HC Deb 05 July 1938 vol 338 cc325-40

Order for Third Reading read.

Motion made, and Question proposed, "That the Bill be now read the Third time."

10.29 p.m.

Mr. Lees-Smith

I beg to move, to leave out the word "now," and, at the end of the Question, to add the words "upon this day three months."

My friends and myself propose to divide against the Third Reading, and I will indicate briefly what our reasons are. They are that we believe the arrangement which is now being perpetuated was a grave mistake when it was originally made in 1928, 10 years ago. The results of that mistake are being reaped to-night. Instead of retrieving that mistake, the Government, in order to save some temporary difficulties, are taking a course which is bound in a few years to cause them to come to this House in greater difficulties still. I say the arrangement 10 years ago was a mistake. It arose in this way. For years, as the House knows, our telegraph messages overseas used to go by the submarine cable, which I was told when I was at school was one of the seven wonders of the world. About 20 years ago a still greater marvel appeared, the beam wireless telegraph, developed by Signor Marconi, with the assistance and co-operation of the Post Office. The consequence was that the beam stations, through which this new marvel was administered, belonged to the British Post Office, and if the Post Office and the beam stations were to compete freely with the submarine cable companies, the submarine cables would be wiped out and the beam wireless system alone would be left. But this could not be allowed, because the submarine cables were necessary to the country, especially in time of war and emergency. Therefore, they had to be kept alive. Everybody agreed at the time that the best solution was that all the means of sending messages abroad should be under one control—the rationalisation, so to speak, of this method of communication.

Once you accepted the conclusion that all these means of sending messages abroad should be under a single control, look at the problem with which the Government at that time had to deal. There were the submarine cables, under the cable companies. On the other hand, the beam wireless was under the Post Office. The air mail, which was just developing, and other means of communication were under the Post Office. Wireless telegraphy—and here you get the difference between telephony and telegraphy—the Government refused to give up, and that is under the Post Office; and the new possibility of submarine telephony which is developing will inevitably, when it is developed, be under the Post Office. Under those conditions, how could anyone deny that the common sense policy was to let the Post Office, which covered practically all the field, buy out these obsolescent cable companies—which they could have done at a very low rate, because of the circumstances which confronted those companies—and bring them all under one control?

The Government, instead of adopting that obvious policy, followed a doctrinaire policy, because of this fetish in favour of anything which calls itself private enterprise. They decided not to do that, but to pick out the submarine cables and the beam wireless, and put them under a private company; and they created for the purpose this great sprawling, over-weighted combine with a record which becomes worse every year. I ask the House to look at the problem that is left. They do not solve the problem. They create the problem for a few years hence, because it is almost certain that in these overseas communications, as in our own domestic communications, the telephone will push the telegraph into the background. Once again the problem will arise of bringing them under one control. A fresh problem is created by the policy of the Government, who put the telegraphs under the control of the combine, but the telephones are still under the control of the Post Office. So that a division, which is bound to create a problem in the future, was left by the solution at which they at that time arrived. That was the mistake which was made.

The results of that mistake are showing themselves in the financial consequences. The broad financial basis of the arrangement was that the Post Office leased to the new combine these beam wireless stations at a rental of £250,000 a year. They did not give them a freehold, but merely a lease for 25 years at £250,000 a year. The main proposal of this Bill is that the Post Office should give up that £250,000 a year, and in return it is to receive a nominal £2,600,000 out of a total nominal capital of £30,000,000 which constitutes the Communications Company. That means, working it out, that it will in future receive, instead of the £250,000 a year, its 8½ per cent. of the dividends which this combine may earn. We can normally tell the nature of that bargain by the last few years. The very best year in which the combine has made the highest profit will give the Post Office £100,000, and in the poorer years, when it makes lower profits, it will give the Post Office £6,000, so that, in return for the £250,000 a year, we have got equity shares, the annual value of which varies from £6,000 to £100,000. This is obviously a bargain in which the combine is bound to gain, and unless something which no one expects occurs, the State is bound, in the end, to lose.

