DEBATE ON THE ADDRESS. [SIXTH DAY.]

HC Deb 07 December 1939 vol 355 cc867-989

Order read for resuming Adjourned Debate on Question [28 th November]: That an humble Address be presented to His Majesty as followeth: Most Gracious Sovereign, We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament."—[Captain Marsden.]

Question again proposed.

4.6 p.m.

Mr. Owen Evans

I beg to move, at the end of the Question, to add: But humbly regret that the Gracious Speech contains no indication that Your Majesty's advisers are taking adequate measures to enable the country to add to its financial strength by the development of the export trade; and deplore the many unnecessary and unco-ordinated restrictions which are hampering exporters, making it difficult for them to retain their normal trade as well as depriving them of the chance to exploit markets hitherto in the hands of Germany. I think it will be recognised on all sides of the House that the Amendment deals with a subject of vital importance for the country at the present time. The position of the export trade has been the subject of serious representations, both in questions and in speeches in this House. It has provoked earnest discussions in the leading organs of the Press in this country, in quarterlies, weeklies and the daily Press. Commercial and industrial organisations are fully alive to the shrinkage of the export trade since the beginning of the war, and to the dangerous situation that is bound to arise unless the shrinkage is checked before it goes too far. I do not need to trouble the House with detailed figures. It is sufficient for me to recall to the House one figure alone which was given, in answer to a question in this House yesterday, by the Secretary of the Department of Overseas Trade. He said in answer to an hon. Member that the volume, in value, of exports from this country in the months of September and October of this year combined, were only just over one-half the exports for the two corresponding months in 1937.

It is a fact that individual traders throughout the country, who collectively have been the mainstay and the sheet-anchor of the export trade, are deeply concerned and even agitated. I may say that since this Amendment was put on the Paper, I myself have had many letters from traders complaining of their difficulties and saying that their trade with foreign countries is going, if not already gone, to nothing. It is quite true that many of these people represent comparatively small concerns individually, and it may be said that they are concerned mainly with the loss to them of their own livelihood; but let us not forget that the total production of the small manufacturers and the combined work of the merchants in the City of London and elsewhere who export goods on their behalf, represent a vast amount of export business. Though they may be concerned primarily with their own livelihood, their work is essential to the national effort in maintaining the lifeblood of the nation. I therefore hardly need to apologise for raising this matter at this time so as to give the Government, through the President of the Board of Trade, an opportunity—we want an opportunity—to explain Government policy to the House. I say without any exaggeration that the terms of my Amendment are really justified, in view of the widespread misgiving in the country, in commercial and financial circles, that the Government are not making the best effort to maintain the economic strength of the country by the development and maintenance of export trade, indeed that they are in many respects, by a system, as the Amendment states, of unco-ordinated control and restrictions, actually to the detriment of the nation, making it almost impossible and impracticable to carry on the export trade at the present time.

There is no need for me to emphasise the importance to this country of exports for many decades before the war. It is true that we have maintained a larger industrial population than any other country in the world, in proportion to the total population, at a relatively high standard of living, that we have been able to obtain half of the total requirements of our foods from abroad and in large measure the raw materials for our industry, and in addition to that have managed to build out of our savings an enormous foreign asset in the shape of our investments abroad, which were of immense and incalculable service to us in the last war. Without those exports nothing of that kind would have been possible. On the contrary our population would have been much smaller and poorer and Great Britain would have been an insignificant Power in the world. Those are facts which, I assume, are generally recognised, but I am afraid that it is sometimes forgotten that the importance to Great Britain of exports is not diminished in war time. If in peace export was essential to Britain for the rapid growth of her economic life, it is vital in war in order to preserve the nation's very life. There can be no two opinions about that.

Herr Hitler is reported to have said a little while ago, with regard to his own country, "We must export or die." In truth we can say of Great Britain to-day—it is for us to remember it—that we must continue to export or it will go very hard for us in this war and after the war. If we do not die, we shall certainly languish. Trade, of course, flourishes best of all in an atmosphere of peace and good will and confidence amongst the peoples of the world. For that reason I was indeed very glad to notice, in the Prime Minister's broadcast the other evening, that he emphasised the importance of a renewal of trade activity, and of international trade in particular, after the war, as an essential to peace conditions after the war. Now, of course, during peace time we can all expect that trade will flow through normal channels and that every country in the world will be able to get what it needs from some other country which is in a position to supply it. That is all true, but in war, also, trade does not stop, and must not stop. To-day, in spite of all these difficulties, obstructions and dangers, every country tries its best and its utmost to maintain its own trade. Neutrals will risk sending their ships to seas sown with deadly mines in order to carry on their trade. Germany squirms because of the stranglehold which the Allies have on her trade, and positively rages at the action which the Allies have recently taken to kill German export trade. I do not think we should have much concern to-day with the feelings of the German nation on the matter, but it is useful to know what importance they themselves attach to the trade connections with other countries.

Above all, Great Britain must take all risks to maintain and even expand her foreign trade to-day. We may have to adopt unorthodox methods; certainly orthodox methods to-day will no longer suffice. The Government must face up to this problem. If they were a Free Trade Government I could understand any reluctance on their part to depart from the conventional methods of trade, but, after all, this is a tariff Government. They are used to tariffs and subsidies. They revel in subsidies, restrictions and prohibitions. These times are not normal, and abnormal methods and means may have to be taken in order to maintain our export trade in the conditions that prevail to-day. It is, indeed, certain that extraordinary measures will be necessary to look after our needs in time of war.

I do not think I need emphasise from the facts of the case to-day that the matter is supremely urgent, and I agree with the writer in a recent issue of the "Economist" who said that the export trade should be on the top of the list for our consideration. It may be a somewhat trite statement that exports pay for imports; it is true that we can always get our imports if we have the wherewithal to pay for them. There is one sound method of paying for them, and that is by exchanging our goods for other countries' goods. If we fail to do it in that way, we have to resort to our capital assets—gold, foreign exchange and foreign securities. It is essential that those reserves should not be drawn upon except in the very last resort so as to place us in as favourable a position as possible to resume trade after the war. It is, therefore, obvious that export trade is one of the major sinews of war, and, like every other kind of sinew, it must be used, exercised and trained to be effective.

In face of this paramount importance of our export trade I would like to ask the Government this afternoon what is their viewpoint on the matter, what is their policy and what steps are they taking to give effect to that policy? I have heard the Government criticised for their want of policy in many directions, but in this particular matter, at any rate, it may be fairly said they have a policy, but they seem to lack direction in order to give effect to their policy. The President of the Board of Trade has frequently shown that he fully appreciates the importance and urgency of the problem. In a Board of Trade Memorandum some time ago he urged the necessity of not depriving the exporter of raw materials for manufacturing goods for export, and he also emphasised the importance of expediting export licences as much as possible. But he does seem in the present organisation of the Government to lack that co-ordinating power to apprise priorities as between the different supply departments.

I hope that the Government will realise that foreign trade must be kept going. It cannot be dropped for three or four years, and if the Government are planning for a war of at least three or four years, it is important to realise that trade cannot be dropped for that period and picked up again at the end of the period as if nothing had happened. What are the plans, if any, of the Government to exploit those oversea neutral markets which are lost to Germany—markets which she has been forced to abandon by the blockade and by the effect of the recent Order-in-Council by which neutral ships will not be permitted to carry goods of German origin to importing countries? The corollary to our policy should be to try and fill the gap left by Germany. We should not content ourselves by merely slamming the door of those countries against German goods. We should, in justice to the buyers, and in our own interests as well, open the door to our own goods in so far as we can supply them on terms at least as favourable as Germany.

As we all know, these are the countries to which Germany has to ship her goods across the seas, including the most valuable and growing markets of Latin America. There we all recognise that the United States will certainly be a strong competitor, but so far she has been placed at a disadvantage because of currency difficulties and embargoes. Unfortunately, I am informed that quite recently South America lifted these embargoes against goods of the United States of America because these countries have entirely failed so far to get their supplies from Great Britain. How should we face the problems of the markets, in regard to the geographical region of Latin America, from which Germany has been deprived? It is certain that to-day no individual trader can do it effectively with all the restrictions on travel, telephones, cables and mails.

I would like to know definitely how long this state of things is to continue. How long is the English trader to be deprived of telephone communications and facilities between this country and foreign countries for purposes of trade? Not very long ago two representatives from Finland were present at my office in London and they asked me, "Why is it that we cannot telephone you and you cannot telephone us, whereas we in Finland can telephone to-day to practically every country in Europe, and to America?" I do not say it can be done now, but it can be done even between Norway and Finland and the United States of America, and before the war broke out—although I do not know what the conditions are to-day—these gentlemen telephoned freely to Germany, but certainly not to this country. I need not emphasise the delays to the President of the Board of Trade. I am sure he is familiar with the difficulties with regard to mails and cables—and I do not refer to cables in code. A great additional expense is put on traders and, therefore, it hampers and restricts the negotiations between traders in this country and in other countries.

How can we tackle this problem? I refer particularly to the markets in South America. I read a very able letter, if I may say so, by the hon. and learned Member for Montgomery (Mr. C. Davies) in the "Times" a few days ago and I confess I rather liked his suggestion that a Ministry of Commerce—I am not binding myself to the term—should be set up. I am interested in the functions of such a Ministry, that there should be small representative bodies resident in the neutral countries, in direct and constant touch with that Ministry or with any other representative body of the Cabinet, who would keep the Ministry informed of the needs and exportable articles of those countries. I confess that my thoughts run on similar lines. I think it is high time to have a trade delegation or commission for the duration in all these countries where German trade flourished before the war. The delegation should consist of men of business experience—young, energetic, and not mere dug-outs—with knowledge of the countries to which they are sent, and support of these delegations in the various neutral countries should be given in no niggardly spirit. The dead hand of the Treasury should be kept as far away from them as possible. I believe if the various trade associations and industrialists in this country were consulted in the selection of the members of these delegations it might be possible to get financial support towards the cost of maintaining them.

The Balkan countries, including Turkey, provide another interesting sphere. They comprise a field for a great commercial adventure to-day. Turkey had a large trade with Germany, and she will be very hard hit indeed unless we do something to help her. These countries, as we all know, have no desire to trade with Nazi Germany, and only necessity compels them to do so. Should we not take the opportunity now to outbid Germany for her products and undersell her in export prices to those countries?

Mr. Boothby

I would like to ask the hon. Gentleman a question. How does he expect this country to trade with Turkey unless we take their tobacco?

Mr. Evans

I am obliged to the hon. Member for his intervention. I think the question of tobacco is exceedingly important. The Government should consider the question of introducing to this country Balkan Turkish tobacco at a reduced rate of tariff, and it would even he a good thing to consider the compulsory blending of our cigarettes with Balkan tobacco.

I would like to say a few words on the organisation of the Departments which directly or indirectly affect the export trade. There are many of them—many more than people realise. There are the Treasury and the Bank of England which conserve foreign exchange. There is the Ministry of Supply, which buys raw materials from abroad and manufactured goods for the Services. There is the Ministry of Economic Warfare which is responsible for contraband control, German exports and rationing neutral countries. The Ministry of Food buys food, the Ministry of Shipping organises transport, and, lastly, there are the Board of Trade and the Department of Overseas Trade concerned with general trade, imports and exports. We have such a large number of Departments, all in some degree concerned. Who can say that without some co-ordinating authority every phase of the national economy will get its proper show? Since this Amendment was put down, my postbag has brought plenty of evidence that exporters are working under almost insuperable difficulties. I acknowledge that the officials of the Board of Trade are courteous and anxious to help, but the exporters find themselves hedged in with all sorts of restrictions and prohibitions. There are no priorities for materials for export orders. A controller imposes his ban on small quantities—sometimes a mere bagatelle—which may be required for export purposes. I am not going to trouble the House with specific examples—other hon. Members may do that—but I assure the House that there are plenty.

As I see it, the root of the trouble is the failure of the War Cabinet to place goods for export on the same plane as goods for munitions. I do not say that there should not be priorities on that plane, but those priorities change from time to time. At one time the controller might consider it dangerous to deplete the stock of a particular commodity except for essential and immediate war purposes, but at another time, in view of the stock in hand and of estimates which have been made of the requirements for the ensuing 12 months, it might be considered safe to release a quantity for other purposes. I happen to know, from some personal experience, that very careful estimates have been made of some essential commodities needed for war purposes. When you get a safe stock of these things the controller can say, "Here is plenty of surplus material for export purposes." It is always a question of relative importance. That, I submit, cannot be decided properly by the authority charged with conserving supplies for the Service Departments. He looks at the matter, and rightly so, only from one angle. He must not take any risks. It must be some supreme authority that can take the necessary risk. That brings me to what I might call the diagnosis of the cause of the trouble, as made by a number of competent authorities, inside and outside the House—[Interruption]—including the hon. Member for East Aberdeen (Mr. Boothby). I have read carefully most of the contributions to the Press on this subject by responsible persons. I think their opinions may be crystallised in one passage from a leading article in the "Times" of 25th October, which said: Co-ordination between Departments remains an unsatisfied necessity. There is no authority to pull them together and to bring their requirements into proper relation with each other and with the national effort as a whole—a whole that comprehends industry working to its normal ends as well as the wide range of industry diverted to meet the colossal requirements of the armed Forces. Absence of a co-ordinating authority, no unity of command, the need for a General Economic Staff. Lack of co-ordination seems to be a functional disorder common to most Governments, particularly war Governments. My right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) told the country last night, temperately but very firmly, that the main reason for the destruction of the Asquith Government in 1916 was the obvious lack of co-ordination. This disorder of lack of co-ordination seems to be as if the blood stream, instead of circulating through its usual course, were to start from different points and run in different directions. That would end fatally. I suggest that the Prime Minister might very well bear in mind the fate of the Asquith Government in 1916. I hope that this afternoon we shall receive some satisfactory assurances from the Minister on this point. I do not propose to deal with the matter in any detail, because I have not the necessary knowledge or experience in statecraft to suggest an adequate method by which a Government could effect this necessary improvement in the organisation of our industry in wartime. I think it is fair to leave it to the Government itself to find the best method of securing that co-ordination which I am sure they will admit is necessary.

I want to emphasise that any criticisms I have offered are intended to be constructive, and not destructive. I have always tried, in these dark days, to find reasons for trusting the Government, rather than discrediting it. I have shown that doubts exist in the minds of many people, not all unfriendly to the Government, as to the Government's intentions in many important directions. I cannot forbear from quoting from to-day's "Times," a report of a speech by Sir Warren Fisher, who was until recently head of the Civil Service. In emphasising, as he put it, the need for real economic planning, he is reported to have said that: it meant not 20 different Ministers or Departments all acting independently, but a unified direction under a Minister selected for his qualifications and in the War Cabinet. That, I submit, is essential. The report continues: In economic strength we started with an advantage, but it was not so great an advantage, and our resources were not so immeasurably superior to the enemy's that we could afford to misuse them. 'We are doing that good and hearty,' he said. 'We are finding the industries of this country interfered with by controllers, sub-controllers, and sub-sub-controllers, appointed all over the place, showering spanners and monkey wrenches into the industrial machine; our export trade interfered with and handicapped in every possible way. By our export trade we live, and by its maintenance alone can we suceed.' If we took Germany lightly we should be devilishly sorry for ourselves. If we said that they cannot last, that they would have internal disaffection, we had got a very unpleasant awakening to follow.

Mr. Cocks

Who said that?

Mr. Evans

Sir Warren Fisher.

Mr. Cocks

Not Sir Horace Wilson?

Mr. Evans

Sir Warren Fisher was a very able and respected civil servant, noted for his discretion. He should know something of the organisation of Government Departments. In view of the evidence of such people as that, can the Minister wonder that we have doubts. We want to win this war, and we must win it, in order to gain the peace for which we are all yearning.

4.41 p.m.

Mr. Horabin

I beg to second the Amendment.

From the speeches of Ministers it is obvious that we are all agreed on the importance of export. Ministers, no less than their critics, have set out to make it clear to the nation that we must either export or die. Indeed, the President of the Board of Trade, who, I believe, is primarily responsible for the export trade of this country, has shown that he is fully alive to the urgency of the problem. Unfortunately, his authority in the matter does not seem to maťch his responsibility. For that, he has my sympathy. When we turn from the realms of words and good intentions to the realm of action, we find the Governmenť incapable of carrying out their own clearly-expressed intentions. Since the outbreak of war our export trade has fallen by 42 per cent. I hope the Minister is not going ťo fall back on that last resort of a harried Minister which we have seen during the discussions on the Address. I hope he will not attempť to justify the failure and the muddle of to-day by comparing what happens in 1939 with what happened in 1914, or even with what happened in 19I7 or 1918. We are faced wiťh something very much greater even than our own effort in those years. We are faced with the effort of Nazi Germany to-day.

In this war, too, we are faced by far more serious economic conditions. Our resources in gold and mobilisable foreign assets are much less ťhan they were in 1914. We are also faced by "cash and carry." For much of the raw materials and foodstuffs which we must import or starve, we are compelled to pay cash on the nail. That means, broadly speaking, that we cannot pay for ťhis war out of accumulated savings because they exist only to a small degree; we cannot make the future pay because our ability to borrow abroad is also strictly limited; and we have, therefore, to pay as we go. As an hon. Member said yesterday, the national income is the same thing as our total production of goods and services. We have the men; after all, we have 1,400,000 unemployed in ťhis country—after three months of war. We have also the plant available for the manufacture of goods for export. We can find the raw materials, if necessary, by restricting the consumpťion for home purposes. We must make that sacrifice if necessary, because export is as vital to our war effort as the complete efficiency of the three lighting Services. Withouť exports, the fighting Services would find themselves starved of essential equipment. We pave markets abroad ready and anxious to take our goods. Our export merchanťs are turning down inquiries every day of the present war. Why are they doing it? Because, I suggest, of the Government's ineptitude. Government action is destroying our export ťrade at a moment when it is not only vital to maintain exports, but it is even more vital ťo increase them.

In the first place, I believe that the Government do not fully understand the way in which the export trade works. [Laughter.] I am saying this quite seriously. The President of the Board of Trade told the House on 31st October—and this is my point—that he was opening a series of discussions with the major exporting industries so as to enable them to formulate plans for their future export trade. To me that statement by the President of the Board of Trade proves conclusively that he does not fully understand how the export trade of this country really works. It shows that the Government are under the impression that the producer is the exporter. That may be true of the spectacular million pounds order, but how many of these do we get in our export trade to-day? Our export trade largely consists of countless thousands of small orders of £500 or less, and with the export of these goods the producer has nothing whatever to do. The goods are produced by the manufacturer for export, and the actual exporting is done by the export merchants of London and the provincial centres like Birmingham, Liverpool, Manchester, Glasgow, and so on.

Sir Frank Sanderson

That is not strictly correct.

Mr. Horabin

These merchants are in the closest touch with the overseas markets from which they secure their business. They pay the manufacturer cash on delivery, and they arrange steamer space and pay for freights and insurance, and frequently they also finance the overseas buyer by giving him extended credit even until the goods are sold again. I was told some little time ago by a shipowner that 80 per cent. of his freights that were earned by his steamers were paid by export merchants, and I doubt whether that percentage was less, at any rate up to the outbreak of war. Among the members of the Imports and Exports Section of the London Chamber of Commerce, there is to be found, I believe, a greater knowledge and experience of the export trade than I would say might be found anywhere else in the country. I say this because, after all, the London export merchants are dealing with all types of goods and with all the markets of the world. In view of this, it will perhaps surprise the House to learn that at no time has the Imports and Exports Section of the London Chamber of Commerce been consulted by any Minister or any Government Department on the question of exports during this war. If the President of the Board of Trade really wants to get our export trade going quickly—because it can be got going quickly—I would suggest that he gets into touch immediately with the Imports and Exports Section of the London Chamber of Commerce.

Export trade during war time is largely carried on by cable. The overseas buyer cables to a number of producing countries for quotations. He needs an immediate and a definite cabled answer, giving a firm price and an approximate date of delivery. If he cannot get these from us, the business goes elsewhere. Our export merchants to-day find that in the majority of instances they cannot give the overseas buyer the definite information that he requires on these points. In fact, very frequently the export merchant to-day cannot quote any price at all, and the reason for that is not far to seek. One of the Ministry of Supply controls, inaugurated at a very early stage of the war was the principle "that prices are subject to the price ruling on the date of delivery," and that example has been copied for many other commodities including even the textile trade, which, I believe, is not controlled. [An HON. MEMBER: "Yes, it is."] At any rate, I believe that you do not require export licences for it. Unless the producer accepts contracts at the price ruling on the date of acceptance, obviously the export merchant cannot quote the overseas buyer a firm price, and the business is thus lost. Then, in many instances, the export merchant cannot give even an approximate date of shipment because the manufacturer does not know whether he can get a licence for the raw material or how long it will take him to get the licence.

The President of the Board of Trade, quite rightly, has emphasised the importance of our exporting highly manufactured goods, that is, goods in which the value of the labour used in their manufacture is at its maximum in relation to the value of the raw materials used. Yet, through the way the raw material controls operate it is far easier to obtain a licence to export goods containing a high value of raw materials and low labour cost than it is to export the highly manufactured goods the President desires. Licences can be obtained—I do not say easily, but they can be obtained—to export a ton of copper tube worth £80, or a ton of rough iron castings worth £10, or a ton of steel worth about £10. But it is impossible to export 1,000 lavatory cisterns worth say £800 with very little of these controlled raw materials in them but with a high labour cost. I think that lavatory cisterns are, in fact, a classic example of the way the present system works.

I know of a case, for instance, where an export merchant was asked to quote for 1,000 lavatory cisterns on which there is no export ban. Lavatory cisterns consist of parts which are assembled from many traders. Permit to use the raw materials for these cisterns had to be obtained by five different manufacturers of parts, from five different controllers of raw materials—the copper controller, brass controller, leather controller and so on. If one of these licences is refused, the cisterns cannot be completed and cannot be exported at all, and the result is that this specific order for 1,000 lavatory cisterns had to be turned down. No reply has been sent to the cable that was received by the export merchant. If we are to build up an export trade in highly manufactured goods—which we must—we should rank the export trade, as my hon. Friend said just now, in priority either with the three services or immediately after them.

Another difficulty to which my hon. Friend again referred is the way in which difficulties and delays in communications are strangling our export trade. Military necessity, of course, is given as the reason for this, but surely, if Germany is able to give and encourage speedy communications for business purposes—as she does—we can do the same. After all, Germany's military necessities in this respect must be as great as ours. An annoying and expensive point made by some exporters is that goods on slow cargo boats sometimes arrive before the documents reach the port of destination by mail. I have an instance in which documents posted to India on 28th September were not received until 7th November. Although the cargo reached India on 4th November. As a result demurrage and other charges mount up which the exporter cannot recover.

I think I have said enough to establish that there is muddle and disorganisation which is strangling our export trade today, and that there is, at the same time, general agreement among us all that we must not only maintain our exports, but we must increase them. But I see no prospect at the present moment of increasing our exports until complete control of our economic activities is in the hands of one Minister armed with authority to carry out definite policies and able to cut through inter-departmental difficulties. Such powers could well be allocated to the President of the Board of Trade. But until co-ordination takes place we shall continue to let Germany push us out of the markets, for instance, of Northern Europe, because the price of the coal we are attempting to sell has increased. We shall continue to allow Germany to win the economic war in those many markets still open to her, and to us, and we shall continue to see our own trade languish even in those markets from which Germany is excluded but which are still open to us. We shall continue to muddle our chances away until we have a Minister charged with the responsibility and also with the authority to organise our economic forces as a whole.

