricity distribution should be carried out. We must, I suggest, wait until we see what lines this proposed new legislation will take, and although I accept my share of responsibility for the Amendment, I fully expect that when I see the shape which new legislation will take I may share with Members opposite grounds for opposing it not dissimilar from theirs.
This is not an urgent matter for my hon. Friend has already told us what an enormous advance has been made by this industry in recent years, and I would like to add one or two figures to those with which he astonished the House. In 1935 we installed in this country more electric cookers than were installed by every other country in Europe. That does not sound as if gas competition had very much stood in the way of electrical expansion, but it proves that electricity is, in an enormous number of homes, available at a price which justifies its use for cooking purposes. So great is the present demand for increased supplies of electricity that there is under construction in the workshops of this country, authorised by the Electricity Commissioners, something like 2,000,000 horse-power of electrical generating plant. These being the facts and performances of the men who have directed and engineered our great electrical enter-prices, both municipal and company, and who have established in recent years a record of electrical expansion with which no other country in the world can compete, I ask the House to approve the Amendment.
5.54 p.m.
Mr. H. MORRISON: I cannot pretend to speak from a closeness of association with this industry such as that of the two hon. Gentlemen who have just addressed the House. The hon. Member for South Croydon (Mr. H. G. Williams) has a good deal to do with the industry as the honorary executive director of the Incorporated Association of Electric Power Companies. The hon. Member who seconded the Amendment is a director of electrical supply companies. I have not their experience, therefore, but I have taken a great interest in the industry for many years and I have given some

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attention to its development. I am a little surprised at the arguments which have been advanced by the Mover and Seconder of the Amendment, and particularly at the somewhat irrelevant observations of the hon. Member for South Croydon. For some reason which it was not easy to fathom he made a comparison between telephones and electricity supply. Although he was moving an Amendment generally approving the proposals of the McGowan Report, he did not tell us much about the report.
He made comparisons between the cost of telephone calls and the price of electricity, but I could not see the connection. He compared the average cost of telephone calls, totally ignoring the fact that, owing to the progress that the Post Office has made, the use of toll and trunk calls has very much increased during the period. Consequently, he was not comparing like with like. If he had taken telephone progress during the years when the service was under the National Telephone Company and the progress in the same number of years under the State, he would have got some disconcerting results. Perhaps one of my hon. Friends behind me will be sufficiently industrious to put some questions to the Postmaster-General based on the statements of the hon. Member in order that we may have the pleasure of seeing a Tory Postmaster-General giving information that undermines the Tory Member for South Croydon.
There is no connection necessarily between telephones and electricity supply. If the hon. Member will make a comparison between the number of grape fruit that were consumed in Great Britain when they first came along and the number that are now consumed, he will find an even more interesting comparison between grape fruit, telephone calls and electricity supply, but when he has done it, I cannot see what it has to do with this case. If he will get from the brewing industry the figures of the consumption of lager beer he will find that there has been an amazing increase since the War.
Mr. H. G. WILLIAMS: Does not the right hon. Gentleman realise that the telephone system is a system of electricity distribution? Therefore, the analogy is a close one.
Mr. MORRISON: I do not accept the view that there is an industrial and commercial comparison between telephones and electricity. It is true that they both use electric current, but that is all there is in it. He might as well bring in the railway industry, but. it would not help his comparison. I invite the hon. Member to look up the progress of the telephone industry and he will find some interesting results. We have had the right hon. Gentleman who is now the Minister of Health, and we have had his successor singing the praises of the British telephone system and telling the country that it is the most efficient in the world, and they may well be right. They take credit for it, and why should they be thrown over by the honorary executive director of the Incorporated Association of Electric Power Companies.
I agree with the hon. Member for South Croydon that this subject is not really a matter of politics at all; it is a matter of business. I join with him in asking this House to consider it as essentially a matter of business organisation and of the best way in which the industry should be organised. It is not conclusive to put up the argument, as it has been put up by the hon. Member for South Croydon and the hon. Member for Stockport (Sir A. Gridley), that this industry has made great progress and that therefore its organisation must be all right. That is not evidence; that is not proof. I am aware that this industry has made very great progress, but we claim that the most enterprising part of the industry as a whole is the municipal side. The municipalities have been definitely more progressive and have shown more initiative than the company undertakings.
I do not say there are not enterprising companies, because there are some enterprising and very efficient companies, but there are many very unenterprising and inefficient ones. There are a large number of very efficient municipal undertakings, though, to be fair about the matter, there are some municipal undertakings whose efficiency could greatly be increased. But taking the company and the municipal undertakings together, and looking at their history, certainly the municipalities as a whole have been the more progressive. I do not think there is the smallest doubt about it. If it comes to free wiring, to the two-part

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tariff and to the development of sales' organisations, it is undoubtedly true that the municipalities have been the more progressive, and as about two-thirds of tale electricity output, two-thirds of the industry, is already socialised—publicly owned—it follows that when the hon. Member for South Croydon and the hon. Member for Stockport point to the great progress of this industry they are, as to two-thirds of their argument, paying a very great compliment to the public ownership of the electricity supply industry. I warn them, therefore, to be careful About their argument, because it is coming back at them.
This industry started on a local basis, with local government areas and municipal areas. Some of the undertakings became company undertakings and some municipal. At the moment we have more than 600 separate electricity supply undertakings. We suggest that for a relatively small country like ours that is an absurd number of separate undertakings, and I want to impress upon the House the consequences of having so large a number of separate undertakings. It really illustrates the misfortune of allowing the industry to develop as it has instead of planning it from the beginning. It has meant that we have a wide variety of voltages throughout the country, a wide variety of frequencies and a wide variety as between alternating current and direct current supplies. The result is that when a consumer moves from one district to another he may find the apparatus he used in the old district utterly useless in the new district. It also means that the difficulty of linking up undertakings is increased, and that the physical and technical difficulties of co-ordination are increased. It means, also, that the manufacturers of electrical appliances and utensils are put at a disadvantage, because they have to manufacture for different systems of supply, different voltages and different frequencies. Therefore, the possibilities of standardisation are made additionally difficult.
Tariffs vary enormously. It is a fact that some undertakings have had to be pushed into granting the two-part tariff. That ought never to have been the case. I think it is the case that some have not the two-part tariff even now. Further, some of the charges are atrociously high.
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Some of the company undertakings, a fair number of them, are charging prices for energy which are needlessly high and are lacking in enterprise and in service. Why is that? Because they are making easy, comfortable, handsome, profits, without having to shake themselves up; they are running their undertakings for easy, comfortable profits and not in the public interest or in the interests of consumers. When I was Minister of Transport I had a case before me from the western side of extra-London in which a company was charging a flat rate of 8d. a unit when municipalities inside the London area were down to charges of 4½d. and 4d. and even lower. The consumers in that district, amazing as it is, actually petitioned the Minister of Transport for an inquiry. I say "amazing" because the extraordinary thing is that although 20 consumers—I should like to post this on every hoarding—can nearly force the Minister of Transport to institute an inquiry, and any local authority can do so, the public have got into the habit of thinking that it is no good arguing with private companies and so they continue to pay.
I want every citizen who thinks he is charged too much for his electricity to get 19 others to join with him in petitioning the Minister of Transport for an inquiry. I should like to keep the Minister and the Electricity Commissioners busy. I should like to congest them with business, because that would make them face up to the magnitude of the problem. Before the inquiry to which I have referred 8d. a unit was the charge in that beautiful residential area on the western side of London, a cream of areas for domestic supply, where there was a nice, middle-class population with a bit of money with which to buy appliances and such as like labour-saving devices in their homes. It was a lovely area at 8d. a unit. The thing was positively ridiculous. What was the explanation. It was that the company were doing very well. I have no doubt their officers were doing well. It may be that the officers would have been more progressive if the directors would have permitted it. It may be that the officers said: "Well, the directors are asleep and why should we worry ourselves? Let us have an easy time, too." That is one of the terrible

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consequences of incompetent capitalist directors, that they infect the staff with incompetence as well. It is the Tory mind in industry. That is a very bad thing, and we must get rid of it as quickly as we can. As a result of the inquiry in that district the price was knocked down from 8d. to 5d. per unit at one blow. Much the same thing, though not quite so bad, happened in the Borough of Wandsworth, possibly including Putney, where the hon. Member for South Croydon lives. I was petitioned by Tory borough councillors who had been running the borough council for years, and who could have had a municipal undertaking there years ago if they had been alive. There, again, we had to bring the price down with a bang.
It is agreed that there are too many undertakings in the industry—we are all agreed about that—and the question on this point of amalgamation and the simplification of distribution is this: Shall we adopt the proposals in this report, which suggests that we should have minor amalgamations, so as to eliminate the smaller undertakings, or shall we make a clean job of it on a national basis? That is the issue with which the House is faced. The report proposes that power companies shall have certain powers of amalgamation with distributing undertakings within their area; that the larger company undertakings shall absorb the smaller municipal undertakings; and, if the hon. Member for South Croydon and the hon. Member for Stockport permit it, because they have their reservations about this report, the larger municipalities may he able to absorb the smaller companies.
Let us be practical politicians. Does anybody in this House think that is an easy political operation? Does anybody think that when we start the process of forcible minor amalgamations there is not going to be a first-class row? Every municipality affected would fight, and every hon. Member on this side of the House would support it in the fight—every one of us. The companies may or may not fight. They will be well protected financially by the energies of their friends, they will be well looked after, but many of them will fight, because they will object to forcible amalgamation and transfer, especially transfer to a municipality. What will be the result? That
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we shall be doing a miserable job of minor local amalgamations and incurring the maximum of political friction and difficulty in doing it, just as much trouble as if we made a clean job of the whole thing on a national basis. I say to the Minister of Transport that if he wants to be on a really big job of work and make himself famous for ever—not day by day, but for ever—this is the job he ought to love, and I would envy him the task.
I beg the Minister not to waste his time on this Report. The Chairman of the Committee was a big man connected with Imperial Chemical Industries, a very able man, Sir Harry McGowan. He is chairman of Imperial Chemical Industries; he knows how to do things in a big way. His company have trustified—practically—the chemical industry of Great Britain, they have achieved the national administration of a great industry; but when it comes to electricity Sir Harry McGowan "funks it," runs away from it, and says: "Let us amalgamate some little concern with something else." That is not worth the attention of the House, it is not worth the energies of the Government, and those who advised that. Committee to do this are people whose minds are not big enough for the running of this industry in the way it ought to be done—unless they knew that Government have the wrong frame of mind and would only do the little thing. Then I can understand them saying: "It is no good giving this Government big advice, give them small advice and they may take it." We have got into the habit of saying "Yes, we know that is the right thing to do, the big thing is the right thing to do"; yet the British Parliament never does the right thing if it is the big thing. We have a principle on which we act. We take "a further step," we take "the middle course "—or not even the middle course; we find some minor compromise.
I beg the House, if it is going to handle this problem, to handle it properly, and if there is a good, clean-cut national solution let us take it instead of playing about with this industry in the way we have been playing with it in the past. We have been playing about. We have been playing with it ever since the eighties of the last century, setting up local undertakings with no proper national control

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and no proper co-ordination. After we got through the War the Coalition Government, in 1919, brought in the Electricity Supply Act, but when their Lordships had done with it nearly all the powers of the electricity Commissioners had gone. A few years later we gave the Electricity Commissioners a little more power. Then we got one Joint Electricity Authority in the London and Home Counties, and a Joint Board somewhere else—or perhaps there were two. There was nearly a revolution in their Lordships' house as to whether any should be permitted to exist, but as a result of that legislation we got about three of these joint authorities. I do not know the others very well, but the London and Home Counties Authority is a fifth wheel to the coach. It is not its own fault, but it cannot properly do the job it is supposed to do.
In the Statute of 1926 the Government of that day established the Central Electricity Board. They did not transfer the generating undertakings to a national authority. Generating authorities' undertakings still remain the undertakings of local companies and municipalities; but they did put under the Central Electricity Board and the Electricity Commissioners a fairly complete national control of generation and they took power to coerce the companies and the municipalities to co-operate, to take and give bulk supplies and to control the price. In the field of generation we have substantially completed the job. There remains, as the hon. Member for Stockport admitted, the equally serious problem of distribution. Out of the price which the consumer pays for a unit of electricity, the minor part goes in generation and the larger part goes in distribution costs. If you have a large number of small undertakings, the capital cost of distribution equipment, in relation to the output of units, must clearly be unduly high, and just as we have effected great economies in generation by consolidation, which economies are still being effected, there remain a great number of economies to be effected in the field of distribution. Clearly, therefore, we ought to consolidate distribution.
The next question is, should we consolidate it upon a local basis or a national basis? Let us face what we are doing. If, in the West of England, Corn-
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wall, Devonshire and so on, the number of supply undertakings is reduced from—I do not know what they actually may be—from, say, 60 to six, we have not solved the problem. We shall, still have inequalities of charge and of policy among those six undertakings, and we shall certainly have grave inequalities between price charged and standard of management in the West of England and places like Manchester and Birmingham. All you will have done will have been to reduce the number of undertakings, but you will have preserved, deliberately, differences of charge, policy and standard of management throughout the country. We suggest that ultimately—it cannot be done to-morrow—just as I can post a letter to the hon. Member for South Croydon for 1½d., either to Putney—a place like that ought to cost more, but it does not—or to the North of Scotland, the ideal in electricity supply is that, irrespective of where a person lives, there ought to be a common tariff.
Mr. H. G. WILLIAMS: When you are posting letters, the cost in terminal charges of transport over long distances is trifling in comparison with distribution charges. It is quite easy, therefore, to run letters on that basis; but if the right hon. Gentleman is ever again Minister of Transport and tries to run electricity on that basis, he will land himself in the neighbourhood of Carey Street.
Mr. MORRISON: I was not proposing to do so. I was not proposing that the person who uses 100 units should get them for the same price as the person who uses five units, but if the Post Office letter delivery and carrying services were run by the railway companies of England, we should not get a letter sent to the Shetland Islands for the same price. It is the result of collective organisation. The same argument about the cost of terminals might be applied to the railways themselves. It does cost more to get to Scotland than to get to Putney. One ought to have that suggestion in mind.
Our suggestion is that the 600-odd electricity supply undertakings should be abolished. The Central Electricity Board should be abolished. The Electricity Commissioners should be abolished. We might need some technical people to take their place. We would scrap the lot. We would