I remember that there was considerable restiveness in the House when the original proposal was made, and, in the very last speech delivered just before the Bill was passed, the spokesman of the Government pointed out that it was only an arrangement for 25 years, and now, as a byproduct of this arrangement, we find that the combine is to have these stations which the enterprise of the Post Office created for the country and gave the country the freehold. The property of the nation to-night is being given away. I think it is clear now that if the Government or the House 10 years ago had known what they know to-night, they would have accepted the advice of the Labour Opposition at that time, because no one at that date would have consented to an arrangement which 10 years later was going to give away the property of the State to this combine as a freehold for nothing at all.

There are two reasons given by the Government and in the White Paper for this transfer of our property. One reason is that the combine is going to lower its rates for telegrams to the other parts of the Empire. The combine knew when it was formed that any communica- tions company in its administration always has to be lowering its rates, and for the lowering of its rates it expects a return. In fact, at the last annual meeting of shareholders the chairman said that they expected a return for this lowering of rate to come in time, through increased business. The other reason given is that the Communications Company, or Cable and Wireless, Limited, whichever we call it, has during the last 10 years had a most unfortunate financial history. On that I would say two things. One reason for that unfortunate financial history has been their own maladministration.

I experienced it when I was at the Post Office. This company is overcapitalised; nobody denies that. It was distracted by internal conflicts between the wireless side and the cable side, it had an enormously swollen board of directors, and when I was at the Post Office I came to the conclusion that a large part of its misfortunes was due to the fact that it gave so much of its attention and energy to wirepulling and propaganda against the Post Office that it was not able to carry on its ordinary business. As soon as my career ended at the Post Office the combine asked Mr. Wilfrid Green to look into its unfortunate position, and without difficulty he suggested a saving of £1,250,000 a year. If this company had had the beam stations from the beginning and had never paid one-halfpenny rent, they still would have been in financial difficulties, owing to their own expensive internal administration. Apart from these considerations, why should we make concessions to a combine because they have had an unfortunate financial record? They knew what they were doing when they entered into the business. They entered into it with their eyes open. They were not forced into it. They almost killed each other to get the bargain which they thought was being offered to them, and, like any other private enterprise, they must abide by the consequences.

I think I said in the Second Reading Debate that a Labour Administration would never have passed a Bill of this sort. Since then I have looked up what did happen when we were in office, and I will read the actual line we took when a similar proposal was made that we should give concessions to this Communications Company, because its rates to some extent were controlled, and because of its unfortunate circumstances. Let me read the reply which I made to that proposal: I would like to point out that Communications Company accepted these obligations at the time in return for certain financial rights which they thought would be so valuable that when it was known that they were to have them there was a boom in their shares on the Stock Exchange. Now that the contract has been made I entirely repudiate that it is my duty to hand over these financial rights, which form no part of the original arrangement and which can only be handed over at the expense of the nation as a whole. That shows the difference between the attitude of one administration and another, and I say that that response, and not the response which the Government are making to-night, is the one which shows a proper regard for the property of the nation.

10.47 p.m.

Mr. White

I do not dissent at all from the description which the right hon. Gentleman has given of the various changes which have taken place between the arrangements of 10 years ago and our discussion of this Bill to-night. The financial history of this combine and all these changes do present the very widest possible target for criticism. The right hon. Gentleman has said that if in 1928 we had the knowledge and experience we now have there is little doubt that the attitude and advice which the Labour party then gave would have been accepted. That, I think, is a very safe conclusion to draw. The whole financial history of this concern has been one series of miscalculations and errors, which if they are not without a parallel must at all events stand very high in the record of financial calamities. But we are not, in considering the Third Reading of this Bill concerned to pass criticism on the past or to say what form the control of Imperial communications should be in the future. I do not dissent from the logic of what the right hon. Gentleman has said with regard to the future development and control of our Imperial communications, but there are two things which will certainly make it necessary for Parliament to consider these matters at a very not distant date. One is that the telephones are under separate control, and it is only logical to compel a unification of all our communications either under the Post Office or under some form of public utility company closely allied with the Post Office. That seems to me to be a very likely development, but there is another reason, purely financial, why Parliament will have to consider these matters again.