4.57 p.m.

Mr. Shinwell

I doubt whether we could Debate a subject which is more important than the one which engages our attention this afternoon. We did discuss the matter a few weeks ago when I ventured, in company with other hon. Members, to put before the Government several constructive proposals relating to economic and trade policy during the war. This afternoon the two hon. Members below the Gangway, in interesting and valuable speeches, have developed the argument further. Although there has been—it is bound to be the case—a certain amount of repetition, I do not complain, because in the situation that confronts us, and because of ťhe importance of the subject under review, it is eminently desirable to emphasise and re-emphasise these considerations in order to impress the Government. Whatever differences may exist in the House with regard to the proposals that have been elaborated, there will at least be unanimity as regards one primary consideration. It is, that there exist at the present time no grounds for complacency as regards our export position. Since the war began German exports have declined by 15 per cent., but British exports have declined by 43 per cent. That, surely, is a matter which is bound to cause grave concern in all quarters of the House and throughout the country.

If I differ at all from the hon. Members below the Gangway, it is with regard to their emphasis on the importance of removing licensing and export restrictions. I agree that these restrictions should be relaxed as rapidly as possible in accordance with our strategic needs, but I would remind hon. Members that even an immediate relaxation of export restrictions would not solve the problem that confronts us. Before the war, in a normal situation, there was an unfavourable balance, both of trade and payments, Therefore, if we could return to the freedom that existed before the war, that would be insufficient for the purpose we have in view.

Let us consider the principal reasons for maintaining our export trade. I agree that one of the reasons is that we must provide exchange, in order to pay for our imports; but I would suggest that that is impossible by means of normal exports in the present situation. Thať, obviously, presents an entirely new problem for the consideration of the Government. The problem would be less difficult if we could mobilise the whole of our producťive capacity. The more we produce, the less we require to import. That applies particularly in the sphere of food supplies, and that relates not merely to export policy but ťo agricultural policy. Moreover, it raises the question of rationing, not partial rationing, or, if you like, rationing of food supplies, but a complete policy of rationing relaťed to our capacity to import. It also bears upon our consideration of the question of internal consumption.

I addressed some observations to the Chancellor of the Exchequer in a previous Debate on this issue which is the crux of the problem, although some hon. Members may be disposed to differ. I now address the question to the President of the Board of Trade, and I hope he will be good enough to give his attention to it. Are we taking effective measures to check internal consumption? For example, I am informed, and I have no reason to doubt the accuracy of the information, that in textiles there has been a rapid increase in production, but not for export. The retail trade has benefited, and it is obvious that the people of this country are purchasing more textiles. The question we have to consider is whether in existing circumstances it is desirable for people to buy more goods, or whether we should adopt a strategy so that internal consumption may be checked, without disadvantage to the people, at the same time liberating some of these goods for export purposes. Is it the opinion of the Government that we can afford to increase internal consumption? I believe that question to be fundamental.

Are we diverting production from nonessential to essential goods? Freedom to produce or freedom to buy may not prove a sound principle in war time. The Government must give this matter their immediate and active consideration. Are we using our shipping space effectively? There is no difficulty about shipping space for export, and I think the right hon. Gentleman will agree on this. Most of us are aware of the fact, which I agree is not very palatable, that many vessels leave this country in ballast. That is highly undesirable. It is clear that, so far as exports are concerned, there is ample shipping space at our disposal, but we want shipping space for imports. We might consider whether it is not better to purchase arms from abroad, wherever we can, and pay for them with exports, thus utilising shipping space both ways, and at the same time releasing industry for the purpose of exports. That would have a double advantage.

There is a further reason why we must maintain our exports. We must safeguard our goodwill in trade. That is of the highest importance. We must safeguard our standard of life, which is not so high as hon. Members on this side of the House would desire, but undoubtedly higher than is to be found in many other countries. That standard of life depends upon the retention of our markets. We have to consider not merely war time but what is to happen after the war. I do not, however, in the limited time at my disposal, propose to enlarge upon this subject, because I understand the right hon. Gentleman desires to speak soon. This matter, however, does demand the early attention of the Government.

Now I come to the question of the economic position of the enemy and the position of neutrals. In a previous Debate I indicated that there were variations in this problem, that we could not trade with one section of neutrals in the same way as with another section, and that we had to adapt ourselves to geographical and other circumstances. I suggest that with those neutrals isolated by naval action we can promote trade on favourable terms. We could strengthen our position by utilising our monopoly power in raw materials. Without desiring to discuss the matter at great length, I will put before the right hon. Gentleman one example. I will not mention the neutrals concerned, it would perhaps be unwise to do so in existing circumstances, but I think the right hon. Gentleman will be able to follow my meaning. As regards certain raw materials over which the Empire exercises a monopoly, we have a controlled price, but the controlled price bears no relation to the internal price in certain neutral countries. Consumers in those neutral countries are paying a much higher price than our controlled price. Indeed, certain neutral countries can afford in present circumstances to pay a higher price, because their trade position has improved since the beginning of the war. I would beg the right hon. Gentleman to give this matter his attention, and see whether we could not increase the controlled price in order to provide ourselves with more favourable terms.

As regards the neutral countries not isolated by naval action the position is, quite different. Those countries contiguous to Germany are in different circumstances. When reference was made to the Turkish situation, the hon. Member for East Aberdeen (Mr. Boothby) put a question about Turkish tobacco. I can hardly believe that Turkish tobacco stands in the way of a solution of Anglo-Turkish trade. I have reason to believe that it is a question of price, or to some extent a question of price. I do not charge the President of the Board of Trade in this regard, but I understand that the Government as a whole, in particular the right hon. Gentleman who represents the Treasury, are not prepared to pay higher than world prices. I hope that I am wrong, but I understand that is the position. I venture the opinion that world prices in the present situation are quite irrelevant.

Mr. Boothby

Surely, it is not really a question of prices. It is the fact that we have not been prepared to take any tobacco at any price from Turkey?

Mr. Shinwell

The right hon. Gentleman will, perhaps, be able to give us the facts. If I may say with great respect, I am fully aware that prices are a consideration and cannot be ignored, and are certainly not being ignored by the Government. I suggest that in neutral countries contiguous to Germany we must be prepared to pay the highest possible price for the goods they have to sell, not for all goods, not for a whole range of goods, but judiciously, and in accordance with the Government's policy. If we did that it would force the enemy to pay more for the goods they want, and it would tend to weaken their economic position. That is precisely what we must do. Moreover, we should offer to sell at lower than world prices when it is possible to do so. Germany cannot afford to sell at lower prices. I agree that this might involve a subsidy, or some form of Treasury assistance, but surely this form of war expenditure ranks equally with any other form of war expenditure, and it might be a very potent instrument in winning the war.

I refrain from developing at length the point that I have just raised, because I am anxious to come to what I think is a sound conclusion and the substance of the whole problem. It is this. If the private trader sells too cheaply, no profit accrues. It is clear that private traders cannot afford to take the risks involved in that. That is impossible. The private trader cannot afford to purchase goods from neutral countries, whether contiguous to Germany or isolated by naval action, at too high a price, nor can he sell British goods at too low a price. It would be asking too much of the private trader to undertake a task of that kind. The private trader, obviously, would prefer to trade at home if he has a choice as between export trade and undertaking risks, or trading at home where he has a secure market, or take Government orders, a still more secure market.

That is the situation which faces the private trader. It is all very well to say we should give the private trader a chance, but we must face facts. New machinery is essential. In that, I agree with hon. Members below the Gangway. I would suggest to the Government that we should create export companies for various kinds of companies and groups of exports—not leave them to their own devices—operating under some Government direc- tion and, what is even more important, fortified by Government loans. Losses are bound to accrue, occasionally there will be a surplus, but if there are losses they should be borne not by the private trader but by the Government, for this is a strategic and, a war consideration. Over and above that, co-ordination is essential. The Chancellor of the Exchequer, replying to a Debate a few weeks ago, told us all that was to happen when Lord Stamp's Committee began to operate. We have heard nothing since. What is Lord Stamp co-ordinating and directing; and what are the results of this co-ordinating and directing?

The President of the Board of Trade (Mr. Oliver Stanley)

Better wait and see.

Mr. Shinwell

We shall be only too delighted to learn that some useful results have accrued, but they are not too obvious at the moment.

I venture to put forward one final consideration in relation to the need for coordination. Exports cannot be isolated; you cannot put them in a watertight compartment. They are related to shipping space, to the supply of raw materials, to home production, to internal consumption, to prices and to finance, and finally to strategy. Therefore, there must be control and effective direction. I understand that the President of the Board of Trade is responsible for one thing alone—imports, and that the right hon. Member the Secretary for Overseas Trade is responsible for exports. There is a differentiation in functions although there may be collaboration at certain stages. But we should devise a much better method than exists at present. When the President of the Board of Trade wants to provide exporters with the goods that they require for the purposes of export, has he any difficulty with the Minister of Supply? Has he ever had any difficulty with the Minister of Shipping? Has the Minister of Shipping ever experienced any difficulty when he consults with the Minister of Supply; and does the Board of Trade and the Overseas Trade Department, administered so ably by the right hon. Gentleman, or the Ministry of Shipping and the Ministry of Supply, ever experience any difficulty when they approach the Treasury? I think we should know.

Mr. Stanley

They never experience any difficulty at all.

Mr. Shinwell

That is, as we know, mere poppy-cock. I would urge upon the Government to develop some new device or co-ordinating machinery which is effective and which may impel our exports in the proper direction. Lastly, we must recognise that we are in an abnormal situation and must adopt abnormal methods. Orthodoxy has no relevancy to the present situation. I know that is not very palatable to many hon. Members, but we have to face facts. Moreover, we may require to be ruthless in dealing with a ruthless enemy. This is no kid glove affair. There is complete agreement in all quarters of the House on the need for a full utilisation of our economic power. A correct shaping of our economic policy may do more to win the war than anything else, and because I believe that sincerely I urge the Government to take note of the submissions which have been made to them and do everything they can to shape our economic policy so that it is calculated to meet the needs of the present situation.

5.22 p.m.

Mr. Stanley

I certainly have no complaint to make that a subject of this magnitude should have been raised today. We have now been three months at war and this is the first time there has been any opportunity to discuss what is, perhaps, one of the most important aspects of our war policy. It is a peculiarly suitable subject for debate in this House. There is here no possibility of any party difference. We are all agreed that in a crisis of this kind political ideologies have to be suspended, and the speech of the hon. Member for Seaham (Mr. Shinwell), as also the speeches of hon. Members below the Gangway, whose economic ideas in normal times are very different, contain nothing but what in their view are practical suggestions for meeting an immediate problem. I would have welcomed an opportunity at an earlier stage not only to have heard from hon. Members suggestions as to what should be done but to have heard particular instances of difficulties which were being experienced. One of the biggest helps which hon. Members can give to Ministers to-day is to bring to their notice instances which come to their attention of difficulties and of things going wrong, not with a view of making political capital but in order to give the Minister a chance to put them right. From another point of view I welcome it as an opportunity of saying to hon. Members things which up to now I have had no opportunity of saying, and of giving explanations of things which have been the subject of a good deal of misrepresentation without any opportunity on my part to reply.

Therefore, I welcome the opportunity which has been given us this afternoon. If the Government have no reason to complain of the subject matter of the Debate, they certainly have no reason to complain of the tone of the speeches in which it has been introduced. The hon. Member for Cardigan (Mr. O. Evans) is an old friend of my Department. In the days before the war he gave us valuable assistance on certain matters with which he has an intimate connection and an expert knowledge, and the speech he made this afternoon was in a spirit of anxiety to help, which one would have expected from him. One passage, in which he was dealing with compulsory blending of tobacco; seemed to cause a certain wilting among his colleagues on the bench.

The hon. Member for North Cornwall (Mr. Horabin), who seconded the Amendment, made one statement which filled me with astonishment. He said that the fact that my right hon. Friend and I did a wise thing in asking the great exporting industries through their associations to meet us and discuss with them their difficulties and requirements, and so give us a chance to help them, showed that we knew nothing at all about the export trade. If I wanted to deal with the Debate in that sort of spirit, I should say that what the hon. Member said showed that he knew little about the export trade. What is his contention? It is that the manufacturer has nothing to do with exports. Why? Because in many instances the ultimate sender of the goods to the foreign country is the man who has obtained the order by his own exertions and skill—the merchant. But it is the producer who runs up against the difficulty of the raw material, and it is the producer who can give us some estimate of what the position in regard to raw material is going to be and what manufacturing capacity will be necessary; the kind of information which is absolutely necessary for the Board of Trade to have if we are to take any part in the co-ordination referred to by the hon. Member in his speech.

Mr. Horabin

I had no intention whatever of objecting to negotiations with the manufacturer. The point I was attempting to make was that the export merchants were not consulted at all by the right hon. Gentleman, and that the only people who were consulted were the manufacturers.

Mr. Stanley

That, of course, is not the case. The hon. Member is quite correct in which he has just said, but he went on to say that I knew nothing about the export trade because I had called into consultation the manufacturers, and he went on to complain that I had not been in consultation with one particular section of one particular chamber of commerce. As a matter of fact, the London Chamber of Commerce has been in close consultation with my Department on the difficulty of wood for packing-cases and a standing committee of the chamber has been set up to deal with that particular problem. The Export Licensing Department have been in constant communication, and the Board of Trade are in frequent touch, with the particular section of the London Chamber of Commerce to which he referred. I would say that in regard to such matters as the forecast of requirements of raw materials it is clearly the producer one must consult, and I submit that we have shown every recognition of the importance of the merchant in these schemes of export trade, and that we are in fact in close co-operation with him. I will riot make any specific reference to the speech of the hon. Member for Seaham because the views he expressed upon this subject coincide to such a large extent with my own that he will find in the course of my speech that I shall take up all the points to which he referred.

It is necessary, before we consider the subject matter of the Amendment, to look at the history of our export trade since the commencement of the war. It is true that in the first month of the war, September, there was a very heavy fall in the value of our export trade, a fall of about 38 per cent. I cannot pretend that that fall was unexpected either by me or by anyone else who was interested in or had knowledge of the likely conditions of the export trade in time of war. The immediate effect of an outbreak of war is to destroy the very conditions for trade to which the hon. Member for Cardigan referred; all the confidence and the feeling of security goes, and there are among customers all over the world uncertainties as to prices and delivery which are bound to impose a severe check. There is inside this country the change from peace to war conditions, with all the uncertainty which that produces among our manufacturers. There were, of course, shipping difficulties, the formation of the convoy system, the diversions which had to take place in the early days of the war when no one knew what the course of the war was likely to be, and in addition, there was the imposition of restrictions, with which I shall deal in detail later and which I shall claim were fully justified, but which, I frankly admit, had to be administered by a machine which was, as it had to be in the early days, inexperienced and overloaded.

Although I am afraid I shall disobey the solemn injunction given to me by the hon. Member for North Cornwall that I must in no circumstances make any comparisons between the course of anything in this war and the course of anything in the last war, nevertheless I think this is an occasion when a comparison is useful, for it brings home to our minds what has been the cause of this decline. The hon. Member said that it is all the restrictions which the Government have put on, the import licences, the export licences, and so on, which make it difficult for the trader to export. In 1914, there was nothing of that kind. It was not until considerably later in the war that people began to realise the magnitude of the effort that was called for and to impose restrictions intended to divert the national effort in the direction which the national interest most demanded. There were none of these things in 1914; there was no convoy system, no submarine warfare, and no diversion; and yet, as a result of the mere impact of war upon the peacetime export trade, in the first months of war in 1914, the exports of this country fell, not by 38 per cent., but by 46 per cent.

If I had had an opportunity of addressing the House earlier on this subject I should have warned hon. Members that I did not consider the first month or so of the war as any sure basis on which to make an estimate of the likely course of exports during the war as a whole. In October, there was some improvement to be seen. No doubt the machinery began to work more smoothly, some of the shipping difficulties were being reduced, and gradually some new basis of war-time prices and delivery was being established, with the result that a comparison between October and September shows a rise from 23.1 million to 24.6 million, or 7 per cent.

Sir Archibald Sinclair

That is less than the normal seasonal rise.

Mr. Stanley

It is less than the normal seasonal rise, but we must take it that some of the things which have happened to the export trade since 3rd September really have had more effect than the normal seasonal rise, and that seasonal rises are tending now to be ironed out. We have just completed the third month of trade since the war started. The accurate and final figures for November will not be available for publication until next week, and therefore, I am not in a position to-day to give the actual figures; but I know enough from the preliminary figures to indicate the trend of the export trade during that month, and I have no reason to suppose that the final figures, although they may show some slight variation from the preliminary figures given to me, will disclose any difference so substantial as to alter the effect of the information I am now about to give.

Everything goes to show that during the month of November there was a major change in our export trade position. Whereas in October the rise over September was of the magnitude of 7 per cent., in November the rise over October was in the neighbourhood of 5o per cent. The result is that the level of exports for November is now about back to the level of exports in the last month before the war began. It is true that the peace-time seasonal trend under which normally the figures are higher in the month of November almost than in August, means that we are still something below November of last year, but even so—again, I revert to the figures of the last war, which I looked up out of interest—it was not until the spring of 1916 that our exports got as close to the figures in the comparable month of the last year of peace-time as we have in November of this year. It was not until 1916 that we got back to the level in comparison with the peace-time month that we have now reached in November. That is in a month when, every night, if we listen to the wireless we are told by—[An HON. MEMBER: "Lord Haw-Haw!"]—I do not know whether one ought to call him a member of another place, that Britain is blockaded, that no ships can enter or leave our ports, and that these new and murderous weapons are supposed to have completed our maritime downfall.

I do not give those figures and those indications to the House in any sense of complacency, but I do give them with a considerable amount of confidence. Of course, there is much to be done still, and the very marked improvement that has taken place in the last month does not lessen in any way the force of the demand that all possible measures should be taken to increase our exports wherever and however we can. But the trend of the figures does show how unsupported in fact are some of the things which are said and written now about our export trade—the too exaggerated pessimism which one has heard and which gives both to people in this country and to the world the impression that our export trade has practically come to an end; whereas, our export trade, after the severe shock of the early days of the war, was last month running at about the same level as in the last month before the war started. Although I welcome every criticism and every suggestion for improvement, I make an appeal against the making of exaggerated statements of the kind to which I have referred. They cannot do any good, and for two reasons they can do much harm—first, they give to our potential customers abroad the idea that it is not any good making inquiries for exports from this country because our export trade has come to an end and we shall not be able to supply them; and, secondly, they give to potential manufacturers or merchants in this country, who might consider making efforts to secure export orders, the idea that it simply is not worth while because our export trade has been so strangled by restrictions that it is unable to exist. The facts which I have given to the House show that a very considerable export trade is being done. They show also that that trade can be and must be increased, and the question to which I want to devote the remainder of my speech is how that is to be done.

The Amendment is divided into two parts. One part suggests that the export trade can be helped by the removal of what are called the unnecessary restrictions which are now imposed upon it., and the other part suggests that there are possible measures which can and should be taken for its active development. I will deal first with that part of the Amendment which refers to restrictions. What are those restrictions, what are the reasons for them, and is it possible in one way or another to improve their administration and make their operation less restrictive? I will deal first with those restrictions with which I am, departmentally, more closely connected. With regard to export licences, I think that when the hon. Member referred to export licences as being an unnecessary restriction, he really cannot have meant that existing circumstances he would dispense with this licensing system. What is the necessity for it? First, it is a question of supply. There are a certain number of articles and a certain number of raw materials so urgently required for purposes of National Defence that we cannot afford to export them, or, if we can afford to export them, we can do so only in limited quantities.

Secondly, it is only by a system of export licences that we can prevent valuable exports from this country reaching the enemy and so aiding him in his war effort. The advantage of the export licence system, until the whole series of war trade agreements is completed, is that it enables us to see what are the exports of particular goods to countries contiguous to Germany, it enables us to detect at once any marked increase above the normal imports of those goods in those countries, and in those circumstances, it would enable us to put a stop to something which led to the goods going to Germany. If you go to all the trouble and inconvenience which the Ministry of Economic Warfare goes to under the contraband control to prevent neutral goods reaching Germany, how ridiculous it would be to leave the door open for goods and raw materials from our own country to go to Germany to assist her in the war. Who can say that such a restriction is unnecessary?

I agree that, given the necessity for these restrictions, it is very important to see how they are administered, and I agree that they must be administered with a minimum of inconvenience consistent with the objects for which they were imposed. There must be some restriction, otherwise the system would not have been instituted; there must be some licences refused, otherwise there is no necessity for the system. It cannot be expected that they will leave the export trade untouched, but I think hon. Members will find that we have taken every step that we could to make the operation of the restrictions as easy as possible.

In the first place, it is not always realised what a small proportion of our export trade is covered by these licensing restrictions. It is only about 30 per cent. of our pre-war exports to non-enemy countries to which this applies, and even then it often applies only to particular "dangerous" countries, as we call them, where the risk of goods filtering into Germany is greatest. I agree that at the beginning of the administration of this scheme there were serious delays. This was not at all the fault of the civil servants who form that Department, and who not only adapted themselves to an entirely new job with great skill, but have put in tremendous hours of work in order to reduce the delays as much as possible. I must admit, however, that at the beginning we overloaded the machine. We included in this list all the articles which we thought it desirable to include, but, looking back, my own view is that it would have been better, even at some risk, in the early days, of some undesirable exports being made, if we had started more gradually and worked up to the position in which we are now.

I do not mean to say that, even now, the system is perfect or to deny that there is a feeling that in the case of certain individual applications there has been some hold-up due to faulty organisation. But, of course, in the difficult cases where inquiry and consultation are necessary, there is always the risk of some delay. In general, however, I think it is now safe to say that all these applications are dealt with within a week and many of them in a shorter period than that. I happened the other day to meet somebody who was talking about this problem. He had heard mention of it, and referring to the Department he said, "That is the place where they receive 5,000 applications a week and deal with only 300." It did not occur to him that if that were true—and hon. Members can work it out rapidly for themselves—we should only be at the stage to-day of clearing up the applications which came in during the first week of the war. When I challenged him about the accuracy of his information he said he thought he had read it in the "Times." As a matter of fact, the record for the week ended 2nd December was that the Department received just over 13,000 applications and issued just under 12,000 licences. When we allow for inquiries and for cases which proved not to need licences at all, and cases in which licences were refused, it shows that in fact the whole week's applications were almost entirely dealt with during the week.

Sir A. Sinclair

Does the figure of 12,000 include arrears?

Mr. Stanley

The arrears were cleared off some time ago and apart from exceptional cases, as we are working now, the applications are disposed of within a week.