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transfer the generating and distributing undertakings to a national corporation, a business concern, appointed by a Minister on grounds of competence and ability to run the industry, and we would have the whole ownership of the industry, right through the nation, under that national electrical corporation. We agree that it cannot all be run from London, or from one common centre. Therefore, we would establish, under the national board, regional boards for appropriate regions, but they ought to be subject to the policy of the national board itself.
There would be, in charge of each region, a first-class electrical engineer and a first-class sales manager and service manager. One of the problems is that a good electrical engineer might be a first-class technician but at a loss in the field of salesmanship. These regional bodies would each have, not only first-class electrical engineers, possibly one for generation and another for distribution, or the same man would do both jobs, but a first-class sales manager to look after commercial policy and service and to see that consumers had plenty of service from the organisation. We would clothe those regional bodies with consultative committees, in order that they might be kept in touch with public opinion. It is only by such methods that you will iron out the inequalities of charge and the differences of voltage, frequency, and systems of supply. It is only by that method of a national organisation on a large scale, with regional organisations, that you can command an equality of first-class technical and commercial service to get this industry running vigorously and competently, in a really aggressive business way. We believe that it is essential for that to be done. The gas industry has beaten electricity because the gas industry is run better than the electrical industry. Gas has had a hard and very difficult fight, but I never cease to express my admiration for the fight which the gas people have put up for the preservation of their industry. [Interruption.] An hon. Member says that that is private enterprise; it may be. I am talking about industries at the moment. If a large number of electrical industry people had been as competent, and had shown as much grit, enterprise and go, as the best of the gas people, the elec-
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trical industry would be doing even better than it is at the present moment.
Those are the views which we put to the House. We suggest that it offers a basis upon which this industry ought to be reorganised. I know that the bigness of the thing and the national scope of it, with the big regional organisations, may frighten the timid minds of hon. Members opposite, but as sure as we are debating this subject to-day, that solution will come. I believe hon. Members will say: "That will come some day, and we believe you are right, but let us take the next step; let us compromise." I would beg of the Minister and the Government not to think about the inevitability of patching-up, midway courses and compromise, but to look at the industry. It is a lovely industry, and it can be the brightest jewel in the British industrial crown. It really is a fine industry that can be made very much finer. I beg of them to look at it and to say to themselves: "If we were starting again, how should we run this industry?" Let them decide how they would run it. I believe that they would run it our way. Having so decided, let us turn our minds not to the miserable compromise which would involve the maximum of trouble with the minimum of result, contained in the report of these very hard-working gentlemen, but let us take hold of this industry, organise it for the national service, make a clean job and produce a first-class electrical supply industry for the people of Great Britain.
6.26 p.m.
The MINISTER of TRANSPORT (Mr. Hore-Belisha): The right hon. Gentleman always speaks informatively and with assurance. He does, however, upon occasion, make errors, and the error which he made in the course of his speech was in describing my hon. Friend the Member for South Croydon (Mr. H. G. Williams) as the honorary secretary of the Power Association. He is not the honorary secretary; he is the secretary. His services, as the House will recognise in the brilliant speech which he made this afternoon, are far too valuable to be given gratuitously.
The right hon. Gentleman the Member for South Hackney (Mr. H. Morrison) will not mind my reminding him that this is not the only occasion during the last seven days on which we have had an

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opportunity of considering the merits of nationalisation. He accused me of looking at life from day to day, whereas he had his eyes fixed upon some distant scene. That is not quite the case, as he will, I am sure, admit. We have just introduced a Bill to take over 4,500 miles of trunk roads. I shall not readily forget that I was prudently warned by the right hon. Gentleman not to expect too much from nationalising the roads. If to-day I inform him that the Government are not attracted by his proposition immediately to nationalise electricity, he will bear that information with less surprise and with as much fortitude as I bore his admonition. But let not this paradox of the right hon. Gentleman detract from the value of the Debate initiated by the hon. Member for Morpeth (Mr. R. J. Taylor) with so much enthusiasm. It will give us an opportunity of considering the views of hon. Members in advance of any proposals which it may be our fortune to lay before the House.
We are not considering generalities and desiderata this afternoon, but we are concerned with a precise Motion. I do not think there is any distinction or difference in any part of the House as to what we desire to see achieved, but this is a definite Motion raising a definite principle, and we must consider it closely. I shall divide what I have to say, as hon. Members have done and the Motion itself does, into two parts—generation and distribution. In 1926 Parliament, realising that, so long as the generation of electricity was dispersed among a multiplicity of isolated power stations, we could not obtain the full advantages of this form of energy, decided to establish a central board with the duty of making a grid interconnecting the more important and efficient of these stations among themselves and with the principal distributing centres. Before this linking up could become complete, it was necessary to substitute, for the varying cycles produced by different under-takers, one standard frequency. The Act of 1926 was accordingly passed, the board has been established, and supply has been concentrated in selected stations, those which are superfluous—100 already—having been eliminated; interconnection has been effected, so that all distributing centres in the country can now depend upon their requirements being met directly or indirectly through the mains
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of the Central Electricity Board, and by next year there will be one single frequency prevailing.
Previous to these reforms—and it seems to me that the speech of the Mover of this Motion was addressed rather to that era than to this—the reserve plant in generating stations, representing many millions of invested money, was 83 per cent. in excess of the aggregate demand upon it. To-day, although the process is not yet concluded, it has been found possible, by the pooling of resources, to reduce this reserve to no more than 40 per cent., thus liberating much capital, otherwise held idle, for revenue-earning purposes. In the result, the cost of a unit of electricity delivered wholesale through the medium of the board now averages less than ½d., whereas 10 years ago, before there was this interdependence, it was about ld. To have reduced the cost of generation by one-half in 10 years is surely an achievement. Such benefits as have been secured have been secured with the good will, and not only with the good will, but largely at the cost, of the industry itself. The organisation which is doing this work is, under the terms of this Motion, to be expropriated—swept away, as the right hon. Gentleman said. £50,000,000 borrowed by the board would have to be acquired—for I do not presume that there is any suggestion of confiscation—by the State; all the capital now invested in the generating stations, amounting to £147,000,000, would have to be transferred; and the board itself, now uninfluenced except by commercial principles, would have to be abolished or absorbed into some Government Department.
Mr. H. MORRISON: No.
Mr. HORE-BELISHA: I do not think the right hon. Gentleman will quibble; I am following very closely the suggestion of the Motion. The Motion says that this industry is to be owned by the State and controlled by the State, by a management subject to ministerial control or such other control as may be required. Therefore, I represent accurately the terms of the Motion.
Mr. MORRISON: There is some confusion here. Just as it is ridiculous to talk about the taking over of the roads completely from the municipalities, under whom they are already publicly owned, as if it were transferring private

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undertakings, it is really absurd to talk about Whitehall management or ministerial management of a public corporation. It is already ensured by the Central Electricity Board. We are proposing substantially the same relationship between the Minister and the new electrical corporation as exists between him and the Central Electricity Board at the present time.
Mr. HORE-BELISHA: I quite agree with the right hon. Gentleman that the proposal that there should be ministerial control of this industry is ridiculous, but I am not making it. As there is in existence a Central Board apparently fulfilling all that the right hon. Gentleman desires, and enjoying freedom, cannot explain to myself why the Motion is on the Paper at all. If the present situation is satisfactory, then cadit quœstio, and we might have spent the afternoon in an even more pleasant way—and we agree that this one is pleasant—than we have. [Interruption.] The right hon. Gentleman is evidently touched on some sore point. I am dealing with the Motion, and perhaps, as I did not bear any resentment at what he said, and what he has frequently said on previous occasions, he will allow me to proceed with the decorum which should characterise our Debates.
The House will be perplexed as to what improvement could possibly accrue as a result of the carrying of this Motion, and all the more so as the municipal corporations, many of them Socialist boroughs, are responsible, on behalf of the ratepayers, for nearly two-thirds of the capital invested in the electricity supply industry to-day. We have been told by the Mover of the Motion of two advantages that would accrue, the one being that the power stations would all be moved to the coalfields—where many of them are now—and the other that the wages of the coalminers could be increased to a proper scale. I recognise that those were two reasons—not very economic ones, I thought—which he put forward to justify this change. Here, then, without real rhyme or reason, without real cause or justification, it is proposed to do away with a system which has produced beneficent results, to take away from the Central Electricity Board its independence—I will put it no higher than that—and for no very clearly defined
480
purpose. I hope in the circumstances that the supporters of the Motion, having heard this discussion, will not seek to commit themselves in advance to a hidebound solution of these problems before they have had an opportunity of seeing and studying the plan of the Government. The right hon. Gentleman complained about bringing the Tory mind into industry. Surely it is equally unpleasant to bring the Socialist mind into industry. This question, I hope, will be studied on its merits and the proposals of the Government given fair consideration without being subjected to the anticipatory threats that were levelled against them by the right hon. Gentleman.
So much for generation. But one must be candid, and the fact that we have created a system of making electricity economically available to all authorised distributors does not mean that we have discharged our task of making it available to all potential consumers, or even of making it available cheaply and on a uniform system and voltage to all actual consumers. I shall now confirm almost everything that has been said on this point this afternoon. We are still left with would-be purchasers, largely in great rural areas, who have no recourse to any local supply. I am informed that distribution mains are not yet within reach of some 25 per cent. of the population. In many cases the high tension transmission lines themselves pass—and this is a cause of bewilderment to those who do not understand the technical reasons why they cannot tap them—through their own homesteads and farms. To actual consumers, tariffs vary very widely in their basis and amount, and give rise to the confusion and discontent that has been described by several hon. Members. While the grid now supplies standard alternating current, some of the older distributors, owing to the date when they were established, have to convert this into direct current, and that may add to the cost.
Further, just as there were numerous different frequencies, which affected generation, so there are numerous voltages of supply which affect distribution. Consumers moving from one district to another—I only confirm what has been said already—find that they are unable to use in their new homes the electrical fittings which they have purchased. This