There is a limitation in the Bill of the standard profit to a rate which, in view of the experience of the last 10 years, is an optimistic rate of 4 per cent. That is the limit of interest on the upper scale. The limit the other way is zero. That is not a very advantageous arrangement to anybody who has invested money in the past or who may contemplate investing money in the future, and the possibility that even the 4 per cent. may not be obtained means that no set of people in the future will invest money in this concern. If it requires additional capital to live and grow, as it will, nobody but the Government will put more money into this concern on an equity basis. That will, I think, compel a reconsideration of the finances at a not very distant date.

But there is one point which seems to me to be of immediate importance. It is a very great and real immediate advantage to have a flat rate for telegrams between all the Imperial countries and, furthermore, that that rate should be at a reasonably low level. It is true that it is not a complete flat rate, because there are one or two exceptions but, as I understand the policy, it is that those lower rates shall remain an exception only until such time as the general flat rate may be brought down to them. That seems a very important consideration. Also the limitation of the standard revenue, and in fact the whole arrangement, seems to be one stage in the direction of bringing this combine nearer to a public utility basis. Having regard to the fact that we are not to-night expressing a judgment on the mistakes of the past and that we have certain material advantages which will accrue through the passage of the Bill, I shall not be able to take the responsibility of voting against it.

10.52 p.m.

Mr. Benson

I can see that the hon. Member for East Birkenhead (Mr. White) has been reading very carefully the case put up by the Government for the Bill, and has been taken in by it. The only justification that the Government have put up for the Bill is that they have obtained a reduction in rates amounting approximately to £500,000 a year from Cable and Wireless, Limited. That might be a reasonable justification if the Government had obtained it from a company which was in a position to refuse it. The picture that the Assistant Postmaster-General has consistently painted on this subject has been something of this kind: a strong limited company capable of maintaining its rates, and of negotiating upon the subject of rates on equal terms with the Government, the Government approaching the company and asking in the national interest that there should be a reduction of telegraph rates, then coming back to the House and saying, "We have obtained a reduction of £500,000 in rates and, although we are sacrificing £250,000, we have arranged that the company shall suffer another £250,000 reduction."

That is the picture that has taken in the hon. Member. That would have been, were it a true presentation of the facts, a fairly strong justification at any rate for the sacrifice of revenue, but, unfortunately for the Government, just before the Second Reading there was the annual meeting of Cable and Wireless Holdings, Limited, and Lord Pender had to meet the shareholders of this ramshackle company, many of them having invested their money in heavily watered stock, having had continual disappointment as to dividends and having seen in the papers an announcement that rates were to be cut by £500,000 a year. Lord Pender had to justify his position, and he did so most indiscreetly for the Government. He let the cat out of the bag; he gave the real position. By taking the known facts and Lord Pender's indiscretions, we can paint an entirely different picture from that which the Government have tried to present to us, and one which, I think, is far more in accord with the facts.

Here was no strongly placed company capable of maintaining its rates. On the contrary, it was a great ramshackle concern, dropsical with watered capital, having only one profitable asset, and that a wasting one—the beam lease. From the very beginning, it had been overcapitalised on a fantastic basis, and it had to charge high telegraph rates in the hope of paying a reasonable dividend upon its watered capital. Those high rates produced a very natural result, a crop of competitive companies in other countries, which ate into the traffic receipts of Cable and Wireless, Limited, which reduced their revenue and which compelled them continually to fix lower and lower traffic rates. That was the position. Furthermore, that growing competition made it inevitable that there should be heavy reductions of rates in the future.