The other restriction for which I am responsible is the requirement of import licences. I do not think anybody will question the necessity for that, certainly not the hon. Gentleman opposite who raised what is, I think, one of the most important questions, which we have to face, namely, the question of internal civilian consumption. Nobody could justify using our hard-earned or hard-saved foreign exchange to import luxuries for consumption in this country or to import things which can be and are being made here. Our exchange is far too valuable for that. It has to be used for the things which we have to get from abroad in order to supply war needs. As I say, nobody can question the necessity of this restriction, but, again, it is a question of administration. I propose to deal with this only in so far as it affects the export trade, because that, after all, is the subject of the Debate. I will say that, in general, in most countries the particular economic effect of the import restrictions upon the possibilities of our export trade is not likely to be great, because we are not stopping purchases from any of these countries; we are only diverting them. When we stop the import of luxuries from America, it does not mean that we stop our imports from America. The probability is that we are buying far more from America, but it is trade of a different kind. Where, of course, this system may have an effect upon exports, is in individual cases where the article imported is either immediately re-exported or forms the foundation of some subsequent export. It is obvious that it is not in our interests to prevent the import of that kind of article, even of a luxury character if it is either to be exported again or is to form the foundation of some export from which in turn we can draw exchange.

Mr. John Morgan

Would it not also affect—not individually—an industry like agriculture, by cutting off the supply of feeding stuffs?

Mr. Stanley

I think the hon. Gentleman is under a misapprehension, but perhaps he will allow me to finish dealing with the point which I was making. I have set up a separate division in the Import Licensing Department to deal with exactly the kind of cases to which I was just now referring. They are not cases in which you can lay down a hard and fast principle, but we are attempting, where a real export possibility can be shown, to license those products. I should be grateful if hon. Members in correspondence with their constituents would make known that it is very important, if an applicant for an import licence has the possibility of exporting goods, that he should make that fact known to the Department in order that full weight can be given to it in the consideration of the application. If I may refer now to the point just raised by the hon. Member opposite, I would say that quite a number of things are included in the import licences not for any purpose of restricting imports but in order that we may control the importation of such things as feeding-stuffs. It is obviously essential that the Government should be able to lay their hands upon the feeding-stuffs imported and the licensing system is used, not to stop the import of feeding-stuffs—for heaven knows we do not want to stop that—but in order to control them so that the Government may be able to ensure their proper distribution.

Reference has been made to another restriction over which I myself have no control, but in regard to which I have been in communication with my right hon. Friend the Secretary of State for War, who has given me every possible co-operation. That is the question of the censorship. The reasons for the censorship are obvious and it cannot be called an unnecessary restriction, but there, again, the administration is the important thing and of course there are difficulties. The hon. Gentleman opposite referred to the case of telephoning to Finland. The reason for the difficulty about telephoning to such countries is that the telephone line passes through Germany. I do not know whether the hon. Gentleman wants to conduct his conversations with Finland through Germany, but in any other case except that of the hon. Gentleman, it would be highly dangerous to allow conversations of that kind to proceed.

I fully realise, however, the difficulties which are caused and my right hon. Friend is making every effort to reduce them. Some of these difficulties are not difficulties of censorship. There are often difficulties of shipping. For instance, the hon. Gentleman referred to the case in which certain goods reached India sooner than the documents relating to them. This may have been due to the fact that at one period shipping was diverted from the Mediterranean while at another time it went freely through the Mediterranean. If the ship on which the letter was carried was diverted, whereas the ship which conveyed the goods went straight through, it is obvious that the goods would arrive before the documents without any blame being attached to the censorship. But considerable modifications are being made, and it is hoped to give a number of further concessions to traders. The Secretary of State for War is fully alive to the importance of commercial communications and is giving them special privileges.

I should like now to pass to the question of the controls. The reason for the system of control has been given before by the Minister of Supply. I do not think anybody will challenge the idea that, with reference to a number of raw materials, there must be some form of control. In those cases where there are large Government requirements it would be an impossible situation if you had the Government and industry struggling for a limited supply of a raw material which they both needed. But I agree that, to a large extent, the fate of the export trade of this country is in the hands of the controllers of the various raw materials. Their neglect or indifference could stifle it, and, equally, any encouragement which they can give to it will prove a great stimulus.

I shall give some account later of the arrangements which have been made with the Minister of Supply, who has willingly co-operated with me in this matter, and fully realises its importance. But when people criticise so hotly the imposition of control and the action of the controllers, I cannot help recalling my own experience and relating it to the House. I am officially connected with only one control. That is the control in the cotton industry, where the controller is responsible, jointly, to the Minister of Supply and myself. That is the only control which started on a voluntary basis, with the controller having no power at all, but the whole of the intervening time, since it was set up, has been filled with violent protests from the industry and a general demand that the powers of the controller should be made compulsory. That is now done and the industry is asking not only that the controller should have the normal powers but also powers possessed by no other controller.

The hon. Gentleman quoted a speech made by the Regional Commissioner of the North-West area who spoke in the approved style of the poacher turned gamekeeper, or, should I say, the gamekeeper turned poacher? Perhaps it might also be likened to Frankenstein abusing the monster which he had created. We must not forget that only a few months ago the distinguished and eloquent gentleman who delivered that speech was one of the creators, the manufacturer almost of the formidable machinery which he now condemns. He waxed almost lyrical about the question of controllers and sub-controllers and sub-sub-controllers—bringing back to my mind a nursery rhyme connected with an insect not usually referred to in polite society. I wonder whether he was aware that the largest industry in the area in which he is the Regional Commissioner had just been asking—almost on the very day he spoke, or perhaps on the very day when he was preparing his speech—that the hated yoke should be placed upon their necks, and had begged me to give an answer on that matter at the earliest possible moment.

Sir Henry Fildes

Would the right hon. Gentleman pardon me if I beg leave to question the accuracy of what he has just stated?

Mr. Stanley

I cannot give way to the hon. Gentleman. There is no necessity to give way to him because I know exactly what he is going to say. [Interruption.] The hon. Baronet was on the Committee on the Cotton Industry Bill, and he then was in favour of the restriction and control of trade.

Sir Percy Harris

That is definitely untrue. I consistently advocated freedom as far as possible.

Mr. Stanley

"As far as possible," but I was glad of the hon. Gentleman's loyal co-operation in passing the Bill. The truth is that these restrictions to which I have referred are not unnecessary; they are not put on just for fun, but they are for the very cogent and obvious reasons that I have given. I agree that if they are badly administered, if they are administered without imagination or without flexibility, they can, whatever the necessity of their imposition, be very dangerous in their effects, and it has been and will be our constant effort to reduce them to a minimum and to see that they operate as smoothly as possible. There is one point which I know has been very grievous to many exporters. It is that they have to go to one Department, and they are then told to go on to another Department, and they have a feeling of frustration, waste of time, and irritation. My right hon. Friend has set up, in the Department of Overseas Trade, a division to deal with inquiries from exporters. An exporter can now go round there or write there with his problem, and if the problem raises in fact matters connected with other Departments, the Department of Overseas Trade will themselves take the matter up with those other Departments, and the inquirer will be saved any of this going from one place to another and will get his answer on the whole picture from the Department to which he has made the inquiry. I think that has been a valuable innovation and one which is appreciated by the exporters. So much for the side of restriction.

I would like now to turn to the other side of the Amendment, to the question of the active steps which can be taken. I do not intend to deal with the details. My right hon. Friend who will wind up the Debate is to-day in even closer association with the Board of Trade than in normal times. It was quite clear that the rather arbitrary distinction between the Department of Overseas Trade, and the section of the Board of Trade which deals with exports could not be maintained in war time without a certain loss of efficiency. The Department of Overseas Trade is now housed in the Board of Trade. The section of the Board of Trade dealing with exports works in close co-operation with it, and my right hon. Friend devotes all his knowledge and industry to both these sections, the expansion and the assistance of the export trade, and he will answer any specific points that are raised.

I want to say one or two words on ťhe general principle of the export trade, because it seems to me that many of the letters and many of the articles ťhat one reads in the Press and many of the things that are said to one miss what, to my mind, is the fundamental principle of export ťrade. I have seen many letters in the Press lately headed, "Great Drive for Exports," "Necessity for New Markets," and you read down and nearly always you come to this, that the only practical instances thať are given are something in the Balkans, something in ťhe way of carrying on economic warfare. Is that the main and only objecť' of our export trade to-day? I think the hon. Member for Seaham, if I may say so, in his analysis was quite right. The first object of our export trade must be to provide us with the exchange with which to buy the things ťhat we require, and in order to do that we must have the volume of export trade which will produce that foreign exchange. I am not for a moment denying the imporťance of the other class of our export trade, the importance of the kind of exports to which the hon. Gentleman referred, the exports which can be secured partly by a diplomaťic campaign and partly by a campaign of blockade, but they cannot override in importance the essential fact that we should in one way or the other provide enough exports to give us the things wiťhout which we can neither fight nor live. There is a very great danger that, if you make too great an effort to force your export trade into new and unaccustomed channels, you may end by blocking up the old, broad, accustomed channels along which the great volume of our export trade is now being and will be done and along which lies the best prospect for the increase in our export trade which we all desire.

These two objects and forms of export trade raise entirely different questions. The one can, I think, proceed, not entirely, but on the whole, on well recognised lines; the other will need entirely new and largely ad hoc methods to deal with it, and, therefore, I will take each of them separately. When you come ťo what I may call the bread and butter exports, no generalisations about the way to maintain and increase those exports are any good at all. Each indusťry in each market is faced with quite different difficulties and quite different problems, and an easy generalisation which ignores these difficulties and problems will not help at all. It really is a matťer of having to get down to every single case and dealing with that as a case on its own. Let me give some examples.

What is our most important and, during war lime, our most valuable export? It is coal. After all, the value to us of exports is the surplus of foreign exchange, the surplus between the foreign exchange that we have to pay for raw materials and the foreign exchange that we receive from abroad. In coal, unlike nearly every other bulk export that we have, you have a substance where there is no foreign exchange payment for raw material at all. The markets are clamouring for British coal, and I do not think hon. Members would say that the restrictions applied to the export of coal have been found in any way oppressive. Our coal exports are expanding very considerably, and the hon. Gentleman opposite said, quite rightly, that although he himself thinks shipping does not usually create any difficulty in our export trade, because the bulk of imports is so much greater than the bulk of exports, yet in the coal trade, and perhaps in the coal trade alone, shipping s the only difficult factor.

Mr. Shinwell

But you have to consider Whether it is desirable to purchase from certain countries to utilise your shipping to the best advantage.

Mr. Stanley

There is no necessity to make special purchases. We are purchasing from those countries already, and the question here is the provision of the ships, going out to bring back essential purchases, to take out this coal. This one major difficulty in the way of further increases is being actively pursued from day to day by the Minister of Mines and the Minister of Shipping. It is not a question for generalisations. It is a question of day-to-day watching of the opportunities for export and the position of the ships, and seeing that the ships, when available, take valuable exports. The difficulty in by far the largest block of essential exports is the question of supply. The hon. Gentleman who seconded the Amendment was quite right, and I think that nearly all the critics of our export policy at the moment are quite wrong. Over the large range of our export trade to-day, markets are, at any rate at the moment, not the real difficulty. We have evidence from a large variety of traders that not only are inquiries up to their accustomed level, but that they are increasing, and in different parts of the world we have not only the same markets as we had, but bigger markets waiting for our goods, and the difficulty is not the difficulty of markets, to which reference is nearly always made in debate, but it is much more likely to be the difficulty of supply.

It depends on capacity, raw materials, and desire—desire on the part of the exporter to take advantage of the inquiries and the opportunities which are offered. With regard to capacity, that, although it will become a very important problem in the future, is not a big one at the moment. We are there in the closest co-operation with the Ministry of Supply in order to ensure that, as the war effort develops more, and as more capacity has to be taken over for Service requirements, sufficient shall be left for our export trade. But it is not enough only to have sufficient capacity. You have also to have the right kind of capacity, and one of the difficulties which we are likely to encounter is that, taking it on the whole, it is the largest manufacturing concern which does the most export trade and it is the largest manufacturing concern to which the Minister of Supply is perhaps most likely to turn. It is essential that wherever possible that type of manufacturing capacity which is already used to the export trade should be left, and that where it is taken over, if the lay-out of the factory makes it practicable, as it does in some cases, even though most of it is turned to war work, sufficient should be left to carry on an export trade as well.

The second and, for the moment, the greater difficulty is the question of raw materials. You have here very often to meet this increasing demand for our products for export at a time when unusual calls are being made by the Service Departments on the raw materials for that export, and, of course, it is a question of the priority which is to be given to the various users. There is, first of all, the priority between the Services and civilians. I think everyone will agree that the Service requirements must have some preference. It is quite clear that you cannot starve the Army in the field, the Navy on the sea, or the Air Force in the air, but I certainly should not admit that every Service requirement has to have priority over every civilian requirement, including exports. There is a Priority Committee, Departmental and Ministerial, on which the Board of Trade is represented at which the difficult questions of allocation are discussed.

Mr. Boothby

Who presides over that committee?

Mr. Stanley

Lord Chatfield presides over the Ministerial Committee and the Parliamentary Secretary to the Ministry of Supply presides over the Departmental Committee. It is not only a question of priority between service and civilian demand, but a question of priority inside the civilian allocation—the allocation between home consumption and the export trade. I think everybody will agree that after the bare necessities have been satisfied for the domestic consumer, the export trade must have priority. To translate that into practice needs the active assistance of the Minister of Supply and the controllers of the various raw materials, because it is through the supply of the raw materials that you can direct the activities of the manufacturers into the export trade channel. My right hon. Friend has been conducting the talks with the export industries to which the hon. Gentleman took exception, and, at the same time, conducting the resultant talks with the Ministry of Supply as to allocation.

Mr. Holdsworth

Has the right hon. Gentleman or the Department of Overseas Trade direct access to the supplier of raw materials? It seems all wrong if he has to go through the Ministry of Supply. Suppose he knows that a certain quantity of raw material is required and is available, can he have direct access to the controller of it?

Mr. Stanley

I do not think there is any feeling of that kind between the Board of Trade or the Department of Overseas Trade and the Minister of Supply. In fact, in a recent case where my right hon. Friend wanted to see a controller, the Minister of Supply and he saw him together and thrashed the whole thing out. I should like to give a couple of instances where this method has been successful. There is, first, the case of linen. There is a large demand from America for our linen products. Flax is one of the most difficult matters in the world as a whole, and has been for some time, not only since the war started. Since the war began my right hon. Friend has secured an effective arrangement whereby, after urgent Service demands have been met, almost the whole supply of this essential and valuable import is available for the export trade. Hon. Gentlemen may have seen another case in to-day's Press, although perhaps they do not read the bits which are more favourable to what the Government have been able to do in regard to the export trade, but read the less favourable.

Sir A. Sinclair

The more favourable are more difficult to find.

Mr. Stanley

That is exactly the point: I am making. Whereas criticisms of the Government are placed on the front page, those statements which appear to approve their actions take a share with racing in the inner pages. Hon. Members will have seen a statement about the motor-car manufacturers. They have done what many industries have done, although before the war motor manufacturing was an intensely individualistic industry They have now come very closely together on the question of the export trade. In communication with my right: hon. Friend and the iron and steel con troller, they have worked out a plan whereby all raw material necessary for the export of cars, which they think they will be able to maintain, is assured to them. The result is that they are able to-day to issue an optimistic statement as to the possibility of the export of motor cars.

Major-General Sir Alfred Knox

Which they have put on the front page.

Mr. Stanley

Sometimes the front page is the advertising page. May I say a word about the last point, that is, the desire of the exporters. It is not only capacity and raw materials that are required, but the desire to export. We can be immensely helped by trade associations. They alone can give us some accurate estimate of the amount of raw material which is likely to be required. It is only if we can get some accurate estimate that we can present the Minister of Supply with our demands and he can form an accurate picture of the total allocation. Some trade associations have been helpful, but some have not been of assistance so actively. It does depend on the willingness of individual manufacturers. There are plenty of Government orders about. Orders for the home market are easy to execute. None of them are dependent on the export trade. We want to do everything that we can to remove the obstacles in the way of exporters, to remove the restrictions, and to give a fair chance of exporting, but we can only do that if in return the manufacturer himself is prepared to take some risk, is prepared to give up some part of a safe Government order or a safe home order in order to share in the risk of the export trade.

There are one or two other difficulties, especially in the case of the cotton industry. Cotton, unlike other industries, cannot benefit from the withdrawal of German competition. Germany was hardly a competitor in the cotton market, but she offered a valuable market for some of our cotton exports. Cotton, perhaps, has shown the most disappointing record of exports since the war started. It has been largely hampered, I am afraid, by the question of price. I have been in consultation with the controller and the deputy-controller this week. They have put up a scheme to me, and I hope that in the next few days it will be possible to issue something which should prove of real advantage to the export trade in Lancashire. The other difficulty which one encounters is largely in the heavy engineering trades, where the period of manufacture is long and there is uncertainty as to prices in the future. Demands have been made that the Government should come to the assistance of the exporter who, owing to these uncertainties, is unable to make a firm tender and, therefore, loses the order. We are considering the possibility in appropriate cases of having some scheme which would make it possible for firms to make firm tenders and to obviate the loss of orders.

I am told to-day and in the Press that we must abandon orthodoxy. I do not think that either my right hon. Friend or I have in the last year or so been particularly orthodox in dealing with the export trade. We were responsible for the introduction of political credits and for the negotiations for the American barter scheme, even in peace time, and I can assure the House that we are not likely to be frightened away from any scheme because it is unorthodox, and we will exclude nothing that may be of advantage. I would suggest that when exports can be increased by ordinary methods, as I believe they can be in many markets and many commodities, let us adopt them and let us keep our unorthodox and often expensive methods for cases where they are necessary.

I come now to the other class of export trade, the class where the risks are not purely economic and are not merely essential in order to get foreign exchange with which to buy the goods we need, but where there enters an element, either great or small, of politics. It is not an easy subject for me to discuss at the moment, at any rate in detail, because it is clearly not in the public interest, and perhaps not in the interest of some of the people with whom one is negotiating, that one should disclose one's intentions or negotiations, and sometimes not even one's achievements. Therefore, I can only speak on this matter in the most general terms. We fully recognise the importance of this type of export as an assistance in our economic warfare. We fully realise that in many cases, if this is to be made effective, the old-fashioned methods will be inappropriate and that it is not and cannot be a question merely of removing restrictions and making raw materials available and even of conducting a campaign of advertising. Further, we realise that in many cases speed is essential and that the opportunity, if it is not taken, may never occur again.

I believe that in the various Departments we have all the powers that are necessary to make the kind of bargain with any one of the countries which we have in mind. The real problem is to see that those powers are collated and that, instead of being used by one Department without reference to another, perhaps to the detriment of another, a picture of the whole thing should be formed and all the powers where necessary should be used together. We have set up a subcommittee of the Economic Policy Committee which is charged with these functions only. It is a ministerial committee presided over by the Minister of Economic Warfare, and it includes ministerial representatives of the Board of Trade, the Ministry of Supply, the Ministry of Food, the Ministry of Shipping and the Treasury. It may be able to play a part in any bargains of this kind. There is below it a committee on the official level over which Sir Frederick Leith-Ross presides. It is the duty of that committee to consider the purchase of goods from or the supply of goods to neutral countries where the element of economic warfare arises. Having round the table all the Departments with both interest and power in this respect, we are able to get a united policy with regard to a particular transaction or a particular country. It is then possible, when that has been done, for executive action to be taken by the various Departments within whose power it is in accordance with the decision arrived at by the committee as a whole.

Mr. Shinwell

It is important we should know what this commitee actually does. Do I understand that, having collated all the facts and come to a decision, the committee has the power to execute the decision, or must it go to the general committee over which Lord Stamp presides, or must it go to the War Cabinet?

Sir A. Sinclair

Can the right hon. Gentleman say when those committees were appointed?

Mr. Stanley

I cannot say precisely, but some three weeks or a month ago. With regard to the question of the hon. Member for Seaham, it would, of course, depend upon the view which was taken by the chairman of a committee. The power lies in the various Departments, and where they consider it proper they can act immediately. If there were any divergence of opinion, a failure to reach agreement, or the matter raised some very importanet principle, then the Chairman of the Committee concerned could refer it to the Economic Policy Committee of which Lord Stamp is a member. Generally the committees are composed of those who have executive powers in this matter. The idea is to enable them, in these committees, to coordinate those executive powers and thus to implement decisions without reference elsewhere.

Mr. J. Morgan

Have they in fact acted on any situation.

Mr. Stanley

Yes.

Sir A. Sinclair

I do not wish to press my right hon. Friend to give us further information after the long speech he has been kind enough to make, but, obviously, this is a matter of great interest, and it is a fresh matter to the House, and perhaps it would be possible for his right hon. Friend when he comes to reply to give us some further information about the work of these committees and the transactions which they have authorised.

Mr. Stanley

My right hon. Friend is a member of the committee and he can tell the House something of its operations, although I must make it clear that it is impossible at the moment to give details of particular transactions. I could point to the fact, which hon. Members have seen in the Press, that there are Government representatives in a number of foreign countries, including some of the foreign countries to which reference is most often made in the Press; that we have a visit from a very distinguished Turkish delegation upon commercial matters at this moment; that other negotions with many countries are proceeding; that war trade agreements are being discussed by the Ministry of Economic Warfare with a number of countries; that there is an agreement with Italy for economic collaboration and—to meet the point as to the possibility of developing exports to South America in view of the purchases we make there—we have come to a temporary arrangement with the Argentine for the disposal of the proceeds. The Chancellor of the Exchequer detailed the powers which Lord Stamp's Committee has to deal with economic policy. I can only say that since those Committees have been set up those responsible for export trade have received very considerable help from the action of Lord Stamp's Committee in co-ordinating the efforts of the Departments.

A great deal has been said about the demand for an Economic Ministry. That, of course, is a matter for the Prime Minister. The Chancellor of the Exchequer in his previous speech said that his mind was not closed to any improvement of the machine set up, if it could be shown that an improvement would be secured. I can only say on behalf of myself, as I am sure I can on behalf of all my colleagues who are concerned with economic affairs, that should the Prime Minister decide to appoint such a Minister to co-ordinate our efforts we should work with him loyally, helpfully and in the most friendly spirit. But let the House not make any mistake. If the Prime Minister appointed such a Ministry it would not be in substitution for the system of committees now set up but in addition to it. People are apt to laugh whenever one mentions the word "committee," and draw an absolutely fallacious analogy with the business man. They say that a business man does not need a committee but comes to his decision at once and implements it. The business man has not to think of anything except his own business, and if he knows his own business he can come to the decision himself, but every decision that is taken in cases of the kind which we are discussing now may affect half a dozen Departments. It may affect the Foreign Office, the Ministry of Shipping, the Ministry of Economic Warfare and others. There is nobody, not the greatest Napoleon that business could find anywhere, who could know the ins and outs of all those Departments. He could not know how any single action reacted upon the affairs of each one of them, even if he could say how it would react on his own Department. It is only by getting representatives of each Department together, so that they can explain what the reaction will be upon their Departments, that one can form the material upon which eventually this economic—

Mr. Shinwell

It is policy.