481
is a serious cause of complaint in many parts of the country, and particularly in London, where actually on opposite sides of the street different systems, different voltages, and different forms of charge may prevail. It was the consciousness of all these difficulties, which exasperated the citizens, that caused the Government to invite Sir Harry McGowan and his Committee to investigate the whole problem, to bring under review these anomalies and others, and to make recommendations. The Committee took widespread evidence from all parts of the industry and from consumers, and, after a comprehensive study of the subject, they drew a clear distinction between the problem of generation and main transmission on the one hand and that of distribution on the other. They concluded that the fact that it has been found possible to vest the control of generation and main transmission throughout the United Kingdom in the Central Electricity Board is not in their opinion conclusive evidence that the distribution of electricity should be organised on a similar basis. This, apparently, is where the right hon. Gentleman opposite and his friends part company with the Committee.
The reason for the distinction is plain. Generation and main transmission are highly technical problems. There is no physical reason why electricity generated in Glasgow should not be made available in Southend. The type of machinery, the lay-out of plant, like the remedy for a failure in a circuit, are matters for the attention of specialists, and the concern of the board must be to obtain the best technical assistance available on a country-wide scale. Distribution, on the other hand, is mainly salesmanship, and complete centralisation of distribution will not necessarily produce the best conditions for local buyers. Here you must deal promptly and agreeably with persons and firms within properly defined territorial limits. Drawing this distinction, the Committee made recommendations which would have the result of creating quite a different type of organisation for distribution from that which had previously been established on the generating side, and in which the national point of view dominated as contrasted with the regional. Here the Committee recommended that local interest should be retained and the best business enter-
482
prise encouraged by absorbing into the more efficient distribution units in each area those which by reason of their size and characteristics were considered less capable of doing the urgent work of expanding supplies, and they definitely rejected, for the same reason, stereotyped national or regional boards, which they said would dislocate an established and expanding industry.
A further reason for retaining the businesslike features of the present system was the important one that on the whole it would be more likely to retain the co-operation of the industry as a whole, whether local authority or company, and that in itself, if you are going to make reforms, is a desirability. A justification for proceeding if possible by accelerated evolution rather than by drastic transformation, as suggested in the Motion, is emphasised by the progress made despite the existing disabilities, which the Committee proposed to remove. My hon. Friend the Member for South Croydon, in that speech which so much informed and delighted the House, told us that there had been an increase. in the sales in the last ten years amounting to, I think, about 200 per cent. in the sale of units. It remains significant, on the other hand, that distribution costs per unit sold have remained practically constant during the last 11 years. The Committee's proposals are largely directed to reducing these.
I only deal with the proposals of the committee in so far as they are related to this Motion and, in so far as they are related to the Motion, they definitely prefer the local to the national type of organisation, and they definitely prefer, in the province of salesmanship, to retain the kind of commercial enterprise that now prevails. The Motion discards completely the McGowan inquiry. The hon. Member who moved the Motion did not mention it at all, and it is framed in such a way as to light incense on the altar of a theory without regard to practical considerations. If it be a question of choosing between the Motion and the Amendment, the Government would prefer to see the Amendment carried. I cannot at this stage exceed what was said by the Prime Minister answering the hon. Member for South Shields (Mr. Ede) who, even when he does not address the House I am glad to see occupies its attention. He was asked

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"whether it is proposed to find time during the current Session for legislation dealing with the distribution of electricity?
The PRIME MINISTER: The hon. Member will have noticed that a full programme of legislation is already promised for this Session, and I cannot undertake at present that it will be possible to add to it. But the Government are alive to the importance of the recommendations made by the committee for the reorganisation of the supply of electricity and have the matter closely before them."—[OFFICIAL REPORT, 9th November, 1936; col. 500, Vol. 317.]
I cannot exceed that but, if the Amendment should be carried, we should deem ourselves free, as the hon. Member for South Croydon desired, to construct the edifice of the future after due consideration of the recommendations of men who looked at this problem merely from the point of view of finding the solution that was best in the interests of the nation as a whole without any political prejudice.
Mr. H. MORRISON: Have the Government formed any opinion on the McGowan Committee's report at all? That is what the House wants to know. The report is dated 8th May.
Mr. HORE-BELISHA: The right hon. Gentleman has spoken from the Front Bench and I am conscious that I am doing the same. It is a Private Member's day, and that is why I cut my remarks extremely short. The right hon. Gentleman, having been a Minister much longer than I have been, knows that it is not the practice of any Government to deal piecemeal with what is in a Bill. We shall produce our Measure as a comprehensive whole when it has been discussed and considered by the industry. In advance of that I am not prepared to say more than I have done.
6.52 p.m.
Mr. de ROTHSCHILD: I welcome the last remarks that fell from the lips of the Minister inasmuch as they not only show great regard for the traditions of the House in respect to the rights of private Members, but also because they show that the Government have some intention, at what period we do not know, of implementing some of the recommendations of this report. I gathered from his speech, although it was couched more or less in the same academic way as all the speeches that have been delivered
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to-day, that he did not welcome the discussion very much, and I can well understand it. Indeed, if the Government were not prepared to take some sort of action shortly, the Debate may not have been very welcome. I agree with the Mover of the Motion that ultimately a public utility corporation must be the objective of our policy in electricity matters. In this matter I also agree with the McGowan report, which asks us to deal with the matter step by step. Fifty years, which is the limit that the report seems to fix to the term when a great utility concern will be handling the electricity of the country, may be seeing too long ahead. We must not forget that there are many elements which enter into this problem. In the next 50 years it may well be that scientific developments may make public ownership less attractive even than hon. Members above the Gangway think it at present. If the internal combustion engine were developed it might easily create a new state of affairs in all the factories and mills of the country. The railways had a monopoly of transport, and it was urged that public control should be applied to them, but what happened? Motor transport revolutionised transport on the roads, and we had to bring in Measures to strengthen and support the railways versus road motor transport.
As regards electricity, there can be no doubt that, whatever its future, it must at least, as far as the human eye can see, always play a great part in our national life, and therefore it must be considered as a national service, and the policy with regard to it must be a policy based on a national principle. The hon. Member for South Croydon (Mr. H. G. Williams) was very full of praise for the way private enterprise had been conducting industry. I should have liked to draw his attention, had he been here, to one paragraph in which Sir Harry McGowan arid his colleagues point out that in the area of one of the existing companies there are 32 unauthorised undertakers, which exist quite legally, and that these are operated without statutory powers, and supply as many as 29,000 consumers and 5,000 public lamps. Of course, a condition of that kind is not one that should be encouraged. It certainly is not one that can be praised, and it does not redound to the credit of the statutory company itself.

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There is no doubt that cheapness and efficiency have been achieved in certain districts, but in many cases it has been done only by undertakings which have been confined in densely populated areas, and which have left the surrounding districts totally unprovided for. Authorised undertakings have concentrated on urban areas because they promise more remunerative business, and rural development has not unnaturally been ignored. Cheapness and efficiency in these conditions are not very difficult to obtain. What we must aim at—I hope when the Minister brings in his comprehensive Bill he will fulfil this object—is cheap electricity for the whole country, and this can be achieved only by comprehensive amalgamations, as is proposed by the McGowan report.
It is futile to think of scrapping, as the late Minister of Transport put it, the 600 undertakings. It is useless to set up a national board. Let him remember what happened 20 or 25 years ago when the telephone service was taken over. Let him remember the tremendous difficulties that occurred and the tremendous expense that was involved. Does he consider that at one stroke of the pen he could do for this very much more complicated industry what it was impossible to do for the telephone in those days? I agree with the McGowan Report—step by step. Possibly when there has been a series of amalgamations if the right hon. Gentleman is in office he may find it easier to achieve his object, but when he was in office the last time he shirked the issue altogether and did not touch it at all.
Mr. KIRKWOOD: It was for lack of support by the House.
Mr. de ROTHSCHILD: I did not say the right hon. Gentleman was not able to put it through. I said he did not even put it forward. The difficulty that we are considering, the developing of the electrical industry throughout the country side, is that the urban consumer may have to pay for the consumer in the country. There is no doubt that electricity in the country must be more expensive than it is in the towns. The price disparity will not be so great if urban and rural districts are developed at the same time. To develop rural areas alone, as different entities from those in the towns, would mean simply duplication, a duplication of
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capital works, mains and services, and therefore more expense. It is hoped that when this amalgamation takes place the districts will be well assigned and that urban and rural districts will be developed together. As the Minister has pointed out, the grid has reduced the price of generation very much—as the Report says, by 46 per cent.—but the cost to the consumer has not diminished.
With regard to the question of electricity in the rural areas, which is of great importance to my constituency, I do hope that the Minister of Transport will enter into closer communication with the Minister of Agriculture, and I hope that both of them—they are both young men who have just been put into the Cabinet—will rise to the great opportunities which are before them in this field. Indeed, the Minister of Agriculture can investigate the economic possibilities for electricity on the farm and he can provide authoritative information for the farmers. Also he can encourage large consumers to use electricity. That this is a matter of great importance has been shown in Chester and the surrounding districts, where it has been possible to develop the electrical industry in the rural areas because in Chester there are a considerable number of big users of electricity. In my own constituency there are possibilities of the same kind, and I hope that in this connection the Minister will be able to do something. The large pumping stations in the Fens are potential large consumers. At present some use oil and some steam, but the use of electricity should be encouraged, and if the pumping stations throughout the Fens use electricity it will enable juice to be sent throughout the country to all the different farms and villages which need it so much. There is hardly any industry which would revive more than the farming industry under the impulse of electrical power.
After all, what is needed at present is a policy of cheap home-grown food and better nutrition. Electricity for ploughing, electricity in the byre, and electricity on the poultry farm would make the industry of the farmer cheaper. Also it would enable the farmer to produce milk under healthier conditions, and conditions which are better for the mothers and children of this country. As regards the amenities in the countryside, those

487
Members of the House who, as I have been, have been through an election campaign in the winter in rural areas know what the conditions are. Night after night one goes into village halls and schoolrooms where one can see nothing but two miserable paraffin lamps, and one feels that one is in a prehistoric cave addressing a lot of troglodytes, with only a few resinous torches to light up the place. Then we wonder that there is an exodus from the country to the towns and we wonder that people prefer even the glare of the neon lights to the dreary penumbra of their own homes. I hope that the Minister will realise that there is a great task lying before him, and that he will bring electric light and heat to the farm worker's cottage. If he does that he will bring happiness and contentment to a great number of worthy citizens of this country. After all, the Electricity Committee which sat in 1928 found that rural electricity was no more expensive than oil—even at one shilling a unit.
The development of rural electricity is a national question and I hope that the Minister will take that view. Let us increase home-grown foods, and to do this let us have cheap power and good rural roads. But these developments will not come about without energetic action on the part of the Minister. Companies must be induced to show enterprise in the rural areas. Some public authorities have shown initiative; one has only to look at Chester, Bedford, Norwich and Aylesbury. But I regret to say that most of the supply companies have little interest in rural areas. So much is that so, that the farmers themselves have often to take the initiative. They have to go round themselves and find the customers; they canvass friends of theirs who will unite to ask for electricity. I hope that the industry will avoid nationalisation, but if it really wishes to avoid nationalisation it must show the virtues of commercial enterprise in dealing with the country consumer.
I hope that the Government will accept the broad conclusion of the McGowan Committee—the re-grouping of distributive undertakings. This is needed even if compulsion must be applied. The Government should not
488
be deterred by the interests of private companies. I do not think that these should stand in the way of the national interest. If amalgamation schemes produce anomalies these must be solved by equitable terms of purchase. The terms of purchase which are recommended by the McGowan Committee show in one respect more sympathy with the companies than with the public authorities. They propose that when a company is acquired the purchase price should be based on the cost of the undertaking, less depreciation, plus an addition for future profits of the company. But they propose that when a local authority is acquired the purchase should be on cost, less depreciation only. It is most important that the Government's intention with regard to this point should be made known as soon as possible.
An instance has arisen in my own constituency. The Wisbech Corporation contemplates acquiring an undertaking now owned by a company. It would have to acquire it on an ordinary commercial basis; it would have to take into account that the undertaking is a profitable concern earning a 10 per cent. dividend. But if the McGowan proposals are adopted as they stand at present it may happen that the Wisbech Corporation would be compelled to sell out in a few years to a large power company, and at a price which would take account only of the original costs of the plant, less depreciation. The uncertainty of the Government's intentions in this respect presents a difficulty to many local authorities who contemplate acquiring undertakings. The example of Wisbech shows another anomaly. If this undertaking is now acquired by the Corporation the regional undertaking which is to be set up under the scheme with powers to acquire undertakings within its area will have to pay less for it, less than if it remained in the hands of the company. That is a very striking anomaly.
But even if the Government are not prepared to adopt the major recommendations of this report, other of its proposals must be adopted. These include the recommendation that the Electricity Commissioners should be empowered to require undertakings to carry out schemes for undeveloped areas; and the plea for greater uniformity in the system of supply and voltages and in tariffs and methods of