That company went to the Government and said, in effect, "Unless we can get some help we cannot pay profits on our fantastically watered capital; our traffic is going to our competitors, who are charging lower rates, we shall have to reduce our rates; get us out of the mess we are in." The Government said: "Certainly, take everything we have got; we have a rental of £250,000 a year—take that; we have the freehold of the beam wireless—take that; there is an odd £35,000 which you owe us for Kenya—take that; and in addition, we will negotiate for you a monopoly within the Empire." What have the Government got for all that? They have got a block of watered shares which are estimated to be worth about 12s. in the £ discount. I suggest that that is the real picture of the negotiations, and all the geniality and obscurities of the Assistant Postmaster-General will not be able to alter it. It may be true that in the circumstances in which we are we have to maintain Cable and Wireless, Limited, that we have to maintain our communications on a sound basis; but if it is necessary to maintain those communications financially sound, why were not steps taken in 1928 to stop the appalling financial jugglery at the inception of that company?

If the Government demand that Cable and Wireless, Limited, shall be treated as a quasi public utility company—that is the Government's phrase—if they claim that Cable and Wireless, Limited, shall have the rights and benefits of a public utility company, I think we are entitled to demand that they shall conform with the morality of a public utility company. If they are a public utility company, why was their flotation allowed to take the worst form of bucket-shop flotation? Had there been a sound flotation, had they been compelled to capitalise upon a sensible basis, had they been compelled to issue capital which had some relation to their assets, instead of issuing to the public a capital of some £52,000,000, with assets amounting to £12,000,000 or £13,000,000, there would have been no need at the present time for the Government to make this sacrifice of national assets. Had they been properly capitalised in the first place, they would have been in a position to cut rates and to meet competition, and they would have been in a position to pay a dividend upon a reasonable capital.

There is one other point that I want to make. We can forget all the past, we can admit that Cable and Wireless Holdings, Limited, are in their present mess because of financial juggling, we can admit that the Government must come to their assistance to the extent of £250,000 a year—we can admit all this for the sake of argument—but that does not justify the handing-over of the freehold of the beam wireless, because that cannot have any effect on the financial status of the Company for another quarter of a century. The possession of the freehold makes no difference to their financial position now. It does not help them. It is wantonly handing-over public property to a private, limited company, and a private, limited company with a rather disgraceful past. We have said in the past that we do not agree with it, and we said on the Second Reading that we do not propose to be bound by it in the future. There is only one result that can come from it, and that is that a quarter of a century hence this Company may try to claim entirely unwarranted and unwarrantable compensation from the Government when the beam wireless is resumed. If a Labour Government are in office, it will not get it.

11.2 p.m.

Mr. Viant

I should be lacking in my duty if I were not to offer some opposition to the Third Reading of this Bill. While sitting here, I have been thinking that possibly the Assistant Postmaster-General will feel somewhat embarrassed at having to make out a case for the handing-over of this property. On each occasion when he has addressed this House on business concerning the Post Office he has always advanced the argument that his Department was 100 per cent. efficient, and I think the House and the country appreciate the fact that from the Post Office we get extraordinarily good service. I can hardly imagine the Assistant Postmaster-General attempting to make out a case this evening to justify the handing-over of this business to a private concern, in view of what he has hitherto said concerning the business acumen of the Post Office. I take his view, rightly or wrongly, that he must himself, when he is arguing the case for the handing-over of this business to a private trading concern, as it were underestimate and decry, which is much worse, the business efficiency of his own Department.

I rather feel that the Assistant Postmaster-General, according to the speeches which he has made in this House, should have been standing at that Box this evening putting forward a case for the retention of these services by the State, because the whole history of the Post Office goes to prove that, as far as the services rendered by the Post Office are concerned, they have improved their efficiency, and, what is more important, they have been made more economical and cheaper for the community. Had this combine been efficient, one would have listened with interest to the case advanced for handing over this service to it, but in no sense can it be proved, or even said with justification that it has proved efficient. Its whole history proves the contrary. Those of us who sit on this side of the House feel from that point of view alone, that there is no justification for transferring this vital service to a concern which has shown itself in the past to be inefficient.