Mr. Stanley

But you cannot decide policy without doing that, without know- ing what is the effect not on one Department but on all Departments, and for that a system of committees of this kind, whoever presides over it, is absolutely essential. I must apologise to the House for the very long time I have taken, but I have waited for some time for a chance to tell the House some of the ideas which we have upon this very difficult subject. I believe that the export trade to-day is a good deal better than has been stated or is generally believed, but that does not relieve us of the necessity of maintaining and increasing it. I do not believe that any improvement which can be brought about will be so much the result of any startling or dramatic action as of constant attention by the Government and all Departments to the particular problems and the particular difficulties of the various industries, and meeting those difficulties with flexibility, and, if you like, unorthodoxy. Further, we must be assured of the willingness of industry to co-operate. Granted those two things, then I feel that the export trade can be made to play a really decisive part in the struggle in which we are engaged.

6.37 p.m.

Colonel Wedgwood

The speech of the right hon. Gentleman has been quite worth hearing and worthy of the occasion. This Amendment has very ably and suitably come from the Liberals in this House, with a view to increasing the freedom of our export trade, because it is only by increasing its freedom that we can increase the bulk of that trade. The Minister said that he realised the vital importance to us of increasing exports. Without increasing exports we cannot win the war. It was easier in the last war. Then we had credit, foreign capital, and could borrow money. Ultimately, when the position became more difficult, we had the alliance with America, which provided us with goods from outside. But in this war we start without any credit or much capital abroad, without being able to buy anything from abroad unless we can send something to pay for it. That makes the position entirely different. I would emphasise this, that the winning of this war depends upon our being able to buy from abroad, and therefore the needs of the export trade are as important to-day as the needs of the Army in France or of some of the other branches of the civil and fighting services.

We must postulate that if we are to save the position. It is not sufficient that we have got back to the August level of our export trade. We have to do far more than that. We are facing an expenditure of £2,400,000,000 a year, practically the whole production of this country. In the last war we could run into debt. In this war we have only got the production of the country to rely upon in order to pay our way. Therefore, I hope the whole House will echo the point that the export trade of this country is as important to the winning of the war as any branch of the fighting services. When once that proposition has been laid down a great deal of the case which has been made out and made out from all sides of the House in favour of control and of licences falls to the ground, and it is worth while to clear up one or two economic misconceptions which apparently still find harbourage on the benches opposite. In the first place, it is equally as valuable for this country to export £100 worth of coal as it is to export £100 worth of motor cars—equally valuable and equally essential. Also, there is exactly the same amount of labour involved in £100 worth of coal as in £100 worth of sewing machines. That is an economic truth which we have got to realise. Rightly, we can draw no distinction between the raw material exported from this country—what is called raw material, but which is the finished product of the mining industry—and the finished product of the engineering industry. They are both worth what they will fetch, and in that sum there is an equal amount paid to labour.

Mr. J. Morgan

When the right hon. and gallant Member says "labour" he means, I take it, the coal labour in this country, but the labour in the case of the sewing-machine may have been undertaken, partially, in some other country.

Colonel Wedgwood

I do not mean anything of the sort. If the raw material comes from abroad it is paid for, when it is brought here, by goods which have been made by British labour here, and in the ultimate result the whole product is the product of labour here, though the cash may have gone through various channels. We must then consider whether these controls are hindering the export trade of this country. It is admitted that they may help our Fighting Services, but if the export trade is as important as are the Fighting Services, is that control doing any harm? One of the arguments used again by the right hon. Gentleman is that we need all the copper—for instance—that we have got in this country, and therefore we ought not to export any article which has copper in it. To my mind that is based on a complete fallacy. If it pays to use copper in an article which we want to sell abroad it is as important that copper should go into that article as that it should be reserved for our munition factories, because the article exported is sold in order to enable us to import what the munition factories want. It is merely a form of economical exchange. It can be argued that one must not send a shipload of copper out of this country, there is something to be said for that, because we do not know how long it would take to get the equivalent back; but when the copper in an article for export forms a small element in that article, any obstruction is upsetting a valuable export, obstructing trade and benefiting nobody.

The export and import licences are drawn up by boards whose single-minded intention is to preserve in this country what may be wanted for armaments. That is justifiable from their point of view; but a knowledge of economics should tell them that it is better for armaments that we should be able to export and import goods rather than to sit jealously upon our supplies of raw materials and thereby to hamper our export trade, because at some time or other we may want that raw material. The miser's policy is bad for trade. I do not apply that only to these export licences, which have got much easier, but to the import licences as well. We are afraid that the people of this country will consume luxuries; believe me, the 7s. 6d. Income Tax and the need to save does not leave much room for luxuries. An automatic check comes into operation. Although a stronger case may be made out for what I call sumptuary legislation and the prevention of lipstick coming to England, yet even there the old law generally comes in, that nature finds its own level. If trade remains free, the people of this country will get what they want; and if they cannot afford luxuries they will want food.

From an economic point of view there is not much advantage to be got from these various licences. Exactly the same applies to the control, which is really a priority board deciding which particular section of production shall have the raw material. The various controls have the power to decide whether the export trade shall get its raw material and carry on, or whether the Fighting Services shall. Controls are necessary at the present time in order to prevent the prices of raw materials from soaring up, but do let us realise that the people who are on these controls ought to have the Board of Trade mind. They ought to realise, as we should, that the export trade is as important as the Fighting Services. That is at the back of all possible success in this war. Therefore, the people who are on these controls must really and honestly try to do their best and not their second best for the export trade. The manufacturer knows what he wants and, if you prevent him from getting some of his raw material, not only is the product not trade but all the other raw materials and his machines are lying idle and wasted, while the workpeople have no work to do. You do far more harm by preventing manufacturers getting the raw materials that they want for their trade than by supplying the manufacturers of munitions with brass for guns or hats when it is not being used. It seems a hard thing to say, but this is a war in which we have no credit and no resources, but what we buy by the sweat of our brow.

There is another thing. It is not only licences and controls which are hampering trade to-day. All manufacture for export is very heavily hit by the additional taxation which has been laid upon it. A great deal of this taxation does not appear in the Budget, but the whole House knows of it. Take the case of the compulsory insurance of stocks. That is called insurance, although there is nothing to insure against. It is a compulsory levy upon all parts of the country, whether liable to raid or not. There is precious little in this country which is liable to raid, except Orkney and Shetland, and they are not insured. There is a very heavy taxation which is now imposed principally upon the export manufacturers. Then consider export to America; there is another unvoted tax levied on all exports from this country to America. The exchange is rigged. It is what they call pegged; that is to say, the is said to be equal to 4.06 dollars. As a matter of fact, the figure of the free exchange runs down to 3.7 dollars a difference of roughly about 9 per cent. If we can sell on the free exchange to America we should be able to get a market which is still open there at present. The fact that the exchange is paid at 9 per cent. above the real level is done in order that we may purchase from America more cheaply than we otherwise could. We purchase from America everything at 9 per cent. less than if the exchange were left free.

Sir F. Sanderson

In exports the exchange is in our favour.

Colonel Wedgwood

Not so much as it ought to be. Before the war it was 4.86 and it now is called 4.06; although really it is 3.7. The exchange is in our favour, and that is a reason why we should be developing our exports with America at the present time. This pegging of the exchange is a bonus on imports into this country, just the exact reverse of what every honest Conservative ought to want. In addition to that, you have at the present time a much larger burden thrown upon manufacturers in the export trade by the enormous black-out expense that has to be undertaken, in the obscuring of windows, the digging of air-raid shelters—those funk holes that are filled with water and nothing else.

There is something worse than that. The controllers at the present time control the price and the supply of raw materials; they also control much more rigidly the supply of capital to the factories. Every manufacturer in this country would much sooner have a Government contract than look outside. Certain trades are flooded with Government contracts, and they have no need to think of the export trade or to press for an increase of exports to America, north or south. With Government orders rolling in, why should they? I believe that to be the real reason for the fall in exports after the beginning of the war. They believe it is a duty to scrap a foreign order and fill an English one. [HON. MEMBERS: "No."] On these benches we have all been asking for opportunities to create new markets, and above all to keep our own markets that we have had these many years, but if every manufacturer is to take Government orders and forget his foreign customers we shall end up by Japanese and others coming in and taking our place. We should now be extending the export trade of this country, so that at the end of the war we shall be controlling, as we were at the end of the Napoleonic wars, the trade and manufacture of the world.

If the engineering works of this country are filled up with Government orders it is vitally important that those other manufacturers should have access to further capital to build new works and new extensions, not for Government orders but for exports first. At the present time further expenditure is absolutely shut down. The opportunities of filling the vacant markets of the world with the demands of all the peoples of the world, who cannot buy continental goods any longer, cannot be seized unless people are allowed new factories in which to produce goods and, above all, to call upon that 1,500,000 unemployed to fill the places in the establishments and to make the goods. You have to remember the trade side and the export side if you wish to absorb that mass of labour, and it will have to be an easier job to start a new competing factory. Unfortunately, there is nothing which existing manufacturers in every trade hate more than additional competition from a new factory, but the interests of the public are diametrically opposed in that respect to the vested interests of the manufacturers in each industry. The Government ought to see that it is as easy for the new man to start as it is for the existing people to extend, and it is not so, as long as the sources of new capital are controlled. People cannot now get money to build a new factory unless it is a munitions factory. It is as important to help the export trade as it is to fill a munitions factory and to fill dumps with munitions in France.

Without our export trade, our credit goes and we can do nothing. People will starve and we shall lose the war. Keep up your export trade and we can put Hitler where we put Napoleon. But if we were to set up a new department under a new Cabinet Minister and a new committee, thinking we can solve our difficulties in that way, we should find there is no chance of doing so. The only chance is in seeing that trade is free. The only way in which we shall win the war is by developing our industries, and the way to win the peace is to have those industries running and in production for the export trade, in place of those industries vested in the perpetuation of war.

6.59 p.m.

Mr. Amery

I am sorry that more people were not in the House to listen to the opening speeches in this Debate. The hon. Members who moved and seconded the Amendment, as well as the hon. Member for Seaham, made, if I may pay my tribute to them, speeches of remarkable cogency and from beginning to end, constructive. Those speeches were followed by my right hon. Friend the President of the Board of Trade. What am I to say of his speech? It was charming and mellifluous as always—a speech which was explanatory, deprecatory, mitigatory and consolatory, yet to me, at any rate, not wholly satisfactory. It might have satisfied me more if, while listening to him, my mind had not gone back to so many speeches of the same type and construction with which the present Lord Chancellor, then the Minister for the Coordination of Defence, allayed the fears of the House in regard to our military preparations, and, deprecating the so-called exaggerated speeches of my right hon. Friend the Member for Epping (Mr. Churchill) and others of us, suggested, that things were really progressing very nicely.

My right hon. Friend did indeed, succeed in somewhat toning down the vehement criticism which was expressed, among others, by my right hon. Friend opposite about the effect of the various controls on our export trade. All the same, that was only part of the criticism which was made. The greater part of the opening speeches were not so much concerned with the fact that we were not carrying on business as usual, but with the fact that we were not taking advantage of our opportunities and of our desperately urgent necessities in order to do much more business than usual and to do a great deal of unusual business. They went on to suggest that, in order to get beyond business as usual, a more effective central direction and impulse was needed. My right hon. Friend's answer was, in effect, that there are Committees which he has found helpful, and that we ought not to speak too unkindly of them. But who did? Committees are necessary in business and in politics, but they are only valuable if they help somebody in direct control to see that something is done, and done swiftly. Of course, that raised what is really the central issue of this Debate and to which, for obvious reasons, my right hon. Friend could not reply. The trouble with this Debate is that we are being given purely Departmental answers to fundamental issues which transcend Departments, issues in regard to which the Prime Minister, or possibly his next spokesman, the Chancellor of the Exchequer, alone could give a reasonable reply which could satisfy the House that what is necessary is being done and is being done with the utmost vigour.

With regard to the speech of the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood), I find myself in a much greater measure of agreement with him than I usually do with regard to economic questions. His speech raised an issue which is, perhaps, an even wider issue than that of trade, namely, whether, in this as in so many other fields of national activity, our conduct of the war is not being dominated far too much by the negative, precautionary spirit to the detriment of the positive, aggressive spirit which alone can ensure victory. You cannot win victory on the battlefield without casualties. To take precautions against casualties is, no doubt, very laudable, but only so long as they do not prevent the success of the operation itself. This applies just as much to the problem of export and import trade as it does to the conduct of war in the air, at sea or on land. We cannot possibly hope to win our economic war if the one objective of all concerned is to prevent a casualty here, in the export of some small fraction of copper in a manufactured article, or a casualty there, in the shape of an import which is not particularly desirable, or a casualty somewhere else in the shape of some small modicum of foreign exchange, when the export itself would create more foreign exchange, buy more copper and make it less necessary for us to import. If there is one slogan that would certainly lose us this war it is "Safety first." That is the slogan which almost every department and control has quite instinctively adopted, especially towards the effort of any other department or any private individual. That is a perfectly natural and inevitable result of the absence of proper positive direction and impulse from above—from someone who should be concerned with and thinking of one thing only, victory. So far, in a very large measure, our handling of the economic problem has been negative. That, at any rate, is the opinion of the whole of the business world with which most of us come in contact.

I think it was a mistake on the part of the Prime Minister to dismiss so curtly the letters and articles from business men and economists like Sir William Beveridge who have written in the "Times" or the "Economist" on the need for central direction and the easing off of restrictions. Again, my right hon. Friend the President of the Board of Trade rather lightly dismissed the very forcible and vehement utterance of Sir Warren Fisher as that of a gamekeeper turned poacher. The authority of Sir Warren Fisher is not only that of a man who has been head of our Civil Service, but it is in particular that of a man who is regional commissioner of the most important industrial and commercial section of the whole country, and who has been in contact day by day with the complaints of the business world. He has not invented this criticism as a result of his past Civil Service experience. It is the reaction of an able man to the facts which have been brought to his notice. Do not let us under-estimate the damage done by insufficiently co-ordinated control, with each controller playing for safety, together with all the taxes and the blackout and other difficulties imposed upon our trade.

Somehow or other, export trade has to be kept up on a far more formidable scale than we have known. The last war was won largely by our accumulated capital and by the credits we were able to get from the United States. Those credits are closed to us, and as for accumulated capital we may have a very large nominal capital in foreign investments but the proportion of them that can be mobilised, that can be sold in America, for instance, is very small indeed. We shall not win victory by our capital. We have got to earn victory, as we go along, by our export trade and by saving on our home consumption. It is vital to get ahead with exports, and to get ahead with them in any way that we can. I entirely agree with what the hon. Member for Cardigan (Mr. O. Evans) said, that we have to dismiss all previous orthodoxies in this matter. We shall have to adopt Free Trade methods, Protectionist methods, Socialist meťhods, as they fit the needs of each particular case. Let us get rid, at any rate, of restrictions to the fullesť extent that we can. I should almost like to get rid of them altogether for a short time, in order to let things get into a normal swing again. At any raťe, do not let us impose steam-hammer restrictions and licences upon such small things as the innumerable components of a lavatory cistern to which the hon. Member for North Cornwall (Mr. Horabin) referred. Let us not worry de minimis Let us, at any rate, deal with the small items by some method more flexible and automatic than that of specific licences. There are cases where the method of duties coupled with drawbacks might be easily applicable, putting a substantial duty on the raw material in order to diminish its home consumption, and giving an equal, or even higher, drawback on the exported finished article in order to encourage the export trade. It is a great pity that the accumulated experience and knowledge possessed by the Import Duties Advisory Committee have not been utilised. That committee has been scrapped, instead of being told to help us, as iť might, over a large part of our economic field. We should see whether they could provide a method more automatic, more flexible, at any rate for a good many articles, than is provided by the heavy-handed machinery of departmental circumlocution. At the same time—and here I differ from the right hon. and gallant Member who has just spoken; I find myself more in agreement with the hon. Member for Seaham (Mr. Shinwell) and previous speakers—it is not enough to rely upon individual unco-ordinated activities. Control is not ťhe answer. What is wanted is direction, help, stimulus; not "Thou shalt not pass" from in front, but a "Get on" from behind.

Colonel Wedgwood

As much advice and information as you like, but no control.

Mr. Amery

Well, let us say "help." Afťer all, think of the difficulties that the right hon. and gallant Member himself emphasised. Think of the business man to-day. He cannot, without some posi- tive help, counteract all the handicaps which the war imposes upon him. He cannot get access to his markeť. It is necessary that there should be some form of Government help to hew the way for him through the jungle of present-day obstructions, which are inevitable, as well as getting rid of unnecessary restrictions. There are many ways of doing this. I will touch on only one or two ways in which the Government can help. They can, for instance, make blanket trade agreements with specific countries. That would meet the poinť of the right hon. and gallant Gentleman opposite. They can do what the Germans have done, and fix a specific exchange rate for sterling adapted to the country concerned. Thať would be a considerable help to traders. But we may have to go much further. We may have to take a much broader and more generous view of the necessity for export credits.

We may very well have to give, as I. suggested just now, drawbacks on textiles and other goods, substantially higher than the duties which are paid. During the Napoleonic War we largely paid our way as well as creating a cotton industry which dominated the world for a century afterwards, by an export bounty on every pound of cotton piece goods exported. I see no reason why in the case of silk, for instance, a luxury article, we should not have a very high duty on the raw silk but such a drawback or the exported goods as would greatly encourage the industry. The same with wool of which we have bought such vast quantities. Let us sell as much as we can in the form of manufactured woollen goods in order that we may be able to buy munitions. Let us give special rail and shipping rates in order to help our trade. There is no end of ways in which the thing can be done if you once get away from the idea that you have to stick to sound business principles, to the principle that, in the words of Presumption in "Pilgrim's Progress": Every vat must stand on its own bottom. In every market where British trade cannot come within 5 per cent. of meeting foreign competition we should see to it that in one way or another, by the help of the Government, British goods are made 10 per cent. cheaper. Is it not worth while to give the sprat of 10 per cent. in order to get 100 per cent. of foreign exchange to be converted into American aeroplanes, or other munitions? In time of war we ought to jettison all the essentially small-minded considerations which individual business men have to consider, of immediate profit and loss for themselves. The Government will get far more than the amount of the subsidy indirectly in the taxation that that export will afford, quite apart from the immediate help that it will give. Here again, I think the hon. Member for Seaham made a valuable suggestion, that the Government should encourage the formation of export companies or associations concentrating on a particular market or group of markets. That is how in Elizabethan days we nursed our import and export industries.

Then there is a question which is not as important in volume, I admit, as that of the general fostering of our export trade, but is a most urgent problem—the question of underselling and out-bidding our enemies in those markets to which they still have access. My right hon. Friend spoke in general terms, indicating that the problem was recognised, that a committee was sitting on it, that something was going to be done. But, good heavens, why has it not been done in the last three months? During that time we could all give instances of opportunities lost. Something like 120,000 pigs were bought by Germany in Rumania and Yugoslavia. Would it not have been worth while paying almost any price for these pigs even if they had had to be thrown into the sea? I heard the other day of another case where we neglected opportunities for buying the surplus hemp of Yugoslavia which Germany bought up in bulk, and is now retailing to us, at a very substantial profit to Germany.

At this moment we ought to be urging the sending of British missions all over the world as evidence of good will towards these countries. There is a Turkish mission sitting at our doors. What is their position? Turkey is not a rich country so cannot afford to accumulate her crops for another season. She has to sell to-day to some one, her nuts, her figs, her oil, her tobacco, as well as a good many other things we would be willing to buy. If we do not buy them within the next two or three weeks they must be sold to Germany. Countries like that cannot help but sell. Surely that is the kind of proposition that a big business firm would clinch in an hour, and there ought to be somebody in this Government who could clinch it in an hour, and then see afterwards how details as to price and so on could be arranged. Really it is heart-breaking to feel that the machine is not moving. I have had so many people come to me and say that they have raised this and that suggestion, on the face of it some perfectly obvious and reasonable suggestion, agreed to by the Departments to which it was presented, but which has never come to anything because it had to have the permission of this Department and that Department, and if it involved the slightest fraction of expenditure it had to go to the Treasury, and, of course, the Treasury always vetoed the expenditure; if it was domestic, it was inflation, and if it was external, because it was a loss of dollar exchange. With that attitude of fear we shall never get out of our trenches, we shall never defeat the enemy in the field. That is one aspect of the problem.

There is the direct help which the Government ought to give to our industries to enable them to export, and there is also another form of help, no less essential and no less important, which they must also give. They must enable this country to save as well as to earn. It is essential that our home costs and consumption should be kept down. As far as the home consumption is concerned, that might automatically be kept down by the mere rise of inflationary prices, involved in the vicious spiral of increasing wages and increasing prices. That is a very unsatisfactory form of restriction and one that weighs most greatly upon those whose needs are greatest. But that form of restriction only paralyses the export trade. If the export trade is to be kept up we must keep down our home level of prices. Therefore it is essential that the Government should make a determined onslaught now upon this vicious spiral, which has already taken quite a number of turns upwards. This is not a distant menace but a very present one. It is a horse which is already running away and can only be stopped by a very determined and skilful rider.

There are many methods by which that problem can be dealt with and many points from which it can be attacked. Rationing is one of them, anti-profiteering legislation is another. I am inclined, with Mr. Keynes, to think that neither of these by themselves would carry us very far. We may well have to give before long very serious consideration to his suggestion of some system of compulsory savings, or deferred payments, as he now prefers to call it, which will inure to the benefit of national expenditure, keep down wages and salaries and yet retain them for the future social benefit of those who have rightly earned them. Meanwhile, I have no doubt that something can be done in that direction by a really vigorous prosecution of-the campaign for national savings certificates. Personally—and here again I am again unorthodox—I believe that to the existing schemes of saving you might quite well add one which might appeal to the more sporting instincts of the average man, competing with the football pool, a system of savings coupled with substantial prizes available after the war. Then there is the turn-over tax. That, again, if applied to the right articles could raise a great deal of money and do much to keep down consumption.

Lastly, there is the whole wage question. In France they have taken the bull by the horns and have practically stopped all wage increases. Here, at any rate, we ought to be very careful to consider on w hat principle wage increases are granted when the cost of living rises. The almost inevitable tendency at present, when the cost of living rises, is to adduce the example of men with large families and ask, "How can they live on that wage?" and then, instead of making special provision for these large families, to give a wage increase all round. That at once benefits a vast majority of men with no or small family responsibilities and, therefore, creates a volume of spending power not required for necessaries but inevitably used for other purchases which send up prices and wages still further. If we are to have wage rises in future, let them be strictly adjusted to family needs. Let the additional payment be in direct proportion to the number of members in a family and then we shall have the satisfaction that, while we have met real needs and have ensured the future of our children, which is the one asset which we must save for the future, we shall at any rate have done something to check the unregulated rise in costs.

Mr. Kirkwood

I would like to put a question to the right hon. Gentleman. He is suggesting that the natural consequence of the rise in prices of necessities, is that the workers make application for increased wages, and he is suggesting that they should get increases according to the size of the family. Would he apply the same method of procedure to those who do not belong to the working class?

Mr. Amery

As far as it could be made applicable, I certainly would, and in all our system of taxation, I would definitely make much more substantial allowances to people with large families than are made at present. I must not delay the House too long, but I want to say something about the structure of our economic machine, which was the underlying argument of all the earlier speeches. For the purposes of war everyone practically is agreed, except the Front Bench itself, that we must have some effective central direction and control in the hands of one man with driving power. You must have an organisation through which, on the one hand, policy can be framed, and, on the other hand, through which policy can be directed to each market and to every kind or group of markets. We want a general staff on the one hand, and on the other hand we must, somehow or other, replace the purely functional grouping of our Departments and controls, or at least harmonise their organisation, with an organisation on a geographical basis, directed towards the various economic battlefields. More than that, it is essential that the Minister in charge and his direct subordinates should have ammunition which they can fire away without Treasury permission. They should have money at their disposal, within certain limits, which they should be able to use at once. That would enable them to come to instant decisions and not have to communicate first with a Department whose one idea is that every expenditure delayed is something gained, and which can never instinctively get away from that.