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charge. Let us pay the greatest attention to those paragraphs which are devoted to holding companies, because even if the major conclusions of this report are not adopted something should be done in re3pect, of these abuses. I will give an example. I will not give any names, because obviously I do not wish to single out any company as particularly deserving of censure.
This is a case in which four companies are involved. The first company, the actual supplier, supplies two boroughs, four urban districts and six rural districts, with electricity. This company in 1935 paid a dividend of 8 per cent. It placed to reserve 7½ per cent. of its capital, or £15,000. In addition, this company paid interest of 5.7 per cent. to an associated company on a loan of £74,000. The share capital of this company is £200,000. That is all right. But let us come to the second company. The second company owns £187,000 of the capital of the first. It also owns or controls a certain number of other small companies and it acts as a contracting company for the first company. This second company itself has a capital of £100,000 preference shares and £250,000 ordinary shares. In 1935 this second company paid 10 per cent. on ordinary shares, a 10 per cent. cash bonus, it placed to reserve £35,000, or 14 per cent. of its ordinary capital, and, looking at it from a different point of view, the net profit for the year, before making provision for Income Tax, amounted to £109,000, or over 30 per cent. on its total capital. Of this £109,000, £30,000 is derived from investments in subsidiary and associated companies. There remains a balance of £79,000. This balance is derived from trading on its own account, and the capital expenditure upon fixed assets—that is to say, the freehold property, plant, machinery, etc., of this company—stands at less than £20,000. These figures are taken from Garcke's Manual.
Let me sum up the position. The assets of this company consist chiefly of investments in subsidiary and associated companies. Thirty thousand pounds is derived directly from revenue in dividends and. interest, and £79,000 remains to be accounted for. This profit is made from relationship with the subsidiary companies, and—this is my point—is ultimately derived from the consumer of the
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electricity supplied by the subsidiary companies, and that at a flat rate of 8d. per unit. Of course, the chain of holding companies does not stop there. The capital of the second company is almost entirely held between the third and fourth companies, one of which holds the controlling interest in the other. Such intricate and interesting company finance is no doubt quite legitimate and not uncommon, but when companies operate under statutory monopoly, the profits should be clearly ascertained or at an events they should be clearly ascertainable, especially when prices to the consumer are so high.
A similar situation has arisen in my constituency. There the company shows a balance of £1,130 on its ordinary share capital of £280,000, but it pays £20,000 as interest to an associated company upon a 5 per cent. loan of £400,000. The company to which I am alluding serves the town of March and the surrounding villages of Doddington and others. In March the rateable values have lately risen, and, of course, electricity charges are about to follow suit. The company has been asked to revise its tariff, but it claims that it cannot do so because it shows no profit. No wonder there is to be a protest meeting in March next week because the consumers are not prepared to accept the explanation of the company that they are not showing a profit. They point out that the holding company pays a dividend of 8 per cent., and has made two capital bonuses in the last 12 years amounting to 66 per cent. each. If high charges are justified on the ground of low profit, then the profits of holding corn-panics must be taken into account. The flat rate for lighting in the urban district of March is 9d. per unit, although there are 11,000 inhabitants, and they are using overhead cables, which is the cheapest method of distribution, as the House well know.
I trust that the Minister, whatever he does, will at least implement the McGowan recommendations for compulsory amalgamation of associated and subsidiary companies when desirable, for an official audit of accounts of these holding companies, and for taking holding companies' profits into consideration when inquiring into the prices of a subsidiary company. The McGowan Report strongly emphasises the importance of financial considerations and of financial

491
administration. Sir Harry McGowan points out that one per cent. saving in capital charges would permit a 6½ per cent. reduction in charges to the consumer.
I regret that the hon. Gentleman the Member for South Croydon is not here at the present time, because that would contravert at least some of his assertions on the point of interest in this matter. But we must aim at cheaper electricity over the country as a whole. That is entirely in the hands of the Minister. He has just been raised to the high status of a Cabinet Minister. Let him divest himself of his own interest at the present time and look at this question from the whole national point of view and impress upon the other Members of the Cabinet the importance of what has to be done. I dare say that we all have been pleased to see him raised to this high ministerial status, because we have thought that he would electrify some of his somnolescent and obsolescent colleagues, but we also hope that he will devote his energies to electrifying the countryside.
7.22 p.m.
Mr. EDE: I heard the speech of the Minister of Transport this afternoon with a feeling of great disappointment. I had hoped that he would have been able at least to give some broad indications of what the lines of Government policy would be. No one can be better aware than he is of the state of mind of the people in the electricity supply industry while they are awaiting the decision of the Government on this important matter. I regretted to hear the way in which he suggested that amalgamations were not to be too big, because I think that one can still have very wide regions in this country, such as were advocated by my right hon. Friend the Member for South Hackney (Mr. H. Morrison) and preserve the amount of local drive and push which is necessary to secure the salesmanship to which he alluded. The hon. Gentleman the Member for Hampstead (Mr. G. Balfour) and myself are the only two Members of the House who gave evidence before the McGowan Committee, and I do not imagine for a moment that our evidence was on the same lines. I am bound to say that when I read the report I imagined that we were both
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equally disappointed with the result of our evidence. If we were cancelled out in our own minds, we appear also to have been rather cancelled out in the minds of the Committee.
I should like to draw the attention of the Minister to one very striking example given in the report of the effect of a big amalgamation as far as population is concerned. The London and Home Counties Joint Electricity Authority amalgamated six companies which had been operating in South Middlesex and in Surrey. They now control 200 square miles of mixed urban and rural territory. They have only two tariffs for the whole of that area, and they have very nearly reached the stage when, I hope, there will be one tariff for the people on the Sussex border of Surrey and in the Northern part of Surrey and in South Middlesex. It is very striking that in that area for two successive years that authority has been the undertaker which has put out the most new cookers to consumers in the whole country. That is some indication of what can be done. I am sure that what has been said by the hon. Gentleman the Member for the Isle of Ely (Mr. de Rothschild) with regard to the desire of the country people for electricity can be proved out of the records of every undertaker really striving to meet the rural demands. In the rural district one is not in competition with gas so much as in competition with the Valor Perfection Stove and similar anachronisms of that nature, and I do not think that even in the town one is so much in competition with the gas company as with the can-opener. There are still a number of women who, when they come home from the bridge party consider that it is somewhat quicker to get their husband's supper ready by producing a can-opener and opening a tin than to provide him with something fresh, but in the rural districts we are only in competition with the Valor Perfection Stove. The advantages there are too easily demonstrable ever to be missed by the housewife.
The London and Home Counties Joint Electricity area consists of 1,841 square miles, and in that area there still remain 82 separate undertakers. No one can defend a position like that, and the sooner steps are taken by the Government to deal with the improvement of that part of the country the better. I should

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like to draw the attention of the Minister and of the House to the working of electricity distribution in that area. The local authorities have a total capital expenditure of £45,800,000, and their capital charges amount to £3,300,000, or about 7.18 per cent. The companies in the same area have a total expenditure of £78,000,000, and are paying interest of over £7,000,000 a year, with a capital charge of 9.09 per cent. Actually, if the areas of the companies were financed for their capital on the same basis of the municipalities, there would be a saving to the consumer of £1,500,000 a year. The Joint Electricity Authority, although it has only been operating for some four years, has in that time, in the way of
reduced charges, actually left in the pockets of the consumers in that 200 square miles in which they directly distribute over £2,500,000 which would have been abstracted from their pocket had the companies remained private concerns. I hope that the Minister will very shortly be able to announce the decision of the Government upon the McGowan Report and the problems which are raised with regard to electricity distribution generally.
Question put, "That the words proposed to be left out stand part of the Question."
The House divided: Ayes, 114; Noes, 173.

Division No. 16.

AYES.

[7.30 p.m.

Acland, R. T. D. (Barnstaple)

Hayday, A.

Richards, R. (Wrexham)

Adams, D. (Consett)

Henderson, T. (Tradeston)

Ridley, G.

Adams, D. M. (Poplar, S.)

Hicks, E. G.

Riley, B.

Adamson, W. M.

Hills, A. (Pontefract)

Ritson, J.

Alexander, Rt. Hon. A. V. (H'lsbr.)

Hollins, A.

Roberts, Rt. Hon. F. O. (W. Brom.)

Ammon, C. G.

Hopkin, D.

Robinson, W. A. (St. Helens)

Anderson, F. (Whitehaven)

Jagger, J.

Rowson, G.

Banfield, J. W.

Jenkins, A. (Pontypool)

Salter, Dr. A.

Batey, J.

John, W.

Sanders, W. S.

Bellenger, F.

Jones, A. C. (Shipley)

Sexton, T. M.

Benson, G.

Kelly, W. T.

Shinwell, E.

Bevan, A.

Kennedy, Rt. Hon. T.

Short, A.

Brooke, W.

Kirkwood, D.

Silkin, L.

Brown, Rt. Hon. J. (S. Ayrshire)

Lansbury, Rt. Hon, G.

Silverman, S. S.

Buchanan, G.

Lathan, G.

Simpson, F. B.

Burke. W. A.

Lawson, J. J.

Smith, Ben (Rotherhithe)

Charleton, H. C.

Leach, W.

Smith, E. (Stoke)

Chater, D.

Leonard, W

Smith, Rt. Hon. H. B. Lees- (k'ly)

Cluse, W. S.

Leslie, J. R.

Sorensen, R. W.

Clynes, Rt. Hon. J. R.

Logan, D. G.

Stewart, W. J. (H'ght'n-le-Sp'ng)

Cripps, Hon. Sir Stafford

Lunn, W.

Strauss, G. R. (Lambeth, N.)

Dagger, G.

Macdonald, G. (Ince)

Thorne, W.

Dalton, H.

McEntee, V. La T.

Thurtle, E.

Davies. R. J. (Westhoughton)

McGhee, H. G.

Viant, S. P.

Day, H.

Maclean, N.

Walker, J.

Dobbie, W.

Marshall, F,

Watkins, F. C.

Ede, J. C.

Mathers, G.

Watson, W. McL.

Edwards, Sir C. (Bedwellty)

Messer, F.

Wedgwood, Rt. Hon. J. C.

Frankel, D.

Montague, F.

Welsh, J. C.

Gallacher, W.

Morrison, Rt. Hon. H. (Ha'ka'y, S.)

Whiteley, W.

Gardner, B. W.

Noel-Baker, P. J.

Williams, E. J. (Ogmore)

Gibbins, J.

Oliver, G. H.

Williams, T. (Don Valley)

Green, W. H. (Deptford)

Paling, W.

Wilson. C. H. (Attercliffe)

Greenwood, Rt. Hon. A.

Parker, J.

Windsor, W. (Hull, C.)

Griffiths, G. A. (Hemsworth)

Parkinson, J. A.

Woods, G. S. (Finsbury)

Griffiths, J. (Llanelly)

Pethick-Lawrence, F. W.

Young, Sir R. (Newton)

Groves, T. E.

Potts, J.

Hall, G. H. (Aberdare)

Pritt, D. N.

TELLERS FOR THE AYES.—

Hall, J. H. (Whitechapel)

Quibell, D. J. K.

Mr. Tinker and Mr. R. J. Taylor.

NOES.

Adams, S. V. T. (Leeds, W.)

Cazalet, Thelma (Islington, E.)

Culverwell, C. T.

Agnew, Lieut.-Comdr. P. G.

Channon, H.

Dawson, Sir P.

Albery, Sir Irving

Chapman, A. (Rutherglen)

Denman, Hon. R. D.

Aske, Sir R. W.

Chorlton, A. E. L.

Denville, Alfred

Barrie, Sir C. C.

Clydesdale, Marquess of

Doland, G. F.

Beauchamp, Sir B. C.

Colfax, Major W. P.

Donner, P. W.

Beaumont, Hon. R. E. B. (Portsm'h)

Colman, N. C. D.

Drewe, C.

Blindell, Sir J.

Colville, Lt.-Col. Fit Hon. D. J.

Duckworth, W. R. (Moss Side)

Boulton, W. W.

Cook, T. R. A. M. (Norfolk, N.)

Dugdale, Major T. L.

Bowater, Col. Sir T. Vansittart

Cooke, J. D. (Hammersmith, S.)

Duggan, H. J.

Briscoe, Capt. R. G.

Cooper, Rt. Hn. T. M. (E'nburgh. W.)

Duncan, J. A. L.

Brocklebank, C. E. R.

Craven-Ellis, W.

Dunne, P. R. R.

Burgin, Dr. E. L.

Cross, R. H.

Eastwood, J. F.

Campbell, Sir E. T.

Cruddas, Col. B.

Eckersley, P. T.

Edge, Sir W.

Latham, Sir P.

Samuel, Sir A. M. (Farnham)

Edmondson, Major Sir J.

Law, Sir A. J. (High Peak)

Samuel, M. R. A. (Putney)

Ellis, Sir G.

Leech, Dr. J. W.

Scott, Lord William

Elliston, G. S.

Lees-Jones, J.

Seely, Sir H. M.

Elmley, Viscount

Lennox-Boyd, A. T. L.

Selley, H. R.

Emmott, C. E. G. C.

Liddall, W. S.

Shaw, Major P. S. (Wavertree)

Errington, E.

Little, Sir E. Graham-

Shaw, Captain W. T. (Forfar)

Erskine Hill, A. G.

Licwellin, Lieut.-Col. J. J.

Sinclair, Col. T. (Queen's U. B'lf'st),

Evans, Capt. A. (Cardiff, S.)

Lumley, Capt. L. R.

Smiles. Lieut.-Colonel Sir W. D.

Everard, W. L.

MacAndrew, Colonel Sir C. G.

Smith, Sir R. W. (Aberdeen)

Flides, Sir H.

MacDonald, Sir Murdoch (Inverness)

Somerset. T.

Findlay, Sir E.

McEwen, Capt. J. H. F.

Somervell, Sir D. B. (Crewe)

Fox, Sir G. W. G.

McKie, J. H.

Somerville, A. A. (Windsor)

Furness, S. N.

Maitland, A.

Southby, Comdr. A. R. J.

Gledhill, G.

Makins, Brig.-Gen. E.