If the Assistant Postmaster-General proposes to make out a case in defence of this Bill on the ground of efficiency, we shall listen to him with considerable interest, but I am persuaded that it is not possible to make out such a case. Figures have been given to the House as to the amount of capital value which is being handed over to the company. When the Financial Secretary spoke in 1928 on this subject, he was challenged to give an estimate of the capital value of the beam wireless service and he estimated that at that time it was worth no less than 4,000,000. I am prepared to say that it is worth far more to-day. Let the House consider for a moment the sacrifices that have already been made to enable this combine to render service to the community. Under the former agreement cables that had cost the community no less than £7,000,000 were handed over gratis to this combine. Now on the Financial Secretary's figures of 1928 we are handing over property which must be worth at least another £4,000,000. In the aggregate, £11,000,000 of capital value is being transferred to this combine out of what has hitherto been public property. It is nothing other than a wholesale plundering of public property.

On the last occasion when we discussed this matter I quoted certain words of the right hon. Gentleman the Member for Epping (Mr. Churchill). I do not propose to repeat them. Those who were present on that occasion will remember what I then said. I only add that the Government at present are evidently prepared to dig deeply, and still more deeply, into the public purse in order to bolster up private enterprise, yet in spite of the spoonfeeding which private enterprise is receiving from the Government, there is scarcely a sign of efficiency forthcoming. On those counts alone, we are justified in opposing the Third Reading of the Bill. I shall await with interest the Assistant-Postmaster-General's defence of private enterprise in this case and his effort to show the House that this combine can do this work more efficiently than the Post Office could have done it.

11.10 p.m.

The Assistant Postmaster-General (Sir Walter Womersley)

I am sure that every right hon. Gentleman and hon. Gentleman envies my task in replying to the Debate, because it will be in large measure a repetition of arguments that have been advanced before. I make no complaint on that score, because no one moved any Amendment to the Bill on the Committee stage. The hon. Member for West Willesden (Mr. Viant) asked me whether I was not embarrassed at having to stand at this Box and defend this arrangement entered into by the Government, in conjunction with the Dominions, with Cable and Wireless, Limited. I acn assure the House that I am not in the least embarrassed. I have a good case to put before the House, and I must say I thank the hon. Member for East Birkenhead (Mr. White) for his words of kindness in the latter part of his speech.

Let us look at the history of this business. The right hon. Member for Keighley (Mr. Lees-Smith) said the arrangement entered into in 1928 was a mistake, but let us look at what that arrangement was. There was an Imperial Wireless and Cable Conference held between representatives of the Governments of the United Kingdom, Canada, Australia, New Zealand, South Africa, Eire, India and the Colonies and Protectorates. That conference recommended that the lease of the beam wireless stations should be granted to Cable and Wireless, Limited. This was not a decision of His Majesty's Government; it was a decision taken in conjunction with all the Dominions, Colonies and Protectorates. The object of it was to provide for cooperation among Empire Governments for the maintenance and development of the overseas cable and wireless system of the Empire operating through private enterprise in the United Kingdom under quasi-public utility conditions. That is the reason these services were placed in the hands of Cable and Wireless, Limited. Very stringent measures of control were put upon the operations of the company as recommended by this conference. They were put under an obligation to maintain cables which might be required for strategic purposes; the chairman of the company had to be approved by the Government; the Government retained the power to take over the whole of the company's staff and plant in time of war; the Imperial Communications Advisory Committee, on which various countries of the Empire were represented, was set up; and the company could not increase sales or dispose of its assets without the consent of that committee.

Those who brought forward the scheme in 1928, bearing in mind the conditions then obtaining, and the desire for unity as between various sections of the Empire, did the right thing in handing over to this company. There was approval for this Bill by all the Governments concerned, and I think that that decision was a right one. There is in the new arrangements no departure from the fundamental principles in this matter, largely because it is not just a question of communications between this country and, say, Australia and New Zealand, because there are communications between one Dominion and another. I am sure that my right hon. Friend will agree that the British Post Office could not very well control them without the consent of the Dominions, and the conference agreed that it would be better not for one Gov- ernment or another Government to have control but that a company under the control of this advisory committee should operate the services. I submit that they were wise in coming to that decision.