I may be told that all this has been recognised, is being examined and considered. That is not good enough. What is required is action, immediate and whole-hearted action, sweeping change, and not the kind of mild modification which would be admirable if we had unlimited time before us. We hear a great deal too much about time being on our side. That is a very dangerous phrase and one which may well act like a deadly opiate, both on Ministers and on the public. Time may be on our side in one sense, but only on one condition, and that is that we do not waste one precious moment of it. Time is on our side only if—I quote Rudyard Kipling— If we can fill each unforgiving minute With sixty seconds worth of distance run

7.33 p.m.

Mr. Benson

Like the rest of the House I have thoroughly enjoyed the speech of the right hon. Member for Sparkbrook (Mr. Amery). I think it is the only speech of his where I have not disagreed with almost every word he has said. I have been largely in agreement with what he has said on this occasion. It is the one speech that we have had to-day, except the speech of my hon. Friend the Member for Seaham (Mr. Shinwell), that was not substantially concerned with merely getting rid of the hindrances and limitations imposed by the Government. The speeches of the Mover and Seconder of the Amendment were very largely confined to complaints about Government control. It is essential that the present method of Government control should be very largely relaxed and made more elastic, but it is not merely that that the House must consider. We have to demand not merely the return as nearly as possible to pre-war conditions, we have to face the realisation that an enormous expansion of our pre-war export trade is essential. We are not going to accomplish that merely by reverting to pre-war conditions.

The Seconder of the Amendment suggested that the bulk of our export trade was built up of small exports. I think he said that it was built up on thousands upon thousands of small export orders of from £100 to £500. We are not going to carry on our export trade in that way under war conditions. We have to visualise something far larger. Suppose we did get rid of the various Government controls, we should still be faced with various other factors, such as currency depreciation, the black-out, high prices and uncertain prices. We should still have these to contend with. I would point out that even before the war, without any of the difficulties that the war must necessarily mean for the export trade, we had 1,500,000 people unemployed. Without war difficulties, with- out Government control, without the U-boat menace, we had 1,500,000 people unemployed, whereas our opponent, Germany, for the past two years has been clamouring for labour. It has absorbed and organised every available labour resource in that country, and if we are to win the war we shall have to do the same thing. It is no use saying that we should try to get back to pre-war conditions. Pre-war conditions are not good enough. We want war conditions, but not war conditions which hamper, control and prevent export.

The right hon. Member for Sparkbrook, among a number of other constructive suggestions, said that we should use export credits, drawbacks and differential rates of exchange to a far greater extent than we have done. These things facilitate our exports. They are very important, but I am not sure that they go far enough. I am not sure that we can maintain our present highly individualistic system of exports and still achieve the amount and volume of exports that are necessary. The hon. Member for Seaham suggested, with a good deal of approval from the right hon. Member for Sparkbrook, the formation of exporting companies. That, undoubtedly, is an important and necessary step in the right direction, but I doubt very much even if that goes far enough. I do not think that we are going to tackle this problem effectively until the Government take over a very considerable portion of our exports. They have already become the main importation of the country. A wonderful opportunity is here afforded. The Government go to foreign countries and say, "We will buy the whole of your exports of this particular commodity." I do not know how they are proposing to pay for these various things. I do not know whether or not they are proposing to pay with free sterling. They should arrange to pay by the export of specific goods. They are losing a magnificent opportunity in bargaining power if they pay in free sterling and not in goods produced in this country. Orders ought to be based upon bulk barter. Germany has been utilising that system for years, and very successfully from her own point of view, but I am not sure that Germany's almost compulsory customers have welcomed it. Germany has been in the habit of paying with rather doubtful commodities. I have heard it said, on the worst authority, that she tries to pay with aspirins and mouth organs. We ought to utilise fully our powers for bulk bargaining, and if we pay honestly we can beat Germany off the field. What the Government should do when they enter into bulk barter with a foreign country is to arrange to pay not in free sterling—possibly a certain amount of free sterling is necessary—but to pay for imports into this country with definite goods from this country, and definite varieties of goods.

They should go still further. They should utilise all these special opportunities for the co-ordination of production in this country. Why should not they go to a foreign country and say, "We want this from you. What do you want in exchange from us?" and attempt to arrange that our exports in payment shall be as large as possible of standardised goods. If, for example, they could make arrangements with foreign countries to take so many million yards of cotton goods they could then go to the industry and give firm orders in large quantities, and reap the advantages of mass production. At the present moment our exports are made up of thousands upon thousands of small orders—

Mr. Holdsworth

I have listened carefully to the theories of the hon. Member, but will he tell me how the textile trade of this country can have any bulk sales? There are thousands of designs.

Mr. Benson

The textile industry was not built up upon thousands of designs but because we exported hundreds of millions of yards of grey cloth. That trade has now gone to Japan because she has adopted mass production. There is no reason why mass production should not be applied to the cotton trade. The President of the Board of Trade referred to the motor car industry as a highly individualistic industry which war conditions had compelled to come together in the hope that they might maintain some of their export. If we are to rely upon individualistic industries coming together at some time or another we are going to waste much valuable time. We cannot wait for industries to give up their individualism; we shall have to impose co-ordination and organisation from above. That is how we have provided the Armed Forces with their munitions. How are we getting our supply of aeroplanes? How have we enormously expanded our efforts? Has it been by allowing individual production to continue or by co-ordination and organisation? We have increased our aeroplane production simply because the industry has been coordinated.

It has been said many times in the Debate that exports are just as important as munitions. If we have had to adopt co-ordination and mass production in regard to munitions we shall have to adopt it in regard to exports. It is no use trying to fight a highly organised country like Germany, which is using all her man-power and conscripting her woman-power, with an industrial system which without any of the difficulties of war had 1,500,000 unemployed. We can learn a lot from Germany, and if we are not prepared to learn from Germany we are going to lose the war. We have to learn wherever we can. We must be prepared to accept unorthodox methods—war is no respecter of vested interests; and if we are going to allow small groups to stand in the way of co-ordinating industry we shall hamper ourselves in the prosecution of the war. Let us realise that exports are our fourth arm and apply a system of coordination to them as has already been applied to the fighting Services.

7.45 p.m.

Mr. Holdsworth

Every hon. Member has begun his speech by paying a tribute to the hon. Member for Cardigan (Mr. O. Evans), and I should like to join in the congratulations to the hon. Member on the speech he made. I look upon these Debates not as an opportunity of scoring debating points but as opportunities for hon. Members to bring to the notice of Ministers the actual difficulties which their constituents are experiencing. Had it not been for the fact that this is war-time I should have been delighted to take up the subject which the hon. Member for Chesterfield (Mr. Benson) brought forward. I agree with the right hon. Member for Sparkbrook (Mr. Amery) that you must have an open mind. The suggestion the hon. Member put forward is that you should have bulk production, but, on the other hand, it is not a fact that the individual manufacturer or exporter is hindering the export trade of the country. I hope the Secretary for Overseas Trade will persuade the President of the Board of Trade to read in the OFFICIAL REPORT to-morrow morning the speech of the right hon. Member for Sparkbrook. It was one of the finest speeches I have heard in this House for a long time.

I think we were all disappointed with the speech of the President of the Board of Trade. If I may say so, very kindly, it is not a question of answering the points made and then saying that he did not want the House to think he was complacent about it all, because the impression lie gave to the House was that he was complacent. None of us is complaining that there is not enough machinery and not enough Government committees. What we are complaining about, as the right hon. Member for Sparkbrook said, was that a committee which has resolved to do something should get on with the doing of it, and that when machinery has been put into motion there should be some result. The whole country is co-ordinated, controlled and committeed to-day. There is no shortage of committees, co-ordinators or controllers.

One thing which has astonished me in the Debate is that it should have been necessary to say that there should be a desire to export and do trade to-day. A statement like that to anyone connected with industry must be really astounding. Men are coming to me week after week showing me orders for thousands of pieces of worsted textile goods which they are having to decline because they cannot get the raw material. I was astonished to hear the President of the Board of Trade suggest that one of the difficulties he is having to face is the lack of co-operation among the exporters of this country. What these exporters want is the cooperation of the Government to assist them in fulfilling the orders which have been offered to them.

There is one thing which has not been mentioned so far. Speaking from the woollen and worsted textile point of view, during the last war we had to say to people that they would have to wait four or five years for their goods. The consequence was that after the war most of the countries which had previously bought textiles from us said that they would not be in such a position again, and proceeded to set up their own factories. At the present time, we have an opportunity not only to retain the export markets we have, but to get back some of those which we lost from the end of the last war onwards. We have that opportunity now. Germany's exports are stopped directly and indirectly through neutral countries. The rates of exchange are all to our advantage from the point of view of our export trade. Not only have we to think about retaining our normal trade, but we must try to build up something that will give us a tremendous advantage after the war. If we are wise we shall do everything in our power to take the opportunity that we now have.

I should like now to refer to one or two points of detail. I interrupted my right hon. Friend the President of the Board of Trade to ask whether the right hon. Gentleman who is mainly connected with licensing for the export trade has direct access to the controllers. I should like here to pay a sincere tribute to the right hon. Gentleman the Secretary to the Overseas Trade Department. On every occasion when I have approached him on industrial and commercial matters, I have always found him most helpful. One thing which I like about him, if I may be so personal, is that he is not always telling an industry what its business is; he always asks an industry what are its difficulties and what he can do to help; he is willing to listen rather than to tell. It would rejoice my heart if I thought that the right hon. Gentleman had direct access to the controllers, instead of having to go to the President of the Board of Trade and say, "Do you think we could have an interview with the Minister of Supply?" and then for somebody else to go to the Minister of Supply, and for the Minister of Supply to say, "I will send a note to the Wool Controller," for instance, and eventually, when the matter has gone through four or five channels, the reason for the interview has gone because of the long delay there has been. It is not a question of there being a shortage of machinery, but, as the right hon. Member for Spark-brook said, there is need for somebody who can make a decision. The difference between a business man and a Government is that when a business man comes to a decision, action immediately follows, whereas with a Government one has to go through all the channels, from one man to another, and from one Department to another. Only last night, for instance, I received from the War Office a reply to a letter addressed to it on 3rd October. We cannot win the war if there are delays of two or three months in giving answers to letters. There is any amount of that sort of thing to be cut out; let us get some action.

Is there any real co-operation between the President of the Board of Trade, the Secretary to the Overseas Trade Department, and the Minister of Economic Warfare? Very often all of them enter into one transaction. I know of one case where permission was given for the export of goods and the goods had even got to the port, and then the Minister of Economic Warfare said, "No." I think it is that sort of thing which the right hon. Member for Sparkbrook had in mind when he said that there is need for somebody who can take a decision affecting the whole of those Departments. On Monday last, I had lunch with two of the biggest manufacturers in Bradford. One of them had had to turn down an order for 3,000 pieces of worsted goods because he could not get the supply of yarn to make them, and the other had had to turn down an order for 2,000 pieces for the same reason; 5,000 pieces of worsted textile goods had to be declined because the manufacturers could not get the yarn to make them. The President of the Board of Trade appealed to us not to say things which give the impression to buyers abroad that we do not want their orders. Let me tell my right hon. Friend that they have got that impression without our saying anything; they have got the impression because we have had simply to turn down orders. To give one illustration, Canada is turning to the United States to fill its orders.

Sometimes I am amused by questions that are asked in the House about the supply of Army clothing. Listening to those questions, one would imagine that all the wool brought from Australia, South Africa and New Zealand and all the home wool, is made into khaki. There are many technical things I do not understand, but I know something about wool. The yarns needed to fill the orders for the 5,000 pieces to which I have referred were not yarns made from wool which could be used for military and Service purposes. There is no one in the textile trade who would desire for one moment to export any raw materials, semi-manufactured or manufactured goods that are essential for Service requirements. What the textile manufacturers and exporters cannot understand is why they should be refused raw materials which are of no service from the point of view of Army, Naval or Air Force requirements. About a fortnight ago I sent a letter to the Department of Overseas Trade giving the case of a man whom I know very well personally and for whom I have tremendous admiration, a man who, in spite of all the difficulties that have been experienced in the export trade, has been able for the last 10 years to do a trade 80 per cent. of which was in the export market. He had contracts for yarn put down even before the war broke out. His requirements to the end of February were 250,000 weight of yarn, and when he received a reply from the wool controller, he found that his ration was 80,000 weight. It is absolutely impossible for him to fill his orders. He is not the type of man referred to by the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) as preferring to take the easy way. There are thousands of men in this country to whom we ought to pay a tremendous tribute because of their persistence in carrying on the export trade. Instead of placing impediments in their way, we should do everything possible to encourage those men to continue with that export trade.

Another suggestion I would make is that specialised knowledge is required on the part of some of the civil servants in the Department if they are to grasp the necessities of some of the trades concerned in these matters. It is no use saying to an applicant, "We cannot give you a licence this month, but we will give you one next month." A whole season's trade may be lost by that delay. People require new clothes in the spring, but it is no use saying to the trade, "Wait until the spring and we will attend to your needs." The time to prepare for the spring trade is now. All the processing has to be gone through and all the deliveries have to be made. I sometimes think that it is forgotten that, in certain trades, if you miss the particular time at which the goods are wanted, you miss the whole of a year's trading. I realise that the right hon. Gentleman knows of these difficulties, but I suggest that if something is not done immediately to release the necessary raw materials for the production of spring goods, we shall lose next year's trade.

There is another point which I was glad to hear stressed this afternoon. I believe that after Service requirements the next in order of priority ought to be the export trade. Most people in this country can do without a new suit or a new dress for three months. I speak about a trade which I understand, and I think it is far more essential for the building-up of markets, for the getting of foreign exchanges and for the prevention of undue rises in the cost of our own articles, to give priority to the export trade. I would also ask whether it is proposed to make any order of priority as regards distinguishing between raw materials, semi-manufactured goods and fully-manufactured goods. This has a vital bearing on the question of employment, because the more processing we do, the more employment will be given and the more exchange we shall get when we export the fully-manufactured articles. I would ask the President of the Board of Trade to bring these considerations before the Minister for Overseas Trade. The right hon. Gentleman understands the position which he is dealing with day in and day out. I would like to see all these middle people cut out, so that he could deal directly with this whole business from the raw material to the finished article.

To my mind, this Debate will do a tremendous amount of good. I sometimes wonder whether we fully realise the importance of our export trade, and I hope that this Debate will result in greater attention being given to it. If I have spoken strongly, I hope that what I have said has not sounded like criticism for the sake of criticising. I think we should all contribute our views frankly on these matters and let the Government know what we think. For goodness sake, do not let us have any of that easy complacency which would, I am certain, prove fatal to our conduct of the war.

8.5 p.m.

Mr. de Rothschild

I feel certain that my hon. Friends who put down this Amendment to the Address, and those who support it, are gratified by the way in which the House has taken hold of the question, and the interest which has been shown in the present position of our export trade. The Amendment has enabled the right hon. Gentleman the President of the Board of Trade to give the House his views on this subject and, no doubt, one reason why the Amendment was framed in the terms which appear on the Paper was to give the right hon. Gentleman that chance. The right hon. Gentleman stated that it was the first chance of the kind he had been given; also that news which had appeared in the papers about the state of our export trade was, in many cases, much exaggerated, and that the situation was better than it had been. He expressed regret that he had not been able to make a comprehensive statement earlier, but it is curious to remember that there is such a body as the Ministry of Information. I should have thought it might have been commissioned by the Board of Trade to explain to the public at large the course of our export trade during the last three months. The right hon. Gentleman rather reminded me of one of those little india-rubber dolls which make a noise when pressed. Apparently, he requires the Liberal party to press him, in order that we may get from him his opinions upon this matter.

The right hon. Gentleman's speech has been criticised from various parts of the House. It is true that he did not deal with the situation in general as we expected him to do. He did not tell us what steps he proposed to take to make good the present deficit in our export trade and increase our exports still further, nor did he explain what steps the Board of Trade and other Ministries intended to adopt, in order to take advanage of the opportunities afforded to us by the fall in German exports and our own command of the seas. We have heard to-night, from several speakers, that in time of peace we must export to live and in time of war we must export to fight. That truth was demonstrated up to the hilt in the Last war. There is a comparison between the position of to-day and that in 1914–18 which has not been introduced in this Debate up to the present. How did we pay for our imports then? I quote an estimate published recently, based upon Board of Trade figures. In the four years 1914–18 we had visible exports of £2,000,000,000 and invisible exports of £1,000,000,000, while the export of securities was £1,000,000,000 and the export of gold only £40,000,000. That is to say, three-quarters of our foreign exchange was obtained from exports. We are told that it is unwise to compare the position now with the position in the war of 25 years ago, and that this war is being fought on a far larger scale. That is true, but, in principle, we can compare the methods by which we paid for the previous war with those of to-day.

What steps do the Government propose to take now in order to pay for our imports? It is true that they have requisitioned our foreign securities, and this of course was essential, but I venture to suggest that it is far from being enough, for, as has been shown, foreign securities only paid for a quarter of our imports in the last war and our present foreign holdings are less in value than those of that period, though possibly about the same in amount. Devaluation, drops in currency and the shattering events of 1929 and 1931, have shaken the markets of the world. This time the balance is made up by our very large reserves of gold, and, taking gold and foreign exchange together, our position to-day is about the same as it was in 1914. But our expenditure, as I said at the beginning, will be very much greater, and in the event of a prolonged war we shall no doubt spend much more than the £7,000,000,000 which we spent in the last war. Therefore, even if we sold our foreign securities to-day to pay for our imports, we should still have to obtain the greater part of our foreign exchange by other means. I hope the Government and the Treasury will take every step not to sell our foreign securities too soon, because the time may well come when we shall need them urgently. Enemy action may well interfere with our own productive capacity for a few months or for a few days, and once we have sold our foreign assets, we have lost not only our capital but also the interest which they are bearing at the present time.

Germany, we know, has prepared for a war certainly of a duration of three years, which is the same period that our own Government think the war may well last, and we know that she has laid up huge stocks of goods against her needs. The early lull in hostilities enables her now to husband these resources, and as the right hon. Member for Sparkbrook (Mr. Amery) said, it is possible that in that respect time is not only on our side. Therefore, it is doubly important that we also should husband our resources, and foreign exchange is for us a very important resource. I remember the earlier attacks that were made in many of the papers against those who were holding foreign securities and investing their money abroad. Perhaps to-day those writers feel some qualms in regard to what they wrote in those days, because obviously the foreign exchange currency which is held by this country abroad is going to be of very great use; but however important it may be, because of its size, it is obvious that we must rely more and more upon our export trade.

We all know that the first call, in a time of war, on our industry is the needs of the armed Forces, and in planning our war economy, these needs must obviously have first consideration. I submit that the most abundant provision must be made for them and that they must be lavishly supplied with men and materials. But when this primary claim has been thoroughly met, when they have that adequate provision of both man-power and materials, then I submit—and in this I support the hon. Member for South Bradford (Mr. Holdsworth)—that the residue should be allocated in accordance with a plan, and that the second claim on our resources should be that of the export trade, leaving the third place for home needs, based undoubtedly upon a rationed consumption. The nation is certainly ready to accept the sacrifices which this entails and is willing to put up with commodities of less than the highest standard, of a lesser quality, and in smaller quantities. It may well be that, as was pointed out last night, the people of this country will wash themselves just as well with soap containing less fat, and in the same way there is no reason why the quantity of clothes which are worn at present should not be cut down to the strictest minimum and why there should not be rationing, not only of food, but of other requirements as well.

The right hon. Gentleman the President of the Board of Trade discussed the only commodity where there is a planned production which is exclusively for export, and that is the North of Ireland linen industry. Surely, if it can be done in that case, there is no reason why it should not be done in others also. The right hon. Gentleman explained that the materials of the export trade were mostly manufactured in large mills, and that those at the present time are mainly devoted to the production of armaments. But there is a number of small factories and workshops which would be eager to undertake such work, factories which have applied to the Ministry of Supply over and over again for contracts, although without success. The Press has frequently called attention to these, and only the other day Lord Addison, in another place, called attention to them also. Under a well-thought-out plan of war economy, I submit that those concerns would be producing for export goods not essential for our own war needs, but goods essential to enable us to pay for our imports.

What is the reason that we have not yet got a fully-planned, war-time industrial economy in which the needs of the export market are properly met? Who is responsible for the formulation and carrying out of the policy? Is it the two right hon. Gentlemen in whose able hands has been placed the duty of discussing this matter on this occasion? Is it the right hon. Gentlemen who are speaking for the Government to-day? We all appreciate the capacity, the industry, and the intelligence of these right hon. Gentlemen, but we know that neither of them is a Member of the War Cabinet, and how can they deal with our export trade in anything but a minor way? How can they put the point of view of the export trader and the business man when, in the War Cabinet, the three Services are represented but they are not? What, after all, do the three Services want? They want the supplies put at their disposal. They do not care how it is done, where the money comes from, or where the materials come from. They must have them. But it is in a very large measure the office over which the right lion Gentleman presides which is instrumental in providing them with their supplies, and it is a matter of great regret that that office is not represented on the Supreme Council of the nation.

Most of us have read the interesting article which was the first of the articles published this month in the "Contem- porary Review." This article, as the right hon. Gentleman well knows, was written by a very distinguished Member of this House who has since joined the Ministerial ranks. The article is dated 9th November, and on 14th November the hon. Gentleman became a Member of the Government. The article itself was published only on 1st December, so I can take it that the views which were expressed in that article are still the views of a Minister of the Crown. What does he state in that article, which, as a whole, is no more critical than the speeches we have heard to-day of some of the conduct of the economic warfare that is being carried on at the present time? He stated that at the present time there are 16 Departments concerned with this business. The President of the Board of Trade said that these Departments all work harmoniously, that they were all interlocked, and that they all made for the good conduct of the economic business of the Government. That does not appear to be the view of the hon. Gentleman who penned this article. He asked, "Who controls these 16 Departments? Does anybody co-ordinate their policy?" No doubt there are contacts between these Departments. There is sitting above them a rhadamanthine committee of high officials to which Lord Stamp gives some of his time. This committee then reports to a Committee of the Cabinet which is under the Chancellor of the Exchequer. But the Chancellor has a Department of his own to look after. Let us remember that his Department is the one which is always restrictive in its actions, and the right hon. Gentleman in this connection cannot be called a go-getter. It is a go-getter we want to get our export trade back to pay for our imports.