Stanley, Rt. Hon. Lord (Fylde)

Graham, Captain A. C. (Wirral)

Mander, G. le M.

Storey, S.

Gretton, Col. Rt. Hon. J.

Margesson, Capt. Rt. Hon. H. D. R.

Stourton, Major Hon. J. J.

Griffith, F. Kingsley (M'ddl'sbro, W.)

Markham, S. F.

Strauss, H. G. (Norwich)

Grimston, R. V.

Mason, Lt.-Col. Hon. G. K. M.

Stuart, Lord C. Crichton- (N'thw'h)

Gritten, W. G. Howard

Mayhew, Lt.-Col. J.

Stuart, Hon. J. (Moray and Nairn)

Hacking, Rt. Hon. D. H.

Mills, Major J. D. (New Forest)

Taylor, C. S. (Eastbourne)

Hamilton, Sir G. C.

Mitcheson, Sir G. G.

Touche, G. C.

Hanbury, Sir C.

Morris-Jones, Dr. J. H.

Train, Sir J.

Hannah, I. C.

Munro. P.

Tree, A. R. L. F.

Hannon, Sir P. J. H.

Nall, Sir J.

Turton, R. H.

Harbord, A.

Orr-Ewing, I. L.

Wakefield, W. W.

Harris, Sir P. A.

Peake, O.

Walker-Smith, Sir J.

Haslam, H. C. (Horncastle)

Penny, Sir G.

Wallace, Capt. Rt. Hon. Euan

Heneage, Lieut.-Colonel A. P.

Petherick, M.

Ward, Lieut.-Col. Sir A. L. (Hull)

Hepburn, P. G. T. Buchan-

Pickthorn, K. W. M.

Ward, Irene (Wallsend)

Hepworth. J.

Pilkington, R.

Warrender, Sir V.

Herbert, Major J. A. (Monmouth)

Plugge, L. F.

Waterhouse, Captain C.

Holmes, J. S.

Rathbone, J. R. (Bodmin)

Wedderburn, H. J. S.

Hope, Captain Hon. A. O, J.

Reed, A. C. (Exeter)

White, H. Graham

Hopkinson, A.

Reid, W. Allan (Derby)

Wickham, Lt.-Col. E. T. R.

Hore-Belisha, Rt. Hon. L.

Rickards, G. W. (Skipton)

Williams, C. (Torquay)

Howitt, Dr. A. B.

Robinson, J. R. (Blackpool)

Willoughby de E-esby, Lord

Hudson, Capt. A. U. M. (Hack., N.)

Ropner, Colonel L.

Withers, Sir J. J.

Hunter, T.

Ross, Major Sir R. D. (L'derry)

Womersley, Sir W. J.

Jackson, Sir H.

Rothschild, J. A. de

Wright, Squadron-Leader J. A. C.

Jones, H. Haydn (Merioneth)

Rowlands, G.

Young, A. S. L. (Partick)

Keyes, Admiral of the Fleet Sir R.

Russell, A. West (Tynemouth)

Kimball, L.

Russell, R. J. (Eddisbury)

TELLERS FOR THE NOES.—

Lamb, Sir J. Q.

Russell, S. H. M. (Darwen)

Mr. Herbert Williams and Sir Arnold Gridley.

Lambert, Rt. Hon. G.

Salmon, Sir I.

Question proposed, "That the proposed words be there added."
Several HON. MEMBERS rose—
It being after Half-past Seven of the Clock, the Debate stood adjourned.

BRITISH SHIPPING.
7.39 p.m.
Mr. HOWARD GRITTEN: I beg to move,
"That this House, while thanking His Majesty's Government for the efforts already made to assist British shipping, is of the opinion that further measures are necessary to protect British shipping against subsidised foreign competition and also urges His Majesty's Government to confer with His Majesty's Governments in the Dominions with a view to united Empire action for the safeguarding of British shipping."
I ought at the outset to tell hon. Members who are interested in this subject that there has been a movement to try and induce me not to move this Motion. If I were to withdraw it at the last moment, it would be showing disrespect
496
to this House. I cannot so far ascertain what has actuated this movement, but no valid reason has been advanced except that there has been a vague rumour that the Government are engaging in delicate negotiations and perhaps a Debate to-night might prejudice those negotiations. On the contrary, it would seem to me that the hands of the Government would be strengthened in any negotiations if foreign Powers knew that the House of Commons was strongly in favour of the principles and contentions in this Motion. Again, if there is a likelihood of this Debate prejudicing or embarrassing the Government, the Board of Trade would have sent me a direct communication. They have not done so. In the course of a long political life, though an undistinguished one, I have had many experiences of pressure. On each of those occasions I have withstood the pressure, and so on this occasion I intend to stick to my guns and to move the Motion. I am the snore confirmed in that attitude because this matter is of vital national interest. It is not one which ought to be

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subservient to any special or isolated interests. The preservation and strengthening of our Mercantile Marine concerns the safety, the well being and the daily life of every man, woman and child in the country. Therefore it is on account of the national and imperial importance of this subject, that I proceed, and I refuse to be put off.
In connection with what I have just said, I would ask the Minister in charge, when he replies, specifically to give the House an answer to the following questions: (1) Are there any special negotiations proceeding? (2) If so, whether in those negotiations the Government is insisting on better terms for our Mercantile Marine; and (3) when may we expect the report, or is it going to be hung up as so many others have been hung up and are being hung up to-day? The purpose of the Motion is to bring before the House and to emphasise the grave condition of the merchant shipping of this country and the Empire and to endeavour to impress on the Government the necessity of acting up to their repeated assurances and promises without further procrastination and delay. There can be no doubt about the gravity of the situation. Bad as is the state of our merchant shipping already, it continues to undergo a still further dangerous decline. I do not desire to tax the patience of the House with many figures and statistics, but I must pray in aid a few as evidence in support of my proposition.
When one takes foreign shipping, one finds that since 1914 it has been quadrupled in the United States of America, doubled in Italy, Norway, Greece and Japan, and almost doubled in Sweden, France and Holland. In that period, the pre-War period, we possessed nearly half the tonnage of the whole world; now we possess only 30 per cent. Whereas we have declined, the rest of the world has increased 83 per cent. We have 2,000 fewer cargo vessels and 45,000 fewer seamen. In the last year we have gone down 3,000,000 tons, the rest of the world less than 2,000,000 tons. We have still 4,000,000 tons of shipping laid up in our bays and inlets. The result is that foreign competition has intensified and. the foreign share of United Kingdom trade has risen from 34 per cent. to nearly 42 per cent. Once, 8,500 ships flew the Red Ensign. That flag, I regret to say, is being seen less and less on the
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oceans of the world. This means not only a loss of direct trade but a loss in the business of banking, insurance and merchanting which, with the shipping service form essential elements in our invisible exports.
Let me take the timber trade of the Baltic—and this is a matter in which my constituency is specially interested. I I find that of the 85 voyages made this year Russian and foreign ships did all; British ships not one. That timber was bought by us, yet we did not carry one ton of it to our shores. If it is objected that the Soviet Government are now chartering more tonnage, it is only in other trades where they cannot help themselves and have to rely on other sources. The fact remains that Russia has chased us out of the trade in the Baltic and in the Black Sea also. Incidentally, the wages paid to Russian seamen are one-tenth of ours. In a two years period—why that period was chosen by the Board of Trade in answer to a question in this House I do not know—it was stated that whereas we bought £51,000,000 worth of goods from Russia she bought from us only £9,000,000 worth. I remember how optimistic certain Ministers were at the time of the Russian Trade Agreement. They prophesied that by means of that Agreement the grievous adverse trade balance would be redressed, and they predicted that British shipping would be put on a better footing than ever before. The present situation is a sad commentary on those prophecies.
As to unemployment, in prosperous times 200,000 men were employed in the Mercantile Marine. Now there are over 32,500 unemployed. Many of these unemployed, far too many, stand on the quaysides helplessly watching foreign goods being unloaded from foreign ships built by foreign subsidies. We have to add to that unemployment the unemployment in the ancillary trades and occupations. With regard to the shipowners, their loss has been enormous. For seven years their capital has been unremunerated, and to that we must also add the loss and depreciation in their ships which have been laid up. Many companies at the present moment are in the hands of the banks; and they are only continuing on the sufferance of the banks. It must be remembered that after the War they relieved the Government of ex-enemy and

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other tonnage at peak prices in response to a direct appeal. It was no doubt the additions which were thus made to the normal fleets which were a contributory cause of the depression in the industry, whilst at the same time stimulating other countries to build new ships.
May I take, as all other hon. Members do when they have an opportunity, my own constituency. In 1914 in the Hartlepools we had 901,000 gross tonnage; now we have 290,000 tons. In 1914 we had 309 steamers; now we have only 92. At that period there were 41 shipping firms; at the present moment there are only seven, and of these seven survivors some, I believe, have lost half their capital. Hartlepool itself is almost derelict owing to the decline of shipbuilding on which it once existed. We indeed are a very much distressed area. That description, as hon. Members know, applies to most of the North-East coast. Everybody is acquainted with the decay and sufferings of Jarrow. There is grass growing in the shipyards at Jarrow, but I think Hartlepool can beat Jarrow in that respect, because in one shipyard at Hartlepool an apple tree has actually had time to grow. In the near Continental trade there has also been a decline in British shipping. British entrances show a 16 per cent. decrease while foreign entrances show a 23 per cent. increase. In the matter of clearances British shipping shows a 31 per cent. decrease and foreign shipping a 7 per cent. increase.
Let me touch briefly on the crisis in the Pacific. Two lines were running, one the Union Line from San Francisco to New Zealand, and the other the Canadian-Australian Line running between Australia, Fiji and Vancouver. Although the Americans do not allow us to do any coastal trade between Hawaii and the American coast, we have allowed American ships to do coastal trade between New Zealand, Australia and Fiji. I might remark, in that connection, that this country is the only Power which makes no limitations on foreign traffic or foreign ships. The result is that the Union Line has ceased to function, whilst the other line will soon go the same way unless the Government bestirs itself and co-operates with the Dominions in restricting inter-Imperial trade to Imperial boats. I should like to ask the
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Government to inform the House whether they have yet received the report of the committee to which this matter was referred, and, if so, what definite action they propose to take, and when.
Another sphere in which British shipping is suffering almost the same fate is in the Indian and Far East trade. Up to 1911 the whole of the trade from Bombay and Calcutta through the Malay Straits to China was in British hands, whereas now 85 per cent. of that trade is in Japanese hands. One would have thought that the Government would have been able to stop that rotting, backed as we were by the resources of the wealth and huge populations in India and the Straits, but, through the gross remissness and neglect for some 15 to 20 years of the Governments, that trade has passed entirely into the hands of Japan.
May I revert for a moment to Russia? Her tonnage since 1927 has risen from 300,000 tons to 1,350,000 tons. Before the Soviet began their piratical enterprises we had scarcely any tonnage laid up at all and our merchant ships were sailing at a profit, but the Soviet started the world depression by breaking the markets in corn, timber, oil, sugar, pelts and other commodities, thus inflicting grave injury on the purchasing power of many firms and companies in this the world and causing ruin to a great country and many thousands of individuals. Now by the process of turning the other cheek also we are allowing them to oust us from the Baltic and the Black Sea.
Mr. KIRKWOOD: Ts the hon. Member in a position to give us any idea of the working conditions and wages which are paid to the Russian seamen as compared with British seamen?
Mr. GRITTEN: I have already said that the Russian rate of wages is one-tenth of what we pay our own seamen.
Mr. BENJAMIN SMITH: What about the cost of living?
Vice-Admiral TAYLOR: The standard of living.
Mr. GRITTEN: I shall come to that point. Let me give one further example, namely, what has occurred in the Persian Gulf. We lit that Gulf, and bouyed it, and we drove the pirates away, yet the