My right hon. Friend asked a question as to the financial arrangements, and the hon. Member for East Birkenhead wanted to know something about the revision of the standard revenue. The alteration in the economic position is recognised by reducing the standard revenue figure from £1,865,000, which admittedly has never been attained, to £1,200,000. The benefit of any profits in excess of the standard revenue will be shared between the company—and there the Government, as a shareholder, will benefit—and the users of the system in the form of rate reductions. The holding company have recognised the changed position by reducing the ordinary stock from £29,471,180 to £6,883,103 and the total issued capital from £46,000,000 odd to £23,000,000. That deals with the allegations about watered capital and overcapitalisation. It is well known that in the early days of the cable companies there was a vast expenditure on pioneer work and the capital subscribed at that time did in the long run overweight these companies. From time to time adjustments have been made, and though they were fairly made no doubt they have meant that certain people who invested money in the early days have lost it, and those foolish people who purchased shares at a later date owing to some rumour that the Government were going to assist the company have also undoubtedly lost money.

But the directors of the company or the Government cannot be blamed for that. If people will be foolish enough to gamble on a chance of that kind they must take the consequences. [Interruption.] I am speaking about the allegations that the shares bounded sky-high as soon as the rumour got around that the Government were coming to the assistance of the company. I am not speaking about the original shareholders, who would undoubtedly invest their money in the hope of receiving a fair profit. It s not the fault of the Government if people pay inflated prices for shares. There is a lot of nonsense talked about watered capital. If I had had time I should like to have replied to the hon. Member for Chesterfield (Mr. Benson) and the hon. Member for West Willesden on the subject of private enterprise versus State control. I agree with the hon. Member for West Willesden that the Post Office is an efficient service, but if I could quote to the House not the profits only which the Post Office made but the losses which were made in the past and the years in which they were made a very different picture would be presented. [Interruption.] I am proud of the progress which has been made by the Post Office during the time that my right hon. Friend has been in office, and during the term of office of my right hon. Friend the present Secretary of State for Air who preceded him, and may I say, with all due modesty, of myself.

Question put, "That the word 'now' stand part of the Question."

The House divided: Ayes, 184; Noes, 113.