I ask again, is anybody at all ultimately responsible for our export policy as a whole and for co-ordinating it with other aspects of war-time industry? I hope that the Prime Minister will realise the gravity of our trade position. To-day at Question time he was definitely noncommittal. He showed that he looked at this situation with an open mind, but I hope he will come to the conclusion that it is essential to create an organisation which will centralise all these fissiparous efforts; an organisation which will have the task of controlling production for export and of finding markets for our goods; an organisation which must be free to avail itself of all possible methods of increasing the export trade and the different methods which were developed by the right hon. Gentleman the Member for Sparkbrook, methods of barter, drawbacks, extended credits and such like. An organisation like this must, and no doubt will, be able to attack these problems with the speed and the decision which we lack at the present time. The same speed and precision which are shown daily by Germany are needed in our export trade, whether the problems be those of broad policy, or problems connected only with individual transactions. This organisation will have to consider the problems of export to Europe, as the right hon. Gentleman said, and it will also have to consider the problems of export to the New World.

It is essential that we should outbid Germany in the neutral markets of Europe and keep the good will of neutrals by supplying them with goods now unobtainable from Germany owing to the blockade. Only the other day I was told of the following case. A man in an important capital of a neutral State went into a shop to buy an electric lamp. He found the shop stocked with lamps and bought one. As he went out he looked at it and saw it was German. He went back into the shop and said, "Have you not an English or a French lamp?" The man shrugged his shoulders, and said, "I did have English and French lamps, but I am sorry to say I have run out of them. It is quite impossible for me to get these now, so I telephoned to Dresden and got this supply in 24 hours." That is the manner in which Germany is able to provide those who deal with her exports. I do not want to press the Government again on the question of price, but I hope they will modify a regulation which has been alluded to here, and was alluded to in another place by Lord Rea, namely, the regulation which says that prices quoted are subject to their being adjusted to the prices ruling on the date of delivery. Nothing can make matters more difficult for traders, both buyers and sellers, than a regulation of that kind.

We cannot rely on the permanency of the European markets. Our trade with them is probably diplomatic and poliťical more than commercial. Moreover, the theatre of war may at any time be ex- tended, and it is therefore urgent that we should extend our markets into the New World. There we have willing buyers anxious to trade with us. Do not let us be deceived. Throughout Central and South America, Germany in the last few years has made giant strides, and it is for us ťo capture this trade if we can. We must organise to do it. The President of the Board of Trade pointed out that we should get our exporť trade mostly through the accustomed channels. I wonder whether that is true in this case. We want to capture the markets which the Germans had. They may not be the ordinary, accustomed channels, and we may have ťo try new devices in order to capture them.

I do not want to compare at length our exports with those of Germany throughout the sub-Continent of America, but I will ťake one instance of the trade figures for Brazil last year. Brazil is a gigantic country with which we have no trade agreement. Therefore, we were trading on equal terms with Germany. What do we find as regards coal, our principal export, as the President of the Board of Trade ťold us? German exports to Brazil amounted to 700,000 metric tons, whereas ours were only 600,000. In iron and steel, which may, of course, be a difficulty at the present time, Germany had 45 per cent. of the toťal imports into Brazil and the United Kingdom only 7½ per cent. Our bicycles are famous, or should be famous, throughout the world, but Germany's exports to Brazil were over 80 per cent. of the total, and British exports only 7 per cent. German exports of cement were 73 per cent. and ours 19 per cent. In tinplate Germany exported 26 per cent. and this country only 16 per cent. These figures show that in many of these cases we could double our exports, and in some we could even raise them tenfold.

I have concerned myself only with the present advantages to this country of maintaining our export trade at this time. I need not dwell on the legacy of benefit which will be bequeathed to our industry when peace is restored. When this organisation is set up—and I do hope that it will be set up—I hope that its watchword will be "close co-operation," not only with those responsible for our war strategy on land, at sea and in the air, but also—and this is very im- portant—the closest collaboration with our ally France. France and this country have agreed to pool their resources to purchase. The enormous scale of those purchases does give us great power in bargaining with the other side. It gives us power in many cases to lay down the conditions of payment. By a joint policy of sales we can take the maximum advantage of this position, and we can also take the question of imports into consideration. France produces many commodities which are non-essential for war, such as silk and wine, and could thus very well collaborate with us in a joinť scheme for the export of non-essentials such as I have touched upon previously.

We and our ally in this war are even more inter-dependent upon each other than we were in the last war. American credits are now barred to us. In the last war this country borrowed £1,350,000,000 from the United States, and although we lent more than that to our ally France it was, of course, used for purchases abroad. Vie must to-day compensate for the lack of united States credit by greater effort in the economic sphere, and it is, therefore, I suggest for the benefit of, both countries to collaborate as closely as possible in economic and commercial policy as well as in military strategy. Let us build up a complete economic strategy as well as a war strategy, so that the various aspects of our war efforts are interlaced, integrated and unified.

8.32 p.m.

Sir Granville Gibson

Quite a number of hon. Members have responded to the invitation of the President of the Board of Trade, in which he said that he would welcome suggestions for the improvement of oar export trade. There have been two or three outstanding features in this Debate. The first, upon which I will not spend more than a minute, was the view expressed as to the vital necessity of obtaining as much foreign exchange as we possibly can, that being the reason for the Amendment in the name of the Liberal party. The other two main points have been the work of the various controls and Departments of the Government and the issue of licences. No doubt at the beginning of the war there was considerable congestion in the issuing of licences, but I am pleased to record, as President of the Association of British Chambers of Commerce, that in the main there is satisfaction with the position today. Still, there is no disguising the fact that the system is not perfect. I was rather interested in the remarks of the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood), who expressed very forcibly the opinion that there should be no system of licences at all. Personally, I think he is mistaken in that view, because if we did not have a system of licensing there would inevitably be some leakages of goods to Germany. In the debates of the chambers of commerce we hear of how the system of licences does not always operate successfully. Only yesterday I heard that a shipment of wooden blocks for the floor of a hospital in Glasgow, the order for which was placed before the war, had been delivered only a few days ago.

Mr. Stanley

An import licence case.

Sir G. Gibson

Fortunately the licence has been granted, but the blocks were held up for several weeks, although the order had been placed before the war. On the question of controls, I am of the opinion that it is desirable and necessary that there should be control in various industries during war time. In my own industry the control works very well indeed, and we have no complaints, but in that case, apart from the work of the controller himself, most of the work is done by members of the industry. On the other hand, I hear complaints from all over the country respecting the Wool Control, and cases have been cited this evening by the hon. Member for South Bradford (Mr. Holdsworth). I understand that the Government have purchased the whole of the wool clip in New Zealand and Australia and, I believe, South Africa. Before the war a fairly large percentage of those clips was purchased each year by Germany, and it naturally follows that the quantities which went to Germany will now be coming to this country. Therefore, there is available more wool in this country than in pre-war days.

Mr. Stanley

I think there is a slight gap in the hon. Member's argument. He talked about the purchase of these clips in South Africa, in Australia, in New Zealand, and went on to say that there must be more wool in this country than there has ever been before. Is there not a long sea journey?

Sir G. Gibson

Perhaps there is a little gap, which I will fill in. In pre-war days Germany was a large importer of wool of these three Dominions. Germany is out of that market to-day, and the wool which in pre-war days went to Germany is now coming to this country, with the result that we have to-day more wool in this country than we should have had if there had not been a war.

Mr. Stanley

This is really rather an important point. The hon. Member is saying wool is coming to this country and therefore we have more wool in the country than ever before. That wool is not available, even though we have bought it, till it has arrived.

Sir G. Gibson

I quite realise that the whole quantity of the clip for the season has not arrived, but the wool destined for Germany has been coming here for two or three months, that is, wool which, but for the war, would have gone to Germany, and therefore the quantities coming now must be greater than in pre-war days. What happens? There are the requirements of the various Government Departments to be met, and then there is a surplus to meet civil requirements. One of my hon. Friends who is an important woollen manufacturer north of the Tweed was telling me yesterday that he wrote to the controller on 4th November to inquire whether he could have a certain amount of wool to fill an order for New York, and that he is still awaiting a reply. The President of the Board of Trade said—I hope he will correct me if I misunderstood him—that we should first look after the interests of the domestic consumer, and, secondly, foreign trade.

Mr. Stanley

I must correct the hon. Member. I said exactly the opposite. What I said was that we must all agree that after we have provided for the bare necessities of the domestic consumer the export trade must have priority.

Sir G. Gibson

I am very glad to have that point made clear, because apparently I misunderstood the right hon. Gentleman. His point of view entirely coincides with my own. We might even go so far as to say that we should tighten our own belts rather than the belts of our customers overseas and do all we possibly can in order to foster export trade, in which personally I am very much interested, because my own firm exports nearly 40 per cent. of its production to various markets, and since the war the export per week has been greater than before the war. Therefore, I have no complaints against the licensing department, although I had in the early days of the war. Unfortunately there are many woollen textile manufacturers in this country who have been complaining, one after the other. I have not heard a good word said of the Wool Control yet from any source. In one case a man who was 80 per cent. engaged on Government work was allotted 10 per cent. of the remainder, making a total of 90, for civilian purposes. When he complained to the controller he was told: "You are luckier than some people because those in civilian trade only have had 50 per cent. allotted." It seems to me almost as vitally important that the supplies should be available, if they are in the country, for the export trade, as for the Government Departments.

In view of the fact that these controllers are spread all over the country there has undoubtedly been a lack of co-ordination among the various Departments. I was very interested to hear the President of the Board of Trade refer to the committee that has been set up for co-ordination in trade and industry. An opinion has been expressed to-day that there should be somebody at the top, shall I say along the lines of the Minister for the Co-ordination of Defence, to be a Minister for the Co-ordination of Industry, as was mentioned by the hon. Member for Seaham (Mr. Shinwell). The point of view is that there is an absence of a higher authority to guide the Departments and the controllers. The War Cabinet has been formed to prosecute the war; it seems to me that we want something similar with regard to trade during the war. Trade cannot be carried on any longer under the old ordinary rules.

This matter has been engaging the attention of the Association of Chambers of Commerce recently, because we have felt that there was a lack of driving force at the head to have the final say in the control of the articles to be allotted for the foreign trade. The case was put to the Minister himself to-day of a firm in London who desired to export a very large quantity of machinery. They could not even get the wood to make the packing cases. That has been put right. I have heard of a similar case in Manchester. If there had been some power at the head co-ordinating the efforts of all the controllers, I am satisfied that such things could hardly have arisen. Only yesterday there was sent to the Prime Minister—I hope he has received it by now—a resolution which was passed by the Council of the Associated British Chambers of Commerce. I saw a reference to it in the newspapers this morning. It reads as follows: In view of the vital necessity for maintaining and extending our overseas trade during the war and bearing in mind the need for obtaining foreign exchange, the Executive Council of the Association of British Chambers of Commerce urges the Prime Minister to constitute a co-ordinating committee consisting of the Ministers of the appropriate Government Departments to evolve and carry out a trade policy to meet the conditions brought about by the war. This committee should be presided over by a Minister for the Co-ordination of Trade specially appointed for the purpose, and with a seat in the War Cabinet. The Executive Council further urges that this co-ordinating committee should be assisted by an advisory committee on the lines of the Prime Minister's Industrial Panel, to be specially set up for this purpose composed of persons experienced in trade and industry. Last week I put a question to the Chancellor of the Exchequer asking whether he was prepared to set up such a committee. His reply was roughly that there was such a committee in connection with overseas trade, but I see that the Controller-General of the Overseas Department of the Board of Trade has disappeared from there and has gone to the Ministry of Food. The Department which I believe is one of the most important in the country to-day in getting for us our foreign exchange is thus shorn of its leading permanent official. I hope that something will be done along the lines I have indicated, of a man at the top in control of all the controllers, each of whom after all, is interested in his own sphere. Take for instance, the controller of timber. He simply looks after the people who customarily buy timber. The man who wants a few packing cases does, not interest him at all, but if we had a man at the head, as I have indicated, he would realise the vital importance of £100 worth of timber being supplied when it meant the sending out of thousands of pounds worth of machinery.

I heard of a 30,000 kilowatt turbine which was ordered for Johannesburg, but was not allowed to go and was kept in this country. The machine would be worth in the aggregate £200,000 or £300,000. Perhaps the Ministry of Supply thought it was more desirable to have that machine in this country. It seems just as desirable that we should have that amount of exchange from South Africa. No doubt we should have carried on by substituting something in its place. I hope that the Government will take note of the expressions of opinion today, which have been voiced time after time, asking that over these controls there should be an overriding power with authority to act. I hope also that the President of the Board of Trade will take these expressions of opinion to heart.

8.47 P.m.

Mr. J. Morgan

First of all may I refer to one or two items which have been dealt with in detail and on which I should like to have a little more information before leading up to my main reason for intervening in this Debate? I take it that when the President of the Board of Trade was referring to the satisfactory account that he has been able to give us of the Trade Returns for November the figure includes, to some extent, a batch of deferred shipments, so to speak, due to the initial dislocation and the faulty control, which he rather regretted during his speech. We might not see anything like the same rise again, because we cannot expect it in the months to come. This particular month will have reaped the advantage of clearing up the arrears and of the way in which shipments have regularised themselves in between. I put this point in because I feel that we should not take an unduly optimistic view of the prospects of the export trade from the one statement made in that way.

If there has been criticism of the general method of controlling foreign trade, including the import licences, I hope people will also keep in mind the fact that when import licences are issued they have a restrictive effect, based sometimes on shipping space and sometimes upon a decision only to allow particular types of commodities to come in. That has its effect upon price. It puts a certain scarcity value upon a permitted import. A close note should be taken of the effect upon the sale of the commodity, whether it be a raw material or an article of food such as I have in mind. Spanish grapes are an instance of what has occurred. While it may not have very widespread effects, it indicates in a sharp and distinct way what might arise from the application of import licensing on this restricted basis.

Before I pass to my main point I would recall that when I still had the advantage of being a very young man I served on a British trade mission under the late Lord Kirkley, to South Africa and Rhodesia. I have not lost the impression of those interchanges with the commercial interests in that peculiarly interesting part of the world, but I have gained again tonight the feeling that there will be certain categories of raw materials that will not, in the later stages of war, be used very largely for production of war needs. Their use will tend to become stabilised and yet we may still have full access to the sources of supply. I am thinking of wool and cotton. We shall not blow them away in the same way that we shall iron and steel. Therefore, there should be trade drives, in the interest of the textile industry for instance, not only by Government Department delegations but by commercial men from those particular industries going to countries like South America and South Africa to learn at first hand just how the Germans managed to get their trade or how other countries have held their trade. I remember going to Manchester to explain how it was we lost a certain class of trade in South Africa and the Rhodesias. I was not in the trade at all, but I was struck with the lack of contact that those particular people had in their own line of trade and of the way in which it has developed there in recent years. It has occurred to me that the trade itself should be encouraged in those particular sections where we can feel assured that in the future, when we are looking a year ahead, we shall still have access to supplies and that the Services will not be gobbling them up, as appears at this moment of the expansionist stage.

I am glad to hear from experts the confirmation which one felt must be the case, that actually we must not assume we are going to have such access to credits abroad or that we start with the initial advantage over Germany that we had in 1914. This need to conserve exchange is paramount in the consideration of our domestic economy and in our strategy, in dealing with our foreign trade generally. I am interested mainly in the food aspect of this business and I feel that those who are concerned with the position of exchange and its availability should require a progress report now and again from the Minister of Agriculture in this country. It is largely assumed that, as we are going to plough up a million and a half acres, we shall set up in a reasonably short time an increment of food supply which will ease the external demand made for essential commodities. It is not often realised to what extent the food bill of this country eats into the trade position of the nation. Something like £500,000,000 of foodstuffs has to be bought. I exclude agricultural products such as rubber. That is a greater sum than our total export trade, and the imports balance, rising to the £1,000,000,000 mark, has to be made up by services of one sort or another, which may diminish under war conditions. It must be of value to the exchange position of this country if we could diminish our demands on the food services abroad.

It is assumed that agriculture is making a response. I am satisfied however that over the next 12 months British agriculture will produce less than it did in the last 12 months in regard to foodstuffs. At this moment it is employing fewer men on the land than it did six months ago, and yet there is a stand-by army of men and women which has not been brought into operation. Agriculture itself has got 20,000 or more unemployed labourers beside the 1,500,000 unemployed from which to draw for labour. We shall produce far less wheat this year than last year, in spite of the talk there has been. I am confident that we are losing a large section of our livestock production, possibly because of the import regulations. We are cutting down our pig population, and there will not be a reaction for the next 12 months to the steps we have taken to increase supplies. We have practically wiped out that section of the farming industry. I heard this week that the chairman of the Pigs Board had sold to pig dealers in my constituency in Doncaster 300 pigs at less than 50 lbs. dead weight, evidently clearing out of the pig business.

Mr. Deputy-Speaker (Colonel Clifton Brown)

I must remind the hon. Gentleman that we are discussing export trade and not the agricultural problem of the country. I hope he will relate his remarks to the subject under discussion.

Mr. Morgan

I hope my remarks will be cogent enough when I come to the point I am going to make. If there is an exchange fund which is being strained in any way by the demands from this country for foodstuffs which could be grown here, it must affect the trade position, because so much of our export trade depends not on what we actually produce in raw materials but in industrial raw materials which in no circumstances can be produced, such as rubber, cotton, minerals, copper and so on, which have been referred to. If we could divert from that exchange fund food sales and purchases and release that money for the purchase of industrial raw materials, it would make a definite contribution to our ability to export goods in the further processes.

When we were discussing the mobilisation of our economic resources the opinion was expressed in various quarters of the House that the only way in which we could make up for the lack of credit which we used to secure from the United States in the past must be a closer and a more intense use of our own economic resources. I hope the Government themselves will require a progress report from the agricultural industry in order to assess the capacity of that industry to release for this country some exchange hitherto devoted to the purchase of food abroad. It is a disquieting feature of our economic assessment—"audit" is the word used—that if any person takes a sanguine view of the agricultural development as a means of aiding the economic position of this country, he will find that agriculture will not lend the President of the Board of Trade the aid that it ought to lend in reducing commitments abroad and at the same time enabling him to sanction the purchase of raw materials to aid his exports.

My last point is this: Yesterday I was talking with a personal friend of mine, Mr. Peter Fraser—I had the good fortune to live in New Zealand for a time and I got to know him fairly well—and I learned that the basis on which New Zealand has been able to fix up these purchases by us of the various raw materials and foodstuffs which New Zealand can supply will be the cost of the goods that we sell back to New Zealand for these articles. That gives point to what I want to say here, that the Board of Trade in regulating imports must have regard to the fact that the agricultural industry in this country has raw materials which may be regulated in such a way as to throw up the cost—and I think the rising costs of primary feeding stuffs are making things difficult. I do not say he has done it, but I want him to have regard to the possibility, because the general idea is that we are being restricted in this matter not because the commodities have been sunk but because there has been a re-allocation in the shipment position.

A point was made by the right hon. Gentleman the Member for Sparkbrook (Mr. Amery), that we have to beware of rising costs of living, as a very important factor in the cost of our exported articles. Some of the raw materials of the agricultural industry play an enormous part in the cost of living at this moment. A rise in that direction is going to be reflected in the cost of milk and meat in the new year, and must, in itself, lead to a demand for increased wages and a rise in the cost of producing articles, which will affect the export position. I put in the plea that the President of the Board of Trade should ask for a progress report from agriculture. If the Government are looking to the agricultural industry to pull them through their exchange position in any substantial way, they will find that disappointment will develop unless something is done very soon.

9.1 p.m.

Mr. Boothby

We have had a very interesting Debate, and some very valuable points have been raised. I think the hon. Member for Doncaster (Mr. J. Morgan) has raised a very pertinent point. Everybody, on every side, has tried to be constructive, and not merely destructive. I must confess that I was a little disappointed with the reply of the Prime Minister to the hon. Member for East Wolverhampton (Mr. Mander) at Question Time, when my right hon. Friend gave the impression that he was not going to carry out any serious reorganisation of the machinery of government on the economic side. He added, in reply to a Supplementary Question, that he had been reading a certain number of letters to the Press from people who had no experience of government. That may be true. It is certainly true so far as I am concerned; but I would suggest that the Prime Minister is more responsible for this than I am. However that may be, I have had a certain amount of political experience, and I think I know when this country means business and when it does not. I think I can say that this country is now deter-mined to get a reorganisation of government on the economic side, and a superior economic direction. It is bound to come, and the Prime Minister will have to accede to the demand. It is being made from John o' Groats to Land's End, and right through the business community; and it has nothing to do with political parties or creeds. I am certain that that demand is the expression of a really strong feeling in the country, and will have to be accepted, and ought to be accepted. I quite understand that my right hon. Friend the President of the Board of Trade could not say anything about it to-night, but from some observations in his speech I detected that he was not altogether unsympathetic to the idea of a change in the organisation of the economic machinery of this country. He even went so far as to say that he would warmly welcome and co-operate with it—

Mr. Stanley

I did not say that I would warmly welcome it, but that if the Prime Minister decided to do it I, and I am sure all my colleagues, would loyally co-operate.

Mr. Boothby

We shall see what happens. My right hon. Friend will remember that I suggested that he should go higher himself.

Mr. Stanley

That is why I dislike the suggestion.

Mr. Boothby

I could not help being a little amused by the implied criticism of my right hon. Friend against the "Times" newspaper. Times have changed a lot. The attitude of Ministers about the "Times" was very different around September of last year. Now they can say little in favour of it, while I myself am in favour with the "Times." I think it has done great service in bringing this question before the Government, and giving expression to a real public want.

After the war we all want economic co-operation; we all want free trade over the widest possible areas: we all want political federation, and all the rest of it, over as wide an area as possible. But we have to remember that at the present moment we are actually engaged in a war, and a very desperate war at that; and that the economic aspect of that war is extremely important. We have to export, or we cannot win the war. While the figures given by the President of the Board of Trade about the revival of our exports in the last few weeks are encouraging, they should not imbue us with any undue satisfaction or complacency. We must keep our exports up. We are apt to forget that the Germans have been conducting the most virulent economic war against this country not only for the last three months but for the last three years, and they have been using methods which, according to the economic principles which we have been brought up to believe, are fundamentally unsound. Yet they carry on. I am certain that any idea that Germany at this moment is within measurable distance of economic collapse is not only mistaken but highly dangerous. They are working practically undisturbed at almost maximum capacity; and we must never forget that, in any consideration of the war problem. Their highest potential will not be reached until next year. We have to take into consideration that the blow will fall next year, when their war potential will be at its peak.