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Japanese tonnage has risen from 3,500 tons to 50,000 tons in one year—an astonishing jump. And our Government still sits supine. The difficulties which our shipowners have to face are lower running costs, a lower standard of subsistence, currency depreciation and barriers of all kinds, but it is subsidies which constitute the greatest menace. I have found it difficult to ascertain the exact amount paid by our chief competitors, but no doubt some hon. Member may have the information. As far as my investigations have gone I find that Italy pays £4,500,000, France and Germany pay their subsidies on so much a nautical mile, whether the ship is in cargo or in ballast. The United States of America pays at least £6,000,000 a year in subsidies, and their tonnage has increased over 1,000 per cent. since 1913. A French tramp receives £3 per ton per annum subsidy, an Italian tramp £1 per ton per annum, and an English tramp merely 11s.
Besides direct running subsidies, America subsidises building and repairs; a heavy duty is placed on any repairs executed in foreign ports; and, as is well known, there are subsidies on mail contracts. I remember an instance about two years ago when one small mail-bag carried to Auckland cost the United States £2,800. It was carried in what was appropriately known as the "Golden Coast." I am informed that upwards of £2,000,000,000 has been paid in subsidies by our foreign competitors, and I ask how our shipping industry can possibly stand up to such a vast sum. As to our £2,000,000 subsidy, it has been severely cut into by the restoration of the cuts in wages and by the changes in the manning scale, those two items alone in many cases equalling half the allotted subsidy. If the profits of a voyage are added to the subsidy, they often do not meet the normal depreciation. Then, too, one has to aid the years of loss to the debit account.
It is estimated that a sum of £21,000,000 would be required to compete with the foreign subsidies. The Government, through its spokesman in another place, said that such a sum was out of their power; but questions of money are always relative, and it would be a comparatively small sum relatively to the value of the industry as a whole. Moreover, we would get it back in a variety of ways, such as
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increased imports, the increase of what is called export penetration, and through other avenues. When we compare our Budgets with those of our competitors, who are driving us off the seas, it is difficult to see why the Treasury should not make a much bolder stand against foreign subsidies. An increased subsidy should, in my opinion, be one of the prior charges on the revenue of this country. I wonder how many millions of pounds are paid in subsidies to other industries in this country? What will be eventually the cost of Defence? Merchant shipping is a Defence interest, and as such ought to be supported in a much more generous spirit than the Government have exhibited.
Another objection I have to the way in which the subsidy has been granted is that the Government say it is going to cease when the freight rates rise to a certain figure. I submit that the rise in freight rates makes no difference to the general position. We would not have a larger share in the carrying trade of the world, there would be no more goods for us to carry, and our share of the carrying trade would remain the same as long as our subsidy remained the same. Moreover, the Act has another unfortunate rider. It implies that the subsidy is to be discontinued in a year's time. That qualification deprives this year's subsidy of much of its value, because our foreign competitors know that they have to hang on to the throat of our industry only for another year. In my opinion it was childish of the Government to divulge that intention to our competitors. They ought not to have been guilty of such fatuity in dealing with competitors.
I suggest that in any trade agreement or treaty revision a proviso should be made that the cargoes intended for Great Britain should be carried in British bottoms, and that to some extent, at any rate, we ought to revert to the old Navigation Acts of 1651 and 1672, which won for us the carrying trade of the world. There should also be a specific provision in any of those treaties or trade agreements for increases in the purchase of our shipping services. As far as I know, there was no such provision in the much-vaunted Scandinavian Agreements or in the Argentine Agreement. We are now told that there is to be a new Argentine Agreement. Will the Government have

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the sense to get that stipulation inserted in that agreement, especially when it is borne in mind that we buy five times as much from the Argentine as they buy from us, which gives us the whip hand. Some of the worst offenders are those countries with which we have an adverse trade balance. In all such cases we have a commanding position, and with the denouncement of the most-favoured-nation clause, which appears to be utterly antiquated nowadays, we should be free to discriminate. With such a weapon in our hands, I am pretty sure that we should soon be able to force foreigners to lower their subsidies, for it must always be remembered that we are the biggest market in the world for 24 other nations.
On many occasions in recent years we have received honeyed assurances and plausible promises from Ministers. I have a list of them, and it is of considerable length. I will not bore the House by reading it. There are many from various Ministers, and I do not know how many from my right hon. Friend the President of the Board of Trade. Also in the Gracious Speech from the Throne, there was an assurance that His Majesty's Government are giving grave consideration to the question of maintaining an adequate Mercantile Marine. I sometimes wish that that grave consideration would mature into some kind of action. The ruminations of Ministers often remind me of the ruminations of Lessing's owl. The road of the Government to maritime disaster is like the road to another region—it is paved with good intentions. So far the only result has been an inadequate subsidy hedged about and qualified by restrictions and limitations. The mountain has laboured and has brought forth, I will not say the ridiculous mouse of Horace, but an under-sized and presumably short-lived infant, instead of robust quintuplets.
I must not be misunderstood as implying that we have no gratitude for what the Government have done. We frankly acknowledge that the effects of the subsidy have been very beneficial, but that reflection makes us reflect further—on how much more benefit we should have from a larger subsidy. The Motion is an example of a definition of gratitude. It is inspired with a lively sense
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of favours yet to come. I certainly trust that the Government will give their attention to this subject. We are also grateful to the right hon. Gentleman the President of the Board of Trade for his change of attitude. Aforetime he was of the straitest sect of the Free Traders, but he is gradually, perhaps rather hesitatingly and tentatively, but still advancing towards "a larger ether and a diviner air." No doubt, in relaxing his former principles, he agrees with Dr. Johnson's dictum that consistency is the bugbear of small minds. I have no doubt that if the right hon. Gentleman the Member for Epping (Mr. Churchill) were present he would agree with that sentiment.
In conclusion, I would like to repeat that an adequate Mercantile Marine is indispensable to us in peace and still more indispensable in war. Everybody knows that if it had not been for the services and the gallant deeds performed by merchant seamen we would have lost the War. If our statesmen would only resolutely tackle this problem I maintain that they would be doing a far greater service to their country and the Empire than by indulging in profitless palavers at Geneva or futile conferences at other Continental resorts. This is a vital matter. A state of emergency exists. I therefore most earnestly ask Ministers to procrastinate and postpone no longer, but to exhibit a more energetic and a more lively executive sense.
8.14 p.m.
Mr. STOREY: I beg to second the Motion.
My first task, as the representative of an important tramp shipbuilding centre, must be to thank the Government for the British Shipping (Assistance) Act. Although natural impatience may have caused us to criticise the Government's delay in taking action, although we may feel that the use of British materials in ships built with State assistance should be compulsory, we have to admit that that Act has been a very great success, for not only has it enabled tramp owners to reorganise their industry and to equip themselves with modern and up-to-date vessels, but it has been the means of placing a large number of shipyard workers in employment. I do not intend to deal in any great detail with the need for united Empire action, for I realise

505
that that is very largely a problem for Dominion Governments. I only submit that the matter is vital, and that in the interests of this country and the Empire urgent action is a necessity. Our heritage of the sea, particularly in the Pacific, is at stake and the Government as the moral head of the British Commonwealth of Nations ought to give a lead, and not wait for Dominion action. My main purpose is to call the attention of the House to he position of the coastal tramps. By such, I mean small vessels other than coastal liners and those large colliers which ply between the North-East coast and the Thames. These latter classes, by the nature of their work and, let it be said, by their own efficiency, have no real problem of foreign competition to face.
With the small tramps it is another matter. They have a serious problem of foreign competition, and it is a problem which is not fully realised by the country because the Board of Trade figures tend to minimise it. Those figures suggest that the foreign share of the British coasting trade is only between 1 per cent. and 2 per cent. I feel that with regard to the small tramp vessels that figure is misleading. Not only do the Board of Trade figures include the coastal liners and the large colliers which, as I have said, have no problem of foreign competition to meet, but every vessel calling at British ports, even if it only discharges one ton of cargo is entered for the full net tonnage at every port. It is easy to see that, with such methods of compilation, the Board of Trade figures give an entirely wrong impression. Four years ago the British Coasting and Near Trade Shipowners' Association prepared some figures which the Board of Trade accepted. Those figures showed that on certain parts of the coast the incidence of foreign competition for the smaller tramps was over 13 per cent. The Board of Trade figures show that since 1932 foreign competition in the coasting trade has more than doubled. Therefore, I think there is good ground for the statement that, as far as the smaller vessels are concerned, foreign competition now far exceeds even 13 per cent.
I would suggest to the Board that they should compile these figures in a manner which would give more reliable information and enable us to judge the facts fairly. If they did so I am sure that the
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urgent need for steps to rehabilitate this section of the shipping industry would be so clear that delay would be no longer possible. The problem of the coastal tramp is not only one of subsidy. In fact, Holland our principal competitor, gives no direct subsidy at all, but I believe there are grounds for thinking that she gives assistance in the building of modern vessels. The troubles of the coastal tramp are largely those of manning and wages, and—most important of all, I think—modern vessels. British vessels have to pay the National Maritime Board scale and though there is no manning scale, the unions, not without the concurrence of the owners, do set a scale which is higher than that of our foreign competitors. On the other hand, the small Dutch vessel is very often a family concern or is run with a very small crew, one of whom is probably a lad who works for his food and accommodation.
We can see that the British coastal tramp is seriously handicapped in its competition with foreign coastal tramps. Yet I think the main trouble probably is that the foreigners, particularly the Dutch, have small modern and more efficient vessels. During the past six years Holland has increased her tonnage of motor vessels of under 1,000 tons by no less than 66 per cent. We have only increased ours by 46 per cent., and we now have only 266 such vessels, while Holland has no less than 528. Dutch vessels of such size are designed for short trading. Some, indeed, may run between Continental ports and some few more may trade between near Continental ports and British ports, but it is undoubtedly the fact that the greater number of these vessels are particularly designed and built for the British coastal trade. As I mentioned yesterday at Question Time, it was stated by a Board of Trade official in a recent case in the courts that no fewer than 62 of these Dutch vessels are centred on Hull and engaged purely in the British coasting trade. I think there is no doubt that, as Holland continues to build at a faster rate than us, their vessels will continue to replace the small British coastal tramps in the British coasting trade.
What are the remedies which we can apply to meet this situation? I believe that the coastal tramp section of the industry would say that the only method is the reservation of the British coasting trade to British ships, but it would be

507
idle to deny that that is not the view of the whole industry, and that such a remedy is open to serious objection. What other remedies, then, are possible? First, I think, we might consider the extension of the British Shipping Assistance Act or at any rate Part II of that Act, to the coastal tramps so as to enable our coastal tramp owners to benefit from the "scrap and build" policy and to equip themselves with modern, efficient vessels to overtake the lead which Holland has established. Secondly, I should like the board to consider the suggestion of Sir Alfred Read that we should adopt some system of licensing, similar to that which is used to prevent redundant road transport. Let those who want to take advantage of cut foreign rates, seek the sanction of a tribunal, in the form of a licence and let that tribunal consider the grant of such licences in the light of our internal transport requirements and in the light of our national needs. Thirdly, I should like to see it made compulsory that any materials for public works should be carried in British ships. It should also be made a condition of State aid to any industry that the coastal transport of its materials or any goods produced by it should also be in British ships. That I submit, would not be unfair because a State-assisted industry is under a moral obligation not to hurt any other industry.
There are other remedies which have been and could be proposed by those who are concerned in the industry, but I think that those which I have indicated would afford some ground for assisting this sorely tried section of the shipping industry. The main thing which is necessary is action. Our coastal tramps are essential to the country in any time of national emergency, not only as transports, but as auxiliaries to aid the Royal Navy in the defence of our shores. Their numbers now are inadequate to meet that double call, and they will be more inadequate if we allow the Dutch and other nations to supersede us at the rate at which they are superseding us at present.
We must, therefore, I submit, give the coastal tramp a more permanent place in our national transport system, and that, I think, is not unreasonable, for after all the Government are assisting railway transport, they are assisting road transport, and they are assisting air transport
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with subsidies and with credit facilities. Why should they have left out this vital link of the coastal tramp in our national transport system, particularly at a time when our seamen need the employment which foreigners are taking from them and when our shipyard workers could well do with the work of rehabilitating this section of the industry? For these reasons, I ask the House to accept the Motion moved by my hon. Friend, and I ask the Board of Trade and the Government to take action to help the shipping industry.
8.28 p.m.
Mr. BENJAMIN SMITH: I beg to move, in line 1, to leave out from "House," to the end of the Question, and to add instead thereof:
"recognises the necessity for measures to rehabilitate British shipping and to enable it to cope with foreign competition, provided such measures do not result in swelling private profits at the public expense, urges His Majesty's Government to ratify the 1936 International Labour Conventions for seamen relating to hours of work and manning in order to encourage the establishment of uniform conditions and diminish the present unfair competition, and is of opinion that it is urgently necessary to regulate British coastwise shipping on a basis similar to that prevailing with respect to other forms of national transport."
Nothing that I could say to-night could add to the condemnation of the Government that has been afforded by the Mover and Seconder of the Motion. The Mover was at some pains to tell us that every effort had been made to induce him to withdraw the Motion before the House. Why, I wonder? The hon. Member speaks feelingly, for his constituency is in the Baltic trade, but why is it that efforts have been made to get him to withdraw the Motion? Does the Minister know anything of it? Is he in any way responsible for asking, in the light of the Government's promise in the King's Speech to consider the question of British shipping, that this Motion should be withdrawn?
The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin): The hon. Member who introduced the Motion was at pains to point out that he acquitted the Board of Trade entirely of any suggestion that they had brought pressure to bear upon him to withdraw his motion. I welcome it.
Mr. SMITH: That being so, I presume that the hon. Member, in acquitting one