Division No. 270.] AYES. [11.20 p.m.
Acland-Troyte, Lt.-Col. G. J. Brown, Brig.-Gen. H. C. (Newbury) Culverwell, C. T.
Agnew, Lieut.-Comdr. P. G. Bull, B. B. Davies, C. (Montgomery)
Albery, Sir Irving Burgin, Rt. Hon. E. L. Dixon, Capt. Rt. Hon. H.
Anderson, Rt. Hn. Sir J. (Sc'h Univ's) Butcher, H. W. Dodd, J. S.
Anstruther-Gray, W. J. Butler, R. A. Doland, G. F.
Apsley, Lord Campbell, Sir E. T. Dorman-Smith, Major Sir R. H.
Aske, Sir R. W. Carver, Major W. H. Drewe, C.
Astor, Major Hon. J. J. (Dover) Cary, R. A. Duckworth, W. R. (Moss Side)
Astor, Hon. W. W. (Fulham, E.) Channon, H. Duggan, H. J.
Baldwin-Webb, Col. J. Christie, J. A. Eastwood, J. F.
Beamish, Rear-Admiral T. P. H. Clarke, Colonel R. S. (E. Grinstead) Eckersley P. T.
Beaumont, Hon. R. E. B. (Portsm'h) Cobb, Captain E. C. (Preston) Edmondson, Major Sir J.
Beechman, N. A. Colman, N. C. D. Ellis, Sir G.
Bernays, R. H. Colville, Rt. Hon. John Elliston, Capt. G. S.
Birchall, Sir J. D. Cooper, Rt. Hn. A. Duff (W'st'r S. G'gs) Emmott, C. E. G. C.
Bossom, A. C. Cox, H. B. Trevor Emrys-Evans, P. V.
Boulton, W. W. Critchley, A. Errington, E.
Bower, Comdr. R. T. Croft, Brig.-Gen. Sir H. Page Evant, D. O. (Cardigan)
Boyce, H. Leslie Crooke, Sir J. Smedley Fildes, Sir H.
Braithwaite, Major A. M. Crookshank, Capt. H. F. C. Findlay, Sir E.
Briscoe, Capt. R. G. Croom-Johnson, R. P. Fremantle, Sir F. E
Brown, Col. D. C. (Hexham) Crowder, J. F. E. Fyfe, D. P. M.
Gibson, Sir C. G. (Pudsey and Otley) Magnay, T. Seely, Sir H. M.
Gluckstein, L. H. Manningham-Buller, Sir M. Selley, H. R.
Glyn, Major Sir R. G. C. Margesson, Capt. Rt. Hon. H. D. R. Shakespeare, G. H.
Goldie, N. B. Mayhew, Lt.-Col. J. Shaw, Major P. S. (Wavertree)
Gower, Sir R. V. Mellor, Sir J. S. P. (Tamworth) Shaw, Captain W. T. (Forfar)
Greene, W. P. C. (Worcester) Mills, Major J. D. (New Forest) Simon, Rt. Hon. Sir J. A.
Griffith, F. Kingsley (M'ddl'sbro, W.) Mitchell, H. (Brentford and Chiswick) Sinclair, Rt. Hon. Sir A. (C'thn's)
Grigg, Sir E. W. M Morris-Jones, Sir Henry Smith, Sir Louis (Hallam)
Grimston, R. V. Morrisson, G. A. (Scottish Univ's.) Somervell, Rt. Hon. Sir Donald
Guest, Lieut.-Colonel H. (Drake) Muirhead, Lt.-Col. A. J. Spens. W. P.
Harbord, A. Munro, P. Stewart, J. Henderson (Fife, E.)
Haslam, Henry (Horncastle) Nall, Sir J. Stourton, Major Hon. J. J.
Haslam, Sir J. (Bolton) Neven-Spence, Major B. H. H. Strauss, H. G. (Norwich)
Heilgers, Captain F. F. A. Nicholson, G. (Farnham) Stuart, Hon. J. (Moray and Nairn)
Hely-Hutchinson, M. R. Nicolson, Hon. H. G. Sueter, Rear-Admiral Sir M. F.
Heneage, Lieut.-Colonel A. P. O'Neill, Rt. Hon. Sir Hugh Tasker, Sir R. I.
Hepworth, J. Palmer, G. E. H. Tate, Mavis C.
Higgs, W. F. Peat, C. U. Thomas, J. P. L.
Holdsworth, H. Petherick, M. Thomson, Sir J. D. W.
Hope, Captain Hon. A. O. J. Pickthorn, K. W. M. Thorneycroft, G. E. P.
Hopkinson, A. Porritt, R. W. Titchfield, Marquess of
Horsbrugh, Florence Procter, Major H. A. Turton, R. H.
Hulbert, N. J. Raikes, H. V. A. M. Wallace, Capt. Rt. Hon. Euan
Hunloke, H. P. Ramsden, Sir E. Ward, Lieut.-Col. Sir A. L. (Hull)
Hunter, T. Rathbone, J. R. (Bodmin) Waterhouse, Captain C.