In the modern world with which we are concerned the orthodox nineteenth century principles of political economy have been—to use a modern expression—debunked by Germany; and we have to face up to the fact that the only way we can compete with German methods is by using similar methods ourselves in certain circumstances, and not being tied down by any rigid principles. I think I am entitled to say a word on this subject, because I would remind my right hon. Friend the President of the Board of Trade and my right hon. Friend the Secretary for the Department of Overseas Trade, whom I see beside him, that it was as long as 18 months ago, on 17th May, 1938, that I ventured to address a confidential Memorandum to them, in which I said: It is clear that the main objective of German policy at the present time is to secure complete control of the Danubian States, Poland, and the Balkans, by means of economic penetration.…The solution would appear to lie in the provision of an alternative market, for the products of certain European countries which would be available in the event of continuous political blackmail on the part c f Germany. For it is only if the Governments of these countries feel that in the last resort they can fall back on a (limited) British market that they can hope to call the German bluff.…In these circumstances it is for the British Government to decide now whether action should be taken to counter a movement which may well be fraught with the gravest consequences. The spectacular success of German economic penetration has been due to highly unorthodox methods, such as exchange clearing and compensation agreements, which have been managed with the utmost ingenuity. To fight against such weapons by the methods of 'laissez faire' is like fighting tanks with bows and arrows; and so long as the doctrines of 'laissez faire' continue to dominate the Treasury and the Board of Trade technical objections can and no doubt will he raised against any action on our part, which will appear to be unsurmountable. That was a very long time ago. I went on to suggest certain methods by which we might compete with the German economic drive in the Danubian States and the Balkans. I suggested, first, an increase in medium-term credits, under the exports credits scheme. I admit that an Act was passed by this House giving greatly increased powers and resources to the Export Credit Guarantees Department; but in the months that have passed since then adequate advantage has not been taken of that Act. In medium-term credits we have a magnificent weapon for competing with the German methods so far as these particular neutral countries are concerned. I also suggested that we might purchase certain commodities in these countries—oil, wheat, timber, dried fruits, and tobacco—and use them as collateral security against further export credits to these countries; and that there should be export companies specially formed to handle this particular trade with these particular countries. I do not think that we pursued the policy of trade expansion in the months preceding the war with anything like sufficient vigour, and I am sure that, if we had conducted a real drive in the Balkans in the last 12 months preceding the war, we might have obtained a much stronger position in these countries than we have to-day, and the German position and power would have been correspondingly less. It is no use trying to blink that fact.

We have trade missions out there now, which are beginning to work. There is one question that I would like to ask my right hon. Friend the Secretary to the Department of Overseas Trade. What powers have these trade missions? Have they powers actually to enter into commitments and to make actual purchases, or are they simply out there in an exploratory capacity, without any authority to take executive action? The trouble in fighting the Germans is that, whatever they do, they are very efficient. If they send a trade mission to a particular country, you may be sure that it is armed with very extensive powers, and the head of the mission is able to settle a question and to say, "Yes" or "No"; "We will do this" or "We will not." In our case we send advisory missions and exploratory bodies of different kinds, but when they get there they have not sufficient authority to clinch deals, and because they have not that authority the deals are very often lost. I believe that the purchase of goods and of raw materials from these countries and the extension of medium-term credits to our exporters for the export of manufactured goods, and, where the war situation permits of it, of capital goods to these countries, is the best chance that we have of combating Germany successfully in the economic war. I believe it is of absolutely vital importance, and I beg of my right hon. Friend the Secretary to the Department of Overseas Trade, when he comes to reply, to give some indication whether this is to be the policy of His Majesty's Government or not?

In the letter which I wrote to the "Times" the other day I said that traders in this country now have not only to be told what they may sell, but where and how they can sell it. I was taken to task by a hard-bitten individualist for suggesting that any private trader in this country need be told anything by the Government at all; but the fact remains that, under war conditions, you cannot conduct an export trade without, not so much the control, as the advice, guidance and indeed the assistance of the Government. The thing is not possible. Think of what the merchant has to provide to-day in conducting export trade from this country. He has to enter into negotiations with the countries concerned, which are probably very difficult, and may involve a lot of obstacles which have to be sur- mounted. He has to secure the release of the necessary raw materials, to provide against war risks, and pre-delivery risks, and to secure the shipping and the marine insurance. Then he has to get the finance and credits either from the Export Credits Guarantee Department, or from the ordinary banking houses in the City; and, finally, he has to make arrangements about payments, which will usually take the form of progress payments, and the necessary currency exchanges as well. The ordinary manufacturer, who is busy manufacturing articles in this country, has simply not time to go through all this; and naturally he is reluctant to take the risks involved. In all these matters it is, therefore, very necessary that an organisation should be developed, in co-operation wiťh the organisations responsible for merchandising in this country, which will be able to bring immediate effective advice and assistance to manufacturers as far as the export trade is concerned. It is extremely difficulť. So much for the "specialised" exports of this country, to which the President of the Board of Trade referred, and to which he admitted he attached great importance.

He then wenť on to talk about the "great, broad, customary channels of trade" of this country. I would say this to him. To what exactly was he referring when he talked about that matťer, because they are constantly changing. One of the greatest channels of trade that this counťry has ever had is the Chinese channel; and most of us will admit that if sanity ever returns to the world, we shall have to redevelop that Chinese trade. China is still the greaťest potential market in the world. It may not be that we or our children shall ever see it; but for the sake of our great-grandchildren we ought to endeavour to do someťhing, and not lose a chance. I ask the right hon. Gentleman this single question. Whether he is giving any thought or attention ťo this question of maintaining some of our channels of trade with China; and whether he has under consideration the question of giving further credits to China? Do not forget thať China possesses certain things which we want very badly at the present time. She has wolfram, tungsten and anťimony. These are very valuable raw materials from the poinť of view of war; and China wants many things that we may be able to send her. We do not want to pursue art aggressive policy and get into political difficulties in the matter, but I suggesť to my right hon. Friend that in considering what he himself described as the great accustomed channels of trade, he must never leave China out of consideraťion. In the old days it was one of the greatest, and if my right hon. Friend the Secretary to the Overseas Trade Department can say a word about China to assure us that he has got that question in mind, I think the House will be very pleased.

Lastly, I come to the question of machinery of government, which has been at the back of every speech delivered in this House to-day. Can my right hon. Friend deny that there has been, since the outbreak of war, a lack of effective co-ordination and co-operation between the various Departments concerned with economic policy, and between the various committees set up by the Government? Of course there has. The present organisation is a committee of Ministers presided over by the Chancellor of the Exchequer with Lord Stamp as part-time assistant. Does my right hon. Friend really mean to suggest that that is going to be good enough to conduct the fiercest and one of the most desperate wars in which we have ever been engaged? Of course not. The Chancellor of the Exchequer has a whole time job as it is. He has to be a Member of the War Cabinet, and indeed he ought to be a member of any War Cabinet, for he has the task of finding the way to finance this war. He has to consider the formidable issues recently raised by Mr. Keynes. He has the whole question of foreign exchanges on his hands, which must cause him continuous anxiety. He has also to consider how we are to arrange for the purchases of munitions of war and raw materials in the United States of America and in Canada. All these problems bear on him; and it seems to me to be impossible that he should be asked to take on the additional burden of deciding our whole trade and export policy in addition.

I would remind hon. Members that in the last war we actually had two Financial Secretaries to the Treasury, one of whom spent the whole of the last 10 months of that war in the United States of America devoting himself to the question of purchases and the financing of them. This shows that these financial problems are of sufficient magnitude in themselves, without throwing on the shoulders of the men responsible for them the whole burden of co-ordinating our trade and economic policy. I find myself in great sympathy with the plea put forward yesterday by the right hon. Member for South Hackney (Mr. H. Morrison) that we should now set up what ought to have been done a long time ago, a new Board of Trade, not concerned with the control of individual industries and trades in day to day problems and discussions, but concerned with the general supervision of policy over the whole of the economic field. In other words, the policy once again—a very much hackneyed word, but a very necessary one—of co-ordination. Let the Secretary for the' Department of Overseas Trade assume responsibility for what in the opinion of the House he has proved himself well fitted, and turn his Department into a proper Ministry of Overseas Trade, merging with it the Export Credits Guarantee Department, and making himself responsible for a constructive export policy. An arrangement on these lines would be most beneficial. Whether I have had experience of Government or not, I am convinced that this is a form of reorganisation that would not be in the least revolutionary, but which would bring much greater efficiency into the conduct of our economic policy.

Another point that has arisen in the Debate is—what existed until quite recently—the chaos of control. It is better now. The ordinary manufacturer who has come up against these controls has not been able to understand on what principle they have been administered. They seem so arbitrary. One man will get permission, quite unexpectedly, to secure a raw material or to do a piece of business, and he does not know why. Another man will be refused, and he does not know why. Men do not mind being refused if they know the reason why they have been refused; but if they do not know the reason, and cannot see any reason, they are apt to become impatient. A good deal more co-ordination and direction are necessary in the whole of this system of control. I agree with my right hon. Friend the President of the Board of Trade when he suggested that no one could seriously say that the controls should be removed altogether. Of course, they cannot be removed; but what we do suggest and plead for is that they should be adapted to meet new conditions in the light of experience. It is no good denying that those who have been trying to export have been greatly hampered in recent weeks by the arbitrary and apparently irrational way in which the controls have been worked.

We have been granted a further breathing-space before the main struggle comes. What we have to ask ourselves is: Are we making the very best use of it? Are we using every second of every minute to the very best of our ability to meet the blow which may, and almost certainly will, fall upon us next year? An hon. Member opposite said there were certain things that we might well copy from Germany, and that one of them was the speed in which they make decisions. That is profoundly true. We must be able to get round our red tape sufficiently to enable quick decisions to be taken. It is decision and decision that we require all the time. Anybody who has been trying to deal with the Government will tell you that it is the delay in reaching decisions that has been most exasperating to business men. It is decisions we want, and not minutes. We do not simply want these documents going round and round, up to Cambridge and Oxford, and back again, with innumerable "observations" written in the margin on the right side and initialled. You get documents which are black with observations by the time they come back. It seems to be some inevitable mysterious working of fate that, before a decision can be reached, these documents have to pass and repass on His Majesty's Service, all of them written upon and written upon, initialled and initialled. We must do something to hasten up this process, which worked admirably in the piping times of peace, but will not do now.

There is another question which arises, on which I would put a direct question to the President of the Board of Trade. Why were the Germans allowed to acquire control over the Rumanian oil company "Petrol Bloc" the other day? We ought surely to have been there, seeing what we could do in the matter of buying it up, if we could. That is a sort of thing on which we ought to have had our sleuths, active and pouncing, before the Germans could get control. It is the danger of complacency during the pre- sent lull that I dread most at the present time. M. Paul Reynaud said to me when I was in Paris just before the war that if the democracies go down it will be because of one thing only, and that is that they have always been just too late. It was "wait and see" that brought Asquith down, and we must make sure that we are not too late again, and that we do everything in our power to secure that the decisions which ought to be taken over the whole economic front are given rapidly. If we do that, then surely we have the reserves and resources behind us to make victory absolutely certain.

9.25 p.m.

Mr. Woodburn

At this late hour I do not propose to go far into the realm of argument, but there are one or two principles that I should like to lay before the House with a view to their consideration. A great deal has been said about the need for co-ordination and the need for a co-ordinator. That seems to me almost to be a demand for a Hitler or a superman—the very thing that we are trying to destroy. Imagine in the enormous complicated business of this war trying to push the export trade through the brain of a single man. It is like trying to push the whole of the commerce of this country through an old-fashioned hour glass Obviously we want as many channels as possible and as many capable people as possible to be responsible in their own Departments. The principles that must guide us are these: that it is for this Parliament to lay down the policy on which the war is to be fought and on which the conduct of business and industry in the country is to be carried out during the war. The carrying out of that policy must be left to the individual responsibility of people who have executive power, and that cannot be left to one man, or even to half a dozen men. It must be left to men who are capable of dealing in a specialised way with specialised problems.

I have listened with great interest to the Debate, and it appears to me that there is a transition going on in the House of Commons itself. Someone has complained that Government Departments keep things back. I suggest that a great deal of that responsibility lies with the hon. Members who for generations have come to this House, not to get the Government to do things, but to see that the Government never interfere in spheres beyond their proper responsibility. It is also due to generations of civil servants who have been trained never to go beyond a certain point because of the fear that if they do so they will be pulled up immediately. In the course of this war we are now trying to change not only the whole House of Commons but the whole Civil Service, and we are asking men to take initiative who up to now have not dared to do so. We are, therefore, in this House having a revolution. The time has gone when you cart have private enterprise running the country in the midst of war. There has to be control and restriction, and it is a great deal of satisfaction to those of us on these benches who have been advocating planning for many years that to-day the demand is coming from the House of Commons that there must be planning if we are going to win the war and the peace.

There are four ways of paying for this war. The first is by using up the reserves of capital that we have built up for generations, by wearing out our machinery, our railways, our skill and our men The second way is that we must produce the goods during the war. The greater the amount of goods we can produce the less will be the loss of capital and the less will he the burden for the future. We have to exchange some of these goods abroad in order to purchase the necessary vital materials for the war, and the Minister was perfectly right in saying that the first essential must be to purchase the materials which are necessary for running the war. You cannot send millions of men to France and not provide them with the means of carrying out their job. If everything else is to be sacrificed in the process that must be the first essential. We have also to maintain existing standards, and I must offer opposition to the suggestion of the right hon. Member for Sparkbrook (Mr. Amery) that the real wages of the workers of the country ought to be cut down. That is an economy which you cannot afford, because if you destroy the real wages of the workers you automatically destroy the efficiency of the workers upon whom the running of the war depends. Therefore, the last thing you can do is to reduce the efficiency of the workers during war, and we shall certainly oppose any suggestion that the wages of the workers of this country should be reduced on account of what is called economy.

We agree with the President of the Board of Trade that what must be stopped is an unnecessary use of luxuries which use up foreign exchange. May I instance the great number of cameras which come from America and which are obviously a luxury? We are justified in saying that people must not use foreign cameras as long as we require foreign exchange to buy the necessities for our economic life. The last way is buying or borrowing abroad. I was astonished to hear from hon. Members opposite and those who are described as financial experts, that this country has no credit abroad. The Labour party has been accused of destroying the credit of the country, and I was surprised to hear from the Government benches that this country had no credits abroad. I believe this country has enormous credits abroad, and I am sure the right hon. Gentleman will be able to assure us on that point. I should like to be constructive and therefore I will make one or two suggestions. What we can export is obviously the material we have that is not necessary for the war. We cannot export iron and steel goods if iron and steel are necessary for munitions, however much we may regret it. But we can export things which we produce in our own country, and we can also train some of the unemployed workers to produce some of the more specialised products which we can export without danger to ourselves. Cameras are one instance. There are also scientific instruments and many other things which we normally buy from abroad; we can train the unemployed workers to produce them.

Sir Geoffrey Ellis

Does the hon. Member realise that the committee over which I presided was informed that it took from seven to ten years to get any man experienced sufficiently to make these instruments?

Mr. Woodburn

There is no reason why we should not begin early. I can see no reason why there should not be a survey taken of all the highly specialised products which we buy from abroad and then utilise some of the unemployed labour in their production. There are some things—typewriters, for instance—which are made in this country, but of which we also buy great quantities from abroad. There is no reason why, during the war, we should not develop a typewriter industry, which does not require much in the way of metal, but a great deal in the way of labour. If people could be trained for such an industry, even if it were expensive to train them and we lost money in the process, the eventual economy would be of great advantage to us. There are all sorts of electrical instruments which could be made in this country to a far greater extent than at present. I endorse the suggestion that has already been made that we might stimulate exports of woollen goods. We shall be buying a great deal from America, and I am sure the Minister will agree that woollen goods are things which we could export to America by making a bargain with that country to buy them from us. There are also coal, cotton, and ship-building. I suggest that during the war there is a possibility of building ships not only for our own use, but building ships which eventually would be an asset that we could at least exchange to pay off our debts, if not for making purchases.

I should like, in conclusion, to refer to the necessity for thinking of the future. If we build up an export trade which cannot be maintained when the war ends, we shall simply cause further dislocation to our industry, instead of helping it. We should rather stimulate the export of those materials which we ourselves can produce so that when the war is over we shall not have artificially created industries which will cause a dislocation. We must concentrate on producing things which we consume. After the war is ended, there will be a struggle for markets. There has been an intensification of the fight for markets. If, after the war, we are again to start the struggle for markets, for the Chinese market, the Balkan market, and all the markets of the world, we shall simply start over again the process which lands us in war. The war must finish, if we are to have any permanent peace, by some sort of economic planning, not only for this country but for the world. The principles of that economic planning are very few. There must be some arrangement among the nations of the world for changes in the ownership of territory, where necessary, by peaceful means. There must be some arrangement for the sharing of the vital products of the world—wheat, timber, oil and petrol. These things must be distributed according to some principles on which all nations will agree. There must be some arrangement for helping backward nations and ensuring that these backward nations shall obtain loans., There must be some method of obtaining payment from them.

There must also be some machinery for settling these matters internationally, such as an international court of justice, and finally, there must be some authority to enforce these principles. Unless we get some co-ordinating machinery in the world, the want of which in this country has been so much stressed in the Debate, we shall start again the process which leads to further wars. We must organise not only our own country, but develop our industries and our plans with a view not only to bringing this war to an end, but all wars to an end. As far as hon. Members on these benches are concerned, we welcome the planning that has been introduced already, although we deplore the fact that it is not as active as it might be. Certainly, we will support every extension of orderly planning, the co-ordination of our industries, and the planning of our production to meet the needs of our own country and the markets of the world. The choirce to-day is not between a further struggle for markets and the winning of the war. What is before us to-day is a choice between planning not only our own industries but the world as a whole, or going on to chaos and the destruction of all the nations of the world in further wars.

9.40 p.m.

Sir Ralph Glyn

The House ought to be grateful to the Liberal party for having given us the opportunity of discussing this very important subject. The speeches, so far, have all been on more or less the same lines, and I think at the end of the day one can feel certain of the fact that there is a great deal of confusion in the minds of many people in this House and in the country as to the reason for the discontent which is so vocal in different parts of the country to-day, if the President of the Board of Trade is correct in saying that everything is going on fairly well. I do not agree with the last speaker that it is a question of plan- ning and organisation. Frankly, I think that what we are suffering from is over-organisation and over-planning. The country has had more organisation and planning than it has been able to digest. We all know the love which there has been for great secrecy and for control of one thing and another. Perhaps hon. Members have heard the sad story of the distinguished general who was told the other day to go to a certain aerodrome and to get into an aeroplane in which he would be flown to a certain headquarters in France. When he was in the air he opened the envelope containing his secret orders. The pilot also opened his secret orders. These informed the pilot that the general knew where they were going, but the general's instructions were that the pilot knew their destination. The consequence was that they had to turn back in order to find out where they were supposed to go. That is a good example of over-organisation, and of undue secrecy, and of how all this can be overdone.

I am sure the House would welcome an opportunity being given to the Minister for Overseas Trade to continue what he had been doing before the war, that is going around various capitals to find out what is required in those countries and to capture those markets. It cannot be done easily, but, with the information which the right hon. Gentleman already has, and with the fact that there are trade delegations in the Balkans, a great deal can be accomplished. We ought to send to South America one of the strongest trade delegations we have ever sent to any country, with the object of getting back a lot of the trade which has been lost to Germany. While in the Balkans it is possible for the Germans by their communications and their threats to get a great deal from certain countries, if we concentrate on developing our export trade to South America we shall have a fair field. A few days ago I spoke to a well-known Englishman who has been living in Jugo-Slavia. He gave me some information which I think is of particular importance. The Germans there, he said, are endeavouring to get copper, lead and pyrites. This man said that these had been offered to Britain, and that owing to haggling and bargaining we had lost those valuable metals.

We can only win this war by recognising that the Ministry of Economic Warfare is one of the Service Departments, and it ought to be classified as such. I believe the war will be won by economic pressure more than anything else. It is necessary that we should get into our minds a clear picture of the machinery of government as it is being operated to-day. We have to recognise, first, that there are the fighting Departments, the War Office, the Admiralty and the Air Ministry. Then there is the new Department of Home Security, and the Ministry of Economic Warfare. Then there are the Departments such as those dealing with pensions, health, education, food, transport and all the rest of it, which must function. Then there are the oversea Departments, such as the Foreign Office, India Office, Burma Office, Dominions Office and Colonial Office and, finally, there is the trade section which we have been discussing to-day comprising the Board of Trade, the Department of Overseas Trade and the Ministry of Supply—which certainly from now onwards should be responsible not only for military supplies, but for supplies to the Air Ministry and the Admiralty. Unless we do that, we cannot obtain, through the Ministry of Supply, a clear picture of the availability of raw materials. It is the allocation of these raw materials as between the demands of the fighting Services and the demands of the export trade that makes the present confusion and delay.

I feel that it is absolutely vital that there should be in the War Cabinet a Minister who can speak with complete authority. If anybody reads about the methods that the Germans employ, he will recognise what Herman Goering has been able to do, in the last two years, in building up his four-year plan. We must never forget that the organisation of Germany in the economic sphere is a very well-perfected machine. While we are talking about a thing, he is acting, and we can learn a great deal more than we have yet learned by discussing these matters with neutrals who wish to be friendly with us, both in Scandinavia and in the Balkans. They always tell us the same thing. They say, "while you send out somebody to give a concert under the British Council, the Germans send out a trade delegation, which is much more effective. You should send out trade delegations who will guarantee to buy what we can promise, because we prefer your goods when we can get them." With that situation, it means, surely, that we shall not be able to sustain the tremendous strain of this war financially unless we can develop at once our export trade. Very few people realise that we may not be able to stand financially this strain for 18 months. It is all very well to say that others will suffer in the same way. The German people are harder than we are. They have been brought up in recent years in a very hard school, and they are disciplined and will stand a great deal until they crack, and when they crack they go to pieces.

In the meantime we can beat them at their own game not by discouraging private enterprise, but by encouraging and helping it, by using people who know their own trade; and I believe that under proper direction, with somebody in the War Cabinet who recognises the importance of our export trade and who knows how British export trade works and will give it its head, we shall go forward and not only equal the monthly statistics as they were last year and the year before, but far exceed them. We must attack Germany in every possible place where German trade has been in the ascendancy. British goods and British skill can, I am certain, recapture that trade, if we can get the shipping and if there is somebody in the War Cabinet to see that the raw material essential for our manufactures is forthcoming. If we can put all these things together and see that we have quick decisions, with confidence restored to our manufacturers—because they have not got it now, and will not have it till they know that their interests are to be looked after—I believe we shall have a happier feeling and not the present disgruntlement generally from traders and manufacturers. I wish the President of the Board of Trade would travel to some of the great centres of England and Scotland and talk to the people that one meets where they foregather. If he had done so, I do not think he would have made the speech that he made to-day, because I am sure that there is no time to lose, and it is about time the Government took decisions rather than took notes of what somebody else has said or done.

9.49 p.m.

Sir A. Sinclair

am sure the whole House will agree that we have had a most interesting Debate to-day, and I hope it will prove to have been a fruitful one. The President of the Board of Trade said, almost yearningly, that he had for a long time been looking for an opportunity to make the case for his Department, and my hon. Friends and I are very glad indeed that our Amendment should have provided him with that opportunity. The hon. Member for Clackmannan and Eastern (Mr. Woodburn), at the close of his very interesting speech, said that the question before us to-day—I am paraphrasing it, and I am sure he will correct me if I do not paraphrase it correctly—was not that of increasing our war strength, but of planning for a better world hereafter.

Mr. Woodburn

I said that in the question of markets we had to decide between struggling for markets and a further war and planning for our own country.

Sir A. Sinclair

But I think the hon. Gentleman said that the main question in his own mind was to plan for a better world in future. I want to make it clear that we have selected the subject of the export trade for our Amendment because of its direct and practical bearing on the war situation. Discussions on social questions, on war aims and peace aims, and on the future world order, are both relevant and timely. They are important, but we must not lose sight or allow the country to lose sight of the fact that behind the temporary and transient quietness on the war front lies the reality that ought to dominate our thoughts at the present time. It is that we are at grips with the most ruthless, formidable, and efficient tyranny that the world has so far known. If Germany has not lashed out at us yet it is because she is reserving, increasing and concentrating her resources for the decisive stroke at her chosen time.