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party, may know the others. Why does he not tell the House who is responsible and who it is that is bringing pressure to bear upon him to keep from the House a discussion that at least more people connected with the industry are very keen about? Who was it that was responsible for his withdrawing that part of the Motion affecting the coastal trade?
Mr. GRITTEN: The Chamber of Shipping.
Mr. SMITH: The Chamber of Shipping certainly was not responsible for the hon. Member for Sunderland (Mr. Storey), because he has spoken on it, even though it has been withdrawn. I take it, therefore, that I shall be in order, since the Motion itself says that the Mover wishes to call the attention of the House to British shipping, which means all British shipping, in mentioning the coastal trade, despite the withdrawal of part of the Motion by the hon. Member for the Hartlepools.(Mr. Gritten). It was interesting to hear the Mover of the Motion, whose heart bleeds for shipping, tell us about our great heritage of the sea and tell us that at one time 200,000 men were employed in this industry and that at this moment there are 35,000 unemployed. Yet we have the President of the Board of Trade and the Parliamentary Secretary telling us, at Question Time in this House, that it is practically impossible to get British seamen for foreign-going ships.
Mr. GRITTEN: That is wrong.
Mr. SMITH: I want the hon. Member to keep on saying that, and if other hon. Members say it too we may perhaps move the Government at last, and especially the President of the Board of Trade. The hon. Member asked the Government what special negotiations are proceeding at this moment, and he seemed to assume that there are some. He talked about "these delicate negotiations." Perhaps the Parliamentary Secretary will tell us what they are. Like the hon. Member for the Hartlepools, I am thirsting for knowledge, and I hope it will be of an order that for once my side of the House can join with the other side in carrying it forward. The hon. Member asked, too, whether the Government are insisting on better terms for the merchant marine. That is an all-embracing
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term. Are seamen included? Do you include the "black squad," in fact, the whole of the people that go to make up the service, not the ownership of the mercantile marine? "Hope deferred maketh the heart sick," and the hon. Member asked, thirdly, Will the findings be held up? He has not very much faith in this Government, evidently.
The hon. Member wrote me a letter telling me that he was omitting a portion of the Motion, and he has given the House at least some idea as to why he had to withdraw that portion, because interests were at work asking for that section to be withdrawn. He mentioned subsidies and said that since the War £2,000,000,000 had been given in subsidies to foreign shipping, but I have never yet been able to find out in this House what Governments have given these subsidies. The only thing that I have been able to find out is that Italy in 1931 paid a sum of 223,000,000 lire and in 1932 70,000,000 lire for a subsidy for freight vessels, having regard to age, tonnage, and length of voyage. I can find no figures for a later date than that. With regard to America, under the Jones-White Acts subsidies for shipbuilding for mixed passenger and cargo vessels of given speed, a subsidy may be granted to tramp vessels. That is for shipbuilding, but the Americans themselves are paying upwards of one-third more wages, with larger crews and better accommodation in all their ships, and that sets off any subsidy that can possibly interfere with the rates on British ships.
Then there is the French subsidy, which is given only to passenger liners. In Britain £2,000,000 has already been allocated for tramp shipping and £10,000,000 under the scrap-and-build scheme. I have been given to understand that that has been a beneficial thing for the hon. Member for Sunderland. Perhaps the Minister will tell us how many ships have been built under that scheme and the total cost. The House may then be in possession of knowledge as to how far the scrap-and-build Act has benefited British shipping. Many figures can be adduced in regard to tonnage. The hon. Member for the Hartlepools told us that tonnage had fallen by one-third since 1913. The fact is that at this moment the tonnage of Great Britain for all sections is about 14,000,000; Italy, 2,500,000; the United

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States, 8,000,000; and France, 2,242,000. These are the only four countries that I have been able to discover which have in some way or another subsidised some portion of their shipping industry.
Mr. GRITTEN: What about Japan?
Mr. SMITH: I cannot give any figures for Japan, but if the hon. Member had them he would have not made the wild statement that since the War £2,000,000,000 has gone in subsidies to foreign ships. What are the facts? I prefer to listen to the man who owns ships. This is a statement by Mr. G. A. Workman, who is a director of the City Line, and he calls it "A good time coming for shipowners." On 17th October he expressed himself as definitely optimistic about the future. In his opinion, unless something unforeseen occurs, this country is due to
"come through a period of prosperity such as we have not had for many years."
At the same time he warned his hearers that export, and not home trade, was the life blood of the liner companies, and that it was incumbent on them to foster it. Then we get Mr. F. A. Southern, managing director of the Hall Line. Speaking at a luncheon on board the company's new ship—I do not know whether it was built under the scrap-and-build policy—he said that trade was improving and that, in his opinion, the prospects were never better than they were to-day. Mr. Stanley Hinde, the managing director of the Dene Ship Management Company, at the launching of another new vessel, expressed the hope that the co-operation enforced by the tramp shipping subsidy would continue. It apparently took the subsidy to teach shipowners that if they wanted to get a reasonable return for their services they had better organise themselves along proper lines and not cut each other's throats as they had done and as competition sets out to foster all the time. When trade is bad, primarily as the result of the Government which they support, we have a policy of embargoes, quotas and tariffs which has forced upon this country an economic nationalism, and that in turn has operated detrimentally to British shipping.
Yet Mr. Hinde says that he hopes—I presume with the possibility of the subsidy after this year gradually fading out
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—that this little remnant of the subsidy will at least be kept going and minimum rates continued. He said that a contributory cause for the heavy trading losses in the past had been "reckless individualism." That must be hurtful to the Parliamentary Secretary to the Board of Trade. When he was on this side of the House he was the man who stood most for individualism. On leaving the ship of Liberalism and going to the other side, and after jettisoning almost every bit of cargo that they had, he and has worthy chief crept along with a keepsake in their breast pockets—individualism and cheap labour. That is the old Liberal doctrine of laissez faire—buy your labour in the cheapest market and, so far as shipping is concerned, sell your services in the dearest market. Mr. Hinde went on to say that if by mutual agreement they could adjust the supply of tonnage to the demand,
"there would be a real possibility of avoiding a repetition of the shipping depression."
Then we have our old friend the Clan Line. They issued a circular dated 22nd October to their shareholders, in which they said:
"The directors have decided to recommend that £150,000 of the general reserve be capitalised and applied in paying up in full 150,000 of the unissued shares."
They are doing very badly, are they not?
"It is proposed that these be distributed as a capital bonus in fully paid ordinary shares on the register at the close of business on the 22nd October, 1930, in the proportion of one new share for every three ordinary shares then held."
Mr. GRITTEN: The hon. Member has been quoting great companies which are wealthy concerns. What about the small owners?
Mr. SMITH: The hon. Member must remember that his Motion talks of British shipping. It does not talk about small British shipping. I am answering the case for British shipping, and I will give the hon. Member enough companies that have paid dividends for the last 14 years to cater for the majority of the foreign-going ships of Great Britain. There has been a great rise in the value of the pound ordinary shares of the Clan Line. From September, 1935, to September, 1936, they had risen from £4 to £8. Since September they have risen to no less

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than £10 10s. That does not look as if the shipping business is a bad business for the ship owners. Taking the hon. Member's own constituency, I have here a return of the West Hartlepool Steam Navigation Company. The statement says that the wisdom of the directors in inconsistently refusing, since the War, to invest the company's funds in new vessels is reflected in the report and accounts. These show: profit, after providing for classification repairs, £65,125, as against £41,319 last year; depreciation, £10,000, as against £4,970 last year; dividend on preferred ordinary shares, 20 per cent., as against 15 per cent., after paying preference dividends. That is one of the Hartlepool companies. The dividend on the deferred ordinary shares was 20 per cent., as against 7½ per cent., and there was a carry-over of £23,089, as against £20,964 a year ago. They are not doing very badly.
Mr. GRITTEN: What about the five small companies which are reduced to one ship and two ships?
Mr. SMITH: I can only say again to the hon. Member that his Motion speaks of "British Shipping," and if he can choose the worst, what is the matter with my choosing the best? A year ago, in addition to the dividends referred to, special dividends of 6.46 per cent. and 21.46 per cent. were distributed on the preferred ordinary and deferred ordinary shares in respect of taxation adjustments. The financial position of this company is an exceptionally strong one, there being over £1,400,000 in cash and realisable securities, and—note this—the company own four steamers. They are getting it from somewhere. The subsidy they took last year, despite these figures, was £9,856 13s.
Let us try another one. Here is a series of cargo liner and tramp companies. I refer again to the Clan Line. Its paid up capital is £1,900,000; reserves, £482,500; the book value of the fleet, £2,347,615. There are 43 vessels of a gross tonnage of 263,000 tons. The amount of profit was £169,750, or 8.93 per cent. Not so bad. [Interruption.] Have I to say to the Parliamentary Secretary as well that the Motion speaks of—
Dr. BURGIN: Certainly not. I was asking the hon. Member a question.
Mr. SMITH: I beg your pardon.
Dr. BURGIN: I was asking whether he was suggesting that the Clan Line vessels were tramps.
Mr. SMITH: Oh, no; the Clan Line as a whole are not tramp vessels.
Dr. BURGIN: Then they are not eligible for subsidy.
Mr. SMITH: The Clan Line took in subsidy £17,608 19s. How did they get it if they are not tramps? I say they run both cargo liners and tramps, and that in spite of the figures I have quoted they collected from the public purse no less than £17,608 19s. Then there is the Elder Dempster Line. I do not want to go through all the balance sheet figures, though I have them, unless the House wishes me to. [How. MOWERS: "Go on."] They have a capital of £2,500,000; there is a reserve fund of £189,000; the book value of the fleet is £2,614,000. They have 40 vessels of 215,485 tons gross. There was a profit of £125,000, and the dividend was 5 per cent. Are their ships tramps or cargo liners? I notice that they took—these unconsidered trifles which these big companies think worth picking up—the very small sum of £1,247 10s. out of the public purse. The Ellerman Lines, another seeker after unconsidered trifles, took £1,215 7s., but only paid a dividend of 3.47 per cent. The case of the Ellerman Lines is rather interesting, because according to their balance sheet at December, 1935, the dividends on the preference and preferred ordinary shares amounted to £75,650 and after providing for these dividends the balance in the profit and loss account to be carried forward was increased by £67,969 15s. 11d. to £1,843,862 12s. 8d. The profit and loss account shows a net profit for the year, after providing for depreciation, of £143,619, balance undivided in respect of previous years £1,775,892 16s. 9d., less dividends paid £75,650. So those companies—oh, the hon. Member for the Hartlepools has gone away.
I can give the House particulars of quite a number of companies. The British and Burmese Company have paid only 4.85 per cent. dividend. The Hogarth Shipping Company took £46,487 2s. from subsidy, put aside £83,000 for depreciation, and paid a dividend of 5 per cent. This is

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not so bad for companies that are going derelict. Then we have the Monarch Line, which took no less than £10,635 of subsidy and paid a dividend of 7 per cent. The Nitrate Producers Company took nearly £20,000 of subsidy and paid a dividend of 6¼ per cent. Then we have the well-known. Tatem Steam Navigation Company, which paid 10 per cent. dividend and took £12,990 out of the public purse. It does appear to me, taking only a few of the figures which I could produce to the House, that shipping is not in a very bad way at this moment, and if the prosperity which has been round the corner for so many years is now on the corner, as we have been told so often from the Treasury Bench, there is no case for demanding an extension of subsidies to British shipping.
The whole difficulty with British shipping and the reason for the increase of foreign tonnage lies in the economic nationalism put into practice by this Government. You cannot shut out other people's goods and expect at the same time that they will buy your goods; and having shut them out you cannot expect that they will use your shipping to the detriment of their own. Therefore, I hold this Government absolutely blameworthy for any difficulties that British shipping is going through. Authorities such as the Liverpool Chamber of Shipping and the Chamber of Shipping itself are for ever telling us that if only we could get back to the policy of international trading the troubles of the shipping industry would be over. Take one case. I believe the President of the Board of Trade is rather proud of the fact that in the case of Argentina he reduced the imports of meat by 35 per cent., but that means 35 per cent. less shipping tonnage. The same thing is happening in every case where quota restrictions are introduced.
I want to ask the Gvernment one question. Perhaps the Minister will tell me I am a little early, but I would rather be early than late. What is to be the attitude of the Government to the International Convention on hours of labour which was carried at Geneva in October of this year? There were eight motions there. The record of the British Government is not a good one so far as that convention is concerned. We are told that subsidies and bad labour conditions and such like are one of the prime reasons
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for the present parlous condition of our shipping industry. In my Amendment I say that one of the means of improving its position is by getting an international agreement on hours of labour and conditions of service. At Geneva the British Government voted for items 1, 5 and 8, out of those eight. Item No. 1 for which they voted was a recommendation for protecting seamen's welfare in port. Item No. 5 was a draft convention concerning sick insurance for seamen. They did not go very far there, because seamen are already under National Health Insurance in this country. They voted for item 8, which was a draft convention for fixing the minimum age of children for employment at sea. I wish they had done it 40 years ago; I should never have been an ordinary seaman on a billy-boy ketch at 15s. a month. However, better 45 years late than not at all. They voted for the-requirement of professional capacity for masters and officers on board merchant shipping. It is a bit peculiar. If the "Queen Mary" were a cargo ship, big as she is, and carried no passengers, it is possible for an uncertificated master to take that ship to sea, but if she were a 25-ton trawler, it would be impossible for him to take that ship unless he were certificated. Perhaps the hon. Gentleman will look into that matter. The British Government voted against it. That is my point. When opportunities are presenting themselves for international efficiency, with standards rather better, the British Government stand against those things; yet when the Government are challenged on the Floor of this House, all they want, they say, is efficiency and high standards of efficiency and service—with low standards of wages, I regret to say.
On the question of holidays with pay, they voted against the following three items. They voted against professional capacity being necessary for masters and Officers on board merchant ships; against a draft convention concerning the liability of the shipowners in case of sickness, injury or death of seamen, and against a draft convention concerning hours of work on board ships and manning. The hon. Member for Sunderland has put forward a solution for the coastal trade, where no manning conditions apply, as hon. Members may know, under 200 tons, which is a small vessel. His claim was that there ought to be