Hutchinson, G. C. Rayner, Major R. H. Watt, Major G. S. Harvie
Jones, Sir H. Haydn (Merioneth) Reed, A. C. (Exeter) Wedderburn, H. J. S.
Jones, L. (Swansea W.) Reid, J. S. C. (Hillhead) Wells, Sir Sydney
Kerr, J. Graham (Scottish Univs.) Reid, W. Allan (Derby) White, H. Graham
Keyes, Admiral of the Fleet Sir R. Remer, J. R. Whiteley, Major J. P. (Buckingham)
Kimball, L. Roberts, W. (Cumberland, N.) Williams, H. G. (Croydon, S.)
Lees-Jones, J. Ropner, Colonel L. Windsor-Clive, Lieut.-Colonel G.
Leighton, Major B. E. P. Ross Taylor, W. (Woodbridge) Womersley, Sir W. J.
Levy, T. Rowlands, G. Wood, Hon. C. I. C.
Lipson, D. L. Royds, Admiral Sir P. M. R. Wragg, H.
Llewellin, Colonel J. J. Russell, Sir Alexander Wright, Wing-Commander J. A. C.
Lloyd, G. W. Russell, S. H. M. (Darwen)
Lyons, A. M. Salmon, Sir I. TELLERS FOR THE AYES.—
M'Connell, Sir J. Salt, E. W. Captain Dugdale and Mr.
Macdonald, Capt. P. (Isle of Wight) Sassoon, Rt. Hon. Sir P. Furness.
McKie, J. H. Scott, Lord William
NOES.
Adams, D. (Consett) Hall, J. H. (Whitechapel) Poole, C. C.
Adams, D. M. (Poplar, S.) Harvey, T. E. (Eng. Univ's.) Price, M. P.
Alexander, Rt. Hon. A. V. (H'lsbr.) Hayday, A. Pritt, D. N.
Anderson, F. (Whitehaven) Henderson, A. (Kingswinford) Richards, R. (Wrexham)
Attlee, Rt. Hon. C. R. Henderson, J. (Ardwick) Ridley, G.
Banfield, J. W. Henderson, T. (Tradeston) Ritson, J.
Barnes, A. J. Hicks, E. G. Robinson, W. A. (St. Helens)
Barr, J. Hills, A. (Pontefract) Sexton, T. M.
Batey, J. Jagger, J. Silkin, L.
Benn, Rt. Hon. W. W. Jenkins, A. (Pontypool) Silverman, S. S.
Benson, G. Jenkins, Sir W. (Neath) Simpson, F. B.
Broad, F. A. John, W. Smith, Ben (Rotherhithe)
Brown, Rt. Hon. J.(S. Ayrshire) Johnston, Rt. Hon. T. Smith, E. (Stoke)
Buchanan, G, Jones, A. C. (Shipley) Smith, Rt. Hon. H. B. Lees- (K'ly)
Cape, T. Kelly, W. T. Smith, T. (Normanton)
Charleton, H. C. Kennedy, Rt. Hon. T. Sorensen, R. W.
Cluse, W. S. Kirby, B. V. Stephen, C.
Collindridge, F. Lansbury, Rt. Hon. G. Stewart, W. J. (H'ght'n-le-Sp'ng)
Cripps, Hon. Sir Stafford Lathan, G. Strauss, G. R. (Lambeth, N.)
Daggar, G. Lawson, J. J. Taylor, R. J. (Morpeth)
Dalton, H. Leach, W. Thurtle, E.
Davidson, J. J. (Maryhill) Lee, F. Tinker, J. J.
Davies, S. O. (Merthyr) Leslie, J. R. Tomlinson, G.
Dobbie, W. Logan, D. G. Viant, S. P.
Dunn, E. (Rother Valley) Lunn, W. Walkden, A. G.
Ede, J. C. McEntee, V. La T. Watkins, F. C.
Edwards, Sir C. (Bedwellty) McGhee, H. G. Watson, W. McL.
Fletcher, Lt.-Comdr. R. T. H. McGovern, J. Welsh, J. C.
Frankel, D. Maxton, J. Westwood, J.
Gardner, B. W. Milner, Major J. Whiteley, W. (Blaydon)
Graham, D. M. (Hamilton) Morrison, Rt. Hon. H. (Hackney, S.) Wilkinson, Ellen
Green, W. H. (Deptford) Nathan, Colonel H. L. Williams, T. (Don Valley)
Greenwood, Rt. Hon. A. Noel-Baker, P. J. Windsor, W. (Hull, C.)
Grenfell, D. R. Oliver, G. H. Woods, G. S. (Finsbury)
Griffiths, G. A. (Hemsworth) Paling, W. Young, Sir R. (Newton)
Griffiths, J. (Llanelly) Parker, J.
Groves, T. E. Parkinson, J. A. TELLERS FOR THE NOES.—
Guest, Dr. L. H. (Islington, N.) Pearson, A. Mr. Mathers and Mr. Adamson
Hall, G. H. (Aberdare) Pethick-Lawrence, Rt. Hon. F. W.

Question put, and agreed to.