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regulations as to the manning of coastwise shipping. Why do the Government tike this attitude? Why do they go to the country saying that they believe in giving the highest wages and the best conditions for all workers, and yet, when opportunity presents itself, they are the first on almost every occasion to vote against any improvement in the lot of British seamen? In this case it would be world seamen. For instance, since 1920—
Vice-Admiral TAYLOR: Would the hon. Gentleman allow me to ask him a question with regard to wages? Would he tell the House whether any nation, other than the United States, pays as high wages as we do to our seamen, and whether, in the case of the United States, it is not a fact that the ratio it 130 to 100 in this country, for wages
Mr. SMITH: The hon. and gallant Gentleman likes to have a go at me. I have told him twice before that there was a time when he could do so, but not now. Those days have gone.
Vice-Admiral TAYLOR: I am not doing so, and that is not an answer to my question.
Mr. SMITH: I am going to answer the hon. and gallant Gentleman's question. The whole of the Scandinavian countries pay wages equal in a month to British wages. In America, they pay one-third higher wages than in Great Britain. I have already used that figure as a set-off against any subsidy which they give to shipbuilding. I was saying that since 1920 efforts had been made to secure an international regulation of hours and wages. I ask the Government whether it is their intention now to accept the Geneva Convention, which in every case was carried by overwhelming majorities. It would be an act of decency on the part of the Government to say to the world—because this is a world movement so far as shipping is concerned—that, on reflection, they believe that it would be a factor in diminishing international competition, and that it would be wise for them to join with four other countries in implementing this Convention. At least there would be something to the credit of this Government.
With regard to coastal shipping, the hon. Member for Sunderland suggested that it would be a good thing—
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[Interruption.] The hon. Member did so, with reservations. He said that it might not be the best, but the first thing that he mentioned, so far as the coastal trade was concerned, was the reservation of the shipping.
Mr. STOREY: I did not say anything of the sort. I said that the coastal section. of the industry would probably ask for reservation for themselves, but I made it clear that in my opinion there were many objections to it.
Mr. SMITH: The coastal trade have said something entirely different about that, have they not? I have a document here from which I will quote later on, when I am replying to the hon. Gentleman. What is the real trouble in the coastal trade at the moment? The coastal people themselves say that the maximum increase in foreign export trade is 2.1 per cent. That is not a Board of Trade figure but is from the Coastal Development Council. They say that in 1929 it was 5 per cent., that it grew until 1935 to 1 per cent., and that in 1936 it had risen to 2.1 per cent., or a total tonnage increase of 150,171 tons. That was the total tonnages, arrivals and departures, engaged in the carrying of cargo between the United Kingdom and Northern Ireland, during the past seven years.
How does that work out? Holland has made 171 calls. That is a country which is rather bothering the coastal shipping trade of this country, and I think rightly so. The ships are not only efficient, but there is no manning scale there. I know of instances where the skipper and his wife, and the mate and his wife and a boy, walk in and compete with people who have a manning scale. A ship of the same capacity was refused to be allowed to go to sea by a representative of the Board of Trade, because she was under-manned. I have instances, which I will willingly give to the hon. Member, if he likes. Other countries made as much as 56 calls, or as few as one. The significant question is, are they, in fact, genuinely competing with coastwise trade in this country? We know that in two months there were 291 calls of cargo-carrying foreign ships at ports in this country, and that 262 of them either arrived or departed in ballast. If that is a fact, it represents a more or less one-way traffic, and that

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2 per cent. becomes 1 per cent. The incidence of foreign competition in coastwise traffic is therefore not as large as the hon. Member would wish us to believe. I join with him in wanting to eliminate that competition, and I believe that one of the means of doing that would be to adopt a manning scale and a licensing system. I believe that that is one way out. Nobody, I think, has asserted that the coastal trade is in any way subsidised. I do not know whether it is included in the figure of £2,000,000,000 which was given by the hon. Member for the Hartlepools; but let it be said at once that the coastal trade themselves say that they know of no instance in which foreign Governments are subsidising coastal shipping in competition with our own, and the President of the Board of Trade, when questioned in this House, said that he had no knowledge that the Dutch vessels were being in any way subsidised.
I have had occasion to call attention to the firm of Messrs. Everard. In a previous debate I held them to strict accountability in regard to their treatment of a man, but let me nevertheless say this on behalf of that firm, that, while I condemned them for one action, I praise them for another, for, if every coastal shipping company was run on identical conditions, and if all the fleets were as up to date as that of the Everard Company, there would not be much trouble in the coastal trade with competition from foreign people. That is my view, and I am glad to be able to make that statement.
What do we on this side of the House suggest? We suggest that there are very admirable principles which the Government could follow if they are really interested in putting the coastal trade on anything like a basis. The coastal trade of this country is complementary with railways and road transport, and equally is in competition with railways and road transport. This Government and previous Governments, in their wisdom, Let up a statutory board to deal with wages and hours on the whole of the railways of this country, and the decisions of that board carry the force of law once they are agreed to. On the top of that, they set up the Railway Rates Tribunal, which goes into questions of freight rates and so on. In the Road Traffic Act, 1930,
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fair wages regulations were introduced—only for drivers, I regret to say—in the case of passenger vehicles, and maximum hours were fixed. Further, in the Road and Rail Traffic Act, 1933, it was laid down that every commercial goods vehicle on the road should be a licensed vehicle. The licences were divided into three classes, "A," "B" and "C," "A" being the licence-holder who carries other peoples goods; "B," the licence-holder who carries, sometimes his own goods, and sometimes other people's goods; and by far the largest proportion, the "C" licence-holders are those who carry only their own goods. In working out fair wages and maximum hours, standards have been fixed for "A" and "B" licences, and the present Government have set up a tribunal, under the Ministry of Labour, which is going into the question of incorporating, not only hours, but wages, for the "C" licence-holders. I suggest that the President of the Board of Trade might look into these Acts and see whether it is not possible to introduce some such system for the coastal trade of this country.
I gather that the President of the Board of Trade and his Parliamentary Secretary are against reservation as a whole, although we have nine countries, France, Greece, Portugal, Russia, Spain, Turkey, Japan, the United States arid Argentina, which have already reserved that trade. Then we have Holland, Norway, Sweden, Latvia, Germany, Belgium, Finland, Estonia and Denmark, which are the principal foreign countries competing with the British coastal trade. If the Government would look into this question, I think they would find a solution, without tariffs, for the difficulty in the coastal trade, if they have a desire to do so. There is another method. The Government might say that no vessel of any tonnage upwards—not of 200 tons or over, but any tonnage upwards—shall use the ports of Great Britain unless it conforms to a British manning scale. If that were done, no ship which failed to conform to that scale would be able to get into competition with British shipping in this country. These are two suggestions which I offer to the Government.
I am sorry if I have taken up too much of the time of the House. I have plenty more that I could say, but I take it that others will wish to take part in the Debate. We on this side of the House

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thank the hon. Members for the Hartle-pools and Sunderland for braving the Government in bringing forward their Motion. It has given us an opportunity of tabling an Amendment in which we suggest that British foreign-going shipping is not in a bad way taken generally, and that there is no case generally for a subsidy. Subsidies go to the rich and the poor alike; the means test is only applied to working people. Those with dividends of 20 and 30 per cent. get their hands into the public purse with as much ability as, and with more success generally than, the smaller shipowners. If the Government would say they would adopt the International Convention for seamen, and if they would look into the question of manning for the coastal trade, we on this side of the House believe that a solution of the difficulties could be found.
9.14 p.m.
Mr. ERRINGTON: It is a very happy thing that the House has had an opportunity of discussing this very important subject. So far as I am concerned, I think it ranks in importance with the discussions that we had on the Special Areas and in regard to the location of industry. The importance of the shipping industry, particularly for the part of the world that I represent, namely Mersey-side, is tremendous. It is admitted that that particular area is suffering from prolonged unemployment, due in a large measure to the condition of the shipping industry. There is no question at all that the contraction of the import trade has hit the shipping industry very badly. I do not think that is fairly described by the hon. Member for Rotherhithe (Mr. Benjamin Smith) as being due to the action of our Government. I should much prefer to say it is due to a very large number of causes over which no Government has control. I suppose a very large number of people hope that, as a result of the currency agreements, we may get very great expansion in the export trade, but meantime in the area that I am talking about there is a position which requires Government assistance. The taxpayer, whose money it is, is under the tramp shipping subsidy scheme very adequately guarded. In fact the carrying on of certain shipping firms on Merseyside has only been possible owing to that subsidy. The basic year 1929, which is taken, was
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a year which did not bring any undue prosperity to the shipping industry on Merseyside. For the first six months of 1935 the level of freights was only 72 per cent. of the basic year. It is true that the corresponding period for 1936 was 82 per cent., but the first reduction comes only when the average freight level is 93 per cent. of the 1929 standard. The 1929 standard is not a high standard to take. There has been continuous and extensive unemployment for a long period before and in 1929.
The position on Merseyside is that the docks are not working to full capacity, there are numbers of unemployed seamen, there are many officers who are unable to get work, and there are certificated officers who have to go as ordinary seamen. The conditions of the seamen and of the officers have been improved, but I suppose everyone desires that they should be further improved, and particularly does that apply to the officers. The colossal figures of profits that the hon. Member for Rotherhithe talked about are not likely to have been earned on Merseyside. The Third Report of the Tramp Shipping Administrative Committee says:
"As a consequence of this policy there is now little unemployment in this country amongst British white seamen."
Mr. BENJAMIN SMITH: What policy? It is not the policy of subsidy, but the policy of fixing minimum rates, I take it. It has nothing to do with the subsidy.
Mr. ERRINGTON: I submit that this is a general statement which applies to every type of seamen. That, however, is not the case, at any rate so far as Merseyside is concerned. It may well be that there are cases where there is a shortage, but that certainly does not apply to the Liverpool docks. I think the Government ought to consider how they can help in this matter. One realises the objections to subsidies, but to a limited extent, at any rate, Government action has caused some of the difficulties that we are suffering from. One does not blame the Government for that, because it was essential that something should be done, but, bearing it in mind, we are entitled to ask them to give an opportunity to the people who desire work and to the firms that desire a greater trade.

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But I think there is an even more important aspect of this matter, and that is the question of Defence. As I understand it, a great deal of consideration is being paid in these days to the importance of adequately providing for the case of an emergency that would arise in the event of war. I commend to the notice of the Government the importance of the West coast ports. If the next war is in the air, the probability is that the West coast ports will be more easily used than those on the East and, if that be so, it is important to see that they are kept as busily occupied as possible. The importance of man power is very great indeed. You will appreciate that when the emergency comes and the men, be it for engineering or for shipping, are not available. Some of us take the view that the Road and Rail Traffic Act operates largely, in practice, in favour of the railway companies. It may well be that, if there is a war, we shall require a great deal of assistance from road transport. Shall we have the skilled drivers available for this purpose? I doubt it, and I doubt whether, if the shipping industry is allowed to face the full blast of foreign
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competition, we shall have enough efficient seamen.
We are finding on Merseyside that, with the natural enterprise of the Lancastrian, he is going into other types of business. We are getting other industries coming there as much as possible and people getting out of the shipping industry as far as they are able to do so. That may be a most serious thing for the country at large, particularly in the event of war. I suggest that the careful consideration that has been promised in the Gracious Speech should be given not only to the tramp shipping subsidy, which to my own knowledge has done wonderful things in the way of employment and getting ships back to work, but also to the other branches, the coastwise trade and the cargo liner, in order that we may get a strong and virile mercantile marine which will be available for the service of the country when it is required.
Notice taken, that 40 Members were not present; House counted, and 40 Members not being present—
The House was adjourned at Twenty-eight Minutes after Nine o'Clock till To-morrow.