I would not speak like this if there were any danger of panic in this country. Panic would be our greatest possible moral weakness, but it is not one to which the British people are prone. Our moral weakness is the opposite. It is the lesser one, but the very real one, of unimaginative complacency. Germany has been preparing for six years for the totalitarian war. The essential nature of the totalitarian war is that it uses the whole of the nation's man-power, industry and wealth. To secure victory we must lose no time in marshalling the whole of our man-power, industry and wealth and His Majesty's Government are not doing it now. Britain is wasting her power. Who says so? Sir Warren Fisher, whose speech has already been quoted more than once in this Debate. He said that we cannot afford to misuse our economic resources, but, he added, we are "doing that good and hearty." Not only is Sir Warren Fisher Civil Commissioner for the north-west district, in which capacity he is in close and intimate touch with some of the greatest exporting industries in this country, but he was until a few weeks ago Permanent Secretary to the Treasury. The head of the Treasury is in an exceptional position, and Sir Warren has been for many months, to survey the economic resources of this country and of the Empire and the whole field of the economic conflict. His verdict, which he delivered the day before yesterday in Manchester, is that we are now wasting our power, that we need every ounce of our moral courage, drive and efficiency to win the war, and that it is by our export trade that we live and that by its maintenance alone can we succeed in winning the war. The President of the Board of Trade made not only a most interesting, but a most conciliatory speech. He praised the very able speech in which my hon. Friend the Member for Cardigan (Mr. Owen Evans) opened the Debate, and I think he also praised the hon. Member for North Cornwall (Mr. Horabin), who most admirably seconded the Amendment, although he fell foul of him on two particular points on which, in passing; I would like to say a word. He said that my hon. Friend had based a complaint that the merchants of this country were not being consulted by the Government on an allegation that a particular section of the London Chamber of Commerce had not been consulted. First of all, the London Chamber of Commerce, I think I may say without offence to any hon. Member who represents one of our other great cities, does deal with a far wider range of export trade than the chamber of commerce of any other great city. In the second place, the President of the Board of Trade went on to say that as a matter of fact his Department had been dealing closely with the Imports and Exports Committee of the London Chamber of Commerce. I have checked that answer with the chairman of that committee since the right hon. Gentleman spoke, and I am informed that though there have been communications on a number of comparatively routine matters there has been no consultation with the committee or with the London Chamber of Commerce on the great issues affecting the export trade. They have never been asked to give their advice on general policy, though surely it is these organisations of merchants who ought to be consulted.

Mr. Stanley

Apart from the question of the importance of particular chambers of commerce it is the Association of British Chambers of Commerce which represents them all, and that is the national body with which to discuss policy. That is the body which, like the Federation of British Industries, brings these questions of policy to the Board of Trade.

Sir A. Sinclair

I am assured that the active consulťations which the hon. Member for North Cornwall asked for have not, in fact, taken place, and I am urging that there should be consultations, at least on an equality with those which have ťaken place with the great producing trades. The other point upon which the right hon. Gentleman fell foul of my hon. Friend was in disobeying his injunction about making comparisons with 1914. If I may say so respectfully, I think the right hon. Gentleman made a mistake in disobeying ťhat injunction. The conditions of 1914 were so very different from the conditions now. In 1914 nobody had any experience of what a great world war would be like. The bulk of public opinion, even instructed public opinion took the view thať the war would be over quite soon, many people said by Christmas of 1914, and few thought it would last more than a year, or could last more than a year. Nor was there any such apparatus at the disposal of the Government of those days for advising and encouraging and stimulating the export ťrade as we now possess. The President of the Board of Trade of that day—I think it was Lord Runciman—had no Secretary of the Department of Overseas Trade sitting beside him. There had been no study for many years of ťhe problems which would be likely to arise on the outbreak of war. There had been no experience to guide Ministers of those days, and in making comparisons there must be a good many allowances. Another very important point is that ťhe export trade was not so vital to the conduct of the war in those days. We had our great reserves of easily mobilisable foreign investmenťs, as the right hon. Member for Sparkbrook (Mr. Amery) pointed out. Then the market could absorb them easily. No longer is that the case. Therefore, to compare the position now with the position in 1914 is, I venťure to agree with my hon. Friend the Member for North Cornwall, not to make a relevant comparison.

The President of the Board of Trade possesses industry, good will and great administrative ability. It is fair to say that he proved to the House ťhis afternoon that he has been using those gifts to remove some of the worst of the war-time obstructions from our exporť trade; but, while he encouraged the impression that he himself hankered after more effective direction of economic policy than His Majesty's Government now supply, and while, in a reply to the interruption of ťhe hon. Member for East Aberdeen (Mr. Boothby) he rather indicated that, if it were not for a certain personal aspect of the problem, he mighť have expressed his sympathy in more open terms, he also gave me the impression that the Prime Minister was the obstacle to that forward move, just as he was the sťubborn opponent of the establishment of a Ministry of Supply until it was much too late. We need, as the right hon. Member for Sparkbrook said, and as I think the Presidenť of the Board of Trade was himself on the verge of admitting, a sweeping change in the direction of our economic policy and, while he showed personal sympathy with that idea, he gave no indication of Governmenť action. In wartime delay may be fatal. I believe this Debate has shown that this House wants action now.

In war-time such a policy requires, of course, Government initiative, drive and direction, which emphasises the need which would, in any case, exist even if the export trade remained in war-time on a more individualist basis than is possible, for close co-operation with France. I support what my hon. Friend the Member for the Isle of Ely (Mr. de Rothschild) said in that connection. At a time when French industry is suffering from the large proportion of men withdrawn from it for the fighting Services we must be scrupulous to ensure that French trade and industry obtain their full share of the advantage of a drive to capture neutral markets from Germany, and the closer the co-operation between our two countries the more effectively we shall fight on the economic front. Indeed I made this point in the Debate on war economic policy in October, for there was then much evidence of the difficulties which had arisen in inter-Allied trade. To-day, beyond reiterating my belief that franc and sterling will sink or swim together in this war, and that embargoes on French imports and on sterling transfers to France which destroy Allied trade and prevent British traders from fulfilling their French contracts are out of place between allies as close as we are, in this gigantic enterprise of totalitarian war, and that the Government should consult the Anglo-French Chamber of Commerce with a view to removing the substantial and acute grievances of French and British traders, I do not want to ventilate those grievances to-day. I would rather welcome the decision of the Supreme War Council, which was announced two or three weeks ago, to co-ordinate the economic war effort of the two countries and the constitution of certain inter-Allied committees to give effect to that decision.

Let us give these committees a chance to get to work and change the paradoxical situation in which our ally in arms is our rival in trade, before we criticise the blunders that have been made. It is mainly by their vision and success in framing and pursuing a positive policy of inter-allied co-operation that their work will be appraised. Let us remember that Great Britain and France without their colonies and Dominions produce four times as much iron ore as Germany, have three times as many motor vehicles as Germany, produce twice as many motor vehicles every year as Germany, and that the gold reserves and foreign investments of the two countries have been valued by a writer in the "Economist," who included in his valuation only those foreign investments which he believed to be immediately realisable, at no less an astronomical figure than 200,000,000,000 francs. The present agreement will be regarded by us as a milestone on a long and inviting road. If joint buying is economical so is joint selling, and the mutual programme should cover exports as well as imports and the mutual defence of our currencies and resources in foreign investments. I should like to know whether the Secretary to the Department of Overseas Trade, when he replies, will tell us if such a development of policy arising out of this inter-allied agreement is contemplated by the Government, and whether they desire to carry it energetically to its logical conclusion, to a customs union between the two countries.

Now being agreed that our war effort in the economic field must be closely and loyally combined with that of France and, of course, with those of India and the Dominions—we must consider how we ourselves can effectively make our contribution. Surely, it must follow two main lines, first, to develop our natural channels of trade and to enter those markets from which Germany is being excluded by our blockade. The President of the Board of Trade in his speech this afternoon said that a fundamental principle of foreign trade must be to provide ourselves with foreign exchange wherewith to buy foreign goods, and he said that in so many of these discussions on export trade and in correspondence in the Press this central point was missed. He omitted to observe that it was in the forefront of the Amendment which we were discussing this afternoon. To advance in this direction is to protect our currency, and reserves of gold and foreign exchange, and to increase our purchasing power in foreign countries for food, raw materials and munitions, for it will be quicker and more economical for us to buy in foreign countries certain munitions, and certain tools and machines for making munitions, than to turn over plant in this country from the production of exportable goods. Thus, by maintaining and increasing the flow of our exports we can purchase the man-power of other countries for the rapid provision of war supplies.

Therefore, surely the first aim of our policy should be to maintain a constantly increasing flow of exportable goods and to find markets for them both by expanding our own along those broad and well-known channels of trade to which the President of the Board of Trade referred, and also by invading German markets. Indeed, amply justifiable as is our action in stopping the export of German goods in neutral ships, we should realise that many neutral countries will be hard put to it to do without their German exports. Take, for example, the loss to the Dutch East Indies of great quantities of chemical fertilisers from Germany, on which they rely for the proper cultivation of their land. If they do not get the fertilisers, the whole economy of the Dutch East Indies will suffer. Our manufacturers of chemical manures are already very busy, but they ought to be helped and encouraged to mitigate the injury to the Dutch East Indies by exporting there at least a substantial proportion of what those islands have been in the habit of importing from Germany. So in many other directions we ought to try to mitigate the effect of the embargo on neutrals by supplying British goods to take the place of German goods.

Our second aim should be to increase the effect of our blockade by buying goods which Germany wants from countries contiguous to Germany. So conspicuously have we failed to make any impression on the markets in countries contiguous to Germany that the prices of German goods exported to those countries are rising, and the prices of supplies from those countries to Germany are falling. We want, if possible, to supplant Germany in those markets; or at least to make the terms of trade as unfavourable to Germany as possible.

The Balkans are an important field for activities of this kind. I was interested when the hon. Member for East Aberdeen interrupted my hon. Friend the Member for Cardigan and mentioned tobacco in that connection. I remember that I was first rash enough to mention tobacco when the Prime Minister announced that we had given a guarantee to Greece in the spring of this year. When I mentioned the importance of increasing the export of tobacco from Greece, in order to strengthen her financial position and so to increase the power of Greece to join with us in resisting her enemies, I am sorry to say that, with the exception of a few Members, of whom I am bound to say the hon. Member for East Aberdeen was one, the House received the suggestion with laughter. Yet it is a vital question, and I hope the Government are giving attention to the stimulation of the trade in Balkan tobacco and of other goods which the Balkan countries can produce. It is im- portant also because unless we take their imports they will not take our exports. Turkey, for example, is finding great difficulty in finding the imports she desires. It is true that she has a trade mission here, and I hope that it will be successful; but it is true also that she has sent a mission to Rome because she has difficulty in buying the goods she requires. The hon. Member for Abingdon (Sir R. Glyn) has just been referring to Yugoslavia; the effort which Germany is making to get the metals of Yugoslavia, and the difficulty that the Yugoslavians are having in selling metals—precious metals in war time—to this country. Yugoslavia has also considerable quantities of valuable agricultural produce to sell—bacon, lard and so forth, Germany is taking 57 per cent, of Yugoslavia's exports, while we are taking only 2½ per cent. at present. All through the Balkan countries there are German agents, German commercial travellers, German merchants, going about spreading German news, German ideas, German propaganda, and impressing the Balkan peoples with the power and prestige of Germany. Let us send British agents and commercial travellers, to spread British news and ideas, and to sell British goods. The hon. Member for Abingdon referred to the admirable activities of the British Council in sending lecturers to Yugoslavia and other Balkan countries. They are spending a good deal of public money there, but my submission to the House this evening is that good trading relations are not less important than lectures in cementing friendship between the countries. Compared, for example, with our trade with South America, any trade we could do with the Balkans would be economically small, and any loss we might incur on any particular transaction would be financialy negligible, but the political effect in a vitally important area of Europe would be tremendous, and would amply repay any financial loss in buying a little above, or selling perhaps a little below, that datum line, which, in present world conditions, is so very abstract, and which we call the world price level.

I was going to say a good deal about licences and censorship and other restrictions, but instead of saying that I am going to acknowledge frankly the good will that the President of the Board of Trade showed in his speech on that part of his subject and the obvious efforts he is making to remove those restrictions. But I was still left with a feeling that some positive action was required to encourage and foster our export trade. When the Secretary to the Department of Overseas Trade replies, I shall be glad if he will tell the House whether it is true that his Department, as I am informed, has been cut down in staff by more than one-half since the beginning of the war. It is perfectly true, I gather from what the President of the Board of Trade said, that it has received, by way of reinforcement, what was originally the export section of the Board of Trade; but apart from this reinforcement, the actual staff of the Department of Overseas Trade has not, as one would naturally expect, been increased, but actually has been substantially reduced. Nor is anything but the most meagre priority in the supply of raw materials accorded to the export trade, or at any rate it has not been until very recently. Possibly the measures which the President of the Board of Trade has explained to the House this afternoon for dealing with priority are effecting some improvement, but I have seen the list of priorities, of the iron and steel control, for example, which accords no priority at all to the export trade. The non-ferrous metals control accords some. There is the usual long list of Service departments, which come first, A.R.P., and so forth, and then at the end came "utilities," and "general industry," and then, last of all, on the list of priorities comes the export trade. Thus in the priority list the export trade ranks after utilities and general industry.

In these circumstances, my hon. Friends and I say to-day, as we said in the Debate on War Economic Policy six weeks ago, that the first action of the Government should be to appoint a Minister to sit in the War Cabinet, to be responsible to Parliament for the whole range of economic policy in war time, and to co-ordinate and supervise the activities of all the Departments dealing with economic policy among themselves, and, through his membership of the War Cabinet, with those of other Departments. That Minister should be assisted by a staff, with a man of the calibre of Lord Stamp at the head of it, but giving his whole time to the job. They should then frame a concrete, aggressive policy of war economy. I wish His Majesty's Government had more of the aggressive spirit. I think that sometimes it would be a good thing if the First Lord of the Admiralty would bite his colleagues. This Minister and his staff would have to employ different economic weapons to achieve their object—differential exchanges, subsidies, the despatch of trade missions to foreign countries and the organisation of merchants in this country, in consultation with chambers of commerce, are methods which should be employed. The Minister for War Economy should have, as we have proved in the past—it is an important thing in administration of this kind, especially when new organisations are being started—a staff to follow up his directions and instructions as they go ramifying through all the Departments of State and ensuring at every stage that the action in the several Departments is co-ordinated.

It was to express this demand for that strong and effective direction of our war economic policy that my hon. Friends and I put down our Amendment. The labyrinth of committees mentioned by the President of the Board of Trade is no sustitute for that. It is well to remember the experience of my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) when he first went to the Ministry of Munitions. There sat the Munitions Council, representing the Departments. My right hon. Friend brought before them his plan fat a great expansion in the production of munitions. There they all were, as the President of the Board of Trade described to us, each one prepared to tell the Minister of Munitions how his proposals would react upon their Department. They told him that the reactions on their Departments would be disastrous, and the meeting ended. As they filed out of the room, my right hon. Friend's private secretary said to him: "I suppose that is the end of the plan, Sir?" "No," said my right hon. Friend, "that is the end of the committee." It was then that he started the great drive that in so short a time completely revolutionised munitions production in this country. We believe that there must be greater concentration of responsibilities if we are to attain the quick results which war demands. We must divide the House on our Amendment because our demand has not been granted, but it is not the Division but the Debate that has been the important thing to-day. My hon. Friends and I are grateful to the House for the generous and almost unanimous support which has been accorded to the proposal which we have put before it.

10.23 p.m.

Mr. R. S. Hudson (Secretary, Overseas Trade Department)

I imagine that it would rarely occur to any one standing here to wind up a Debate previous to a Division for which a Three-Line Whip has been issued, to thank the party which has put down the Amendment for having done so; but I can assure the right hon. Gentleman and his friends that both the President of the Board of Trade and myself are extremely grateful to them, because I think we can claim that the opinion of the House has been practically unanimous in emphasising the importance of the export trade, for which we are both responsible, in our war effort at the present time.

Several hon. Members in their speeches have rather tended to forget or to overlook the fact that when you are dealing with the export trade of this country, the problem is a very different one in peace and in war time. Without any disrespect, I think I can also suggest that it was those hon. Members who have had practical experience of business who realised that in war time the problem of the export trade is not markets but the supply of raw materials and productive capacity; and that it was those hon. Members who have less knowledge of business who harped in their speeches on the necessity of finding markets. In fact to-day the world is not a buyer's market but a seller's market. Our difficulty is not to find markets. The world is clamouring for our goods and the difficulty which we had better face to-night is how we are going to deliver the goods which every one wants.

I do not think we altogether realise the enormous extent to which Service demands have grown now as compared with the end of the last war. I understand that there are certain hon. Members who propose to take to task the Minister of Supply for not getting on quick enough with his job. They must not forget that in exact proportion as the Minister of Supply gets on with his job it presents the export trade with so much the more difficulty. We have to realise that the demands of the Service Departments and of ordinary industry are to-day infinitely more complicated and complex than they used to be and that we started this war with a mercantile fleet diminished in numbers and subject to the delays inherent in the convoy system, with the consequently diminished carrying capacity which that brings about.

It must therefore be obvious to the House that even assuming that we are going to import every year the same amount of tonnage as we have been accustomed to import in the past, it is impossible, having regard to the increased supplies necessary for the Service Departments, that the same amount of supplies will be available as in peace time for the home demand and for the export trade. One or the other has obviously to suffer. There has been general recognition that priority must go firstly to the Service requirements, secondly to export, and that the home demand must take what is left. But even if you admit that, the problem is by no means solved.

The President of the Board of Trade has explained why certain export licence restrictions had to be imposed at the commencement of the war, and however hon. Members may criticise the methods of administration which were adopted and the mistakes we no doubt made in the early days, I do not think anyone will seriously maintain that the policy we pursued was wrong and that we ought not to have taken steps which, on the one hand, ensured supplies where there was a temporary shortage, and, on the other hand, prevented similar supplies going to the enemy. As my right hon. Friend said, the civil servants who administered those restrictions were confronted with all sorts of new problems which it had not been possible to foresee. Anyone who thinks of what the position was then, not knowing what the Service requirements were, not knowing what stocks existed at the moment of the outbreak of the war, must realise that congestion was bound to take place in the early days.

The right hon. Member for Caithness and Sutherland (Sir A. Sinclair) said that he would like to know whether it was true that the staff of my Department had been halved. It is true, and I will tell the right hon. Gentleman why I agreed to my staff being reduced at that moment. It was clear after the first day or two following the outbreak of war that the work that we had hitherto been doing, namely, trying to find markets for our exports, was bound temporarily to come to an end, and owing to the disorganisation inevitable in the first few weeks of war, equally a great deal of the inquiries that normally come daily into the Department also ceased. It is a fact that during the early days, and indeed, for the first few weeks of the war, both I and my officials had extremely little to do. At the same time, there were the new Departments. The Export Licensing Department said to me, "The export trade is being held up because we cannot get the licences issued. We have not enough staff; can you lend us some?" I cannot believe that any hon. Member will say that I ought not to have agreed to that loan. The Ministry of Food said, "We have got to impose restrictions on the export of certain foodstuffs. We want to keep what exports we can going. Will you lend us some staff to help to carry out the job?" The Ministry of Supply said, "Exports are being held up because of the difficulties of finding raw materials. Will you lend us some men to help in that work?"

I should not have been justified in refusing those requests, because every one of them was a request to help directly or indirectly in the prosecution of the export trade of this country. I made a condition that when things returned to normal, and when our work started to grow again, as I was sure it would do, I could count on the Treasury for a return of those men, or for the appointment of a similar number of men, or more men. I have just received a message from the Treasury to say that they agree to the increase of my staff by no less than six senior officers straight away. I can therefore assure hon. Members that, as far as my Department is concerned, we shall not suffer from any lack of staff.

The right hon. Member for Caithness and Sutherland said that he could not understand why my right hon. Friend did not heed the warning given by the hon. Member for North Cornwall (Mr. Horabin) that there should be no comparison with 1914. The right hon. Gentleman said that conditions were entirely different. Of course, they are different, but we have at the present time to meet an accusation that the action we took in imposing restrictions hampered our export trade. Surely, we are entitled to refute that accusation if we can, and what is much more important than refuting it in the House is to convince the world also, that it is untrue. I can conceive of no better method of showing that the restrictions we imposed did not hamper our export trade than by showing that, contrary to what happened in 1914, when, as my right hon. Friend said, it took until 1916 to return to our export figures for the months immediately preceding the war, this time we have done it very nearly in the first three months.

I took the trouble to convert into figures the percentages which my right hon. Friend gave and perhaps those hon. Members who have heard them before will forgive me if I repeat them for the benefit of hon. Members who have not heard them. In the first month of the last war exports dropped by £20,000,000. In the first month of this war, they dropped by £16,000,000. In the third month of the last war exports were still £18,000,000 down. In the third month of this war, I shall be extremely surprised if they are £6,000,000 down. I think that is not only a refutation of the charge that our licensing restrictions have interfered with export trade but a magnificent testimony to the courage of our exporters in carrying on, under unprecedented difficulties.

My right hon. Friend the Member for Sparkbrook (Mr. Amery), my hon. Friend the Member for East Aberdeen (Mr. Boothby) and the right hon. Gentleman the Member for Caithness and Sutherland all urged that we ought to take active steps to try to use our export trade as a weapon in the economic warfare against Germany in the Balkan States. They suggested that we should immediately send out delegations to buy up the supplies available there to prevent them falling into the hands of Germany and that in return we should sell to those countries goods at lower prices than the Germans, in order to make the task of Germany still more difficult I think all three assumed that, in fact, we had done nothing along those lines. Reuter's under date 5th December, published the follow- ing telegram from their correspondent in Germany: Nazi Warning to Balkan Farmers. A warning that Germany would not tolerate indirect participation in England's economic warfare, by the agriculturists of South-East Europe, is uttered by the 'Berliner Boersen Zeitung.' The paper claims that Britain is infringing on Germany's sphere of influence by selling at lower prices than the German exporters, by raising the prices of goods that Germany wants to buy and by buying all available stocks of commodities that Germany requires. Then my right hon. Friend the Member for Sparkbrook and my hon. Friend the Member for East Aberdeen urged that it was most important to-day to try to give the exporters of this country not merely help but direction. I agree to a great extent and I venture to think that that is exactly what we are doing. I asked a friend of mine; who is well acquainted with business, to tell me in a few words what he thought were the main difficulties in the way of the exporter at present. He classed them under five heads. He said the first was frustration, the sense of difficulty felt by exporters, at all the various obstacles in the way of doing business, the feeling that the game was not worth the candle. He said a great number of exporters or would-be exporters had given up the struggle. The second difficulty, he said, was that of supply. He felt that unless drastic restrictions were placed on the Service demands, the business community of this country, as a whole, would come to believe that the Services wanted everything and that there was nothing left for export. The third difficulty, he said, was the matter of price. The fourth was the doubt in the minds of overseas customers whether we could give delivery owing to war risks and so forth, and the fifth was a doubt in the minds of British traders whether the Government really meant business when they said that the export trade must be carried on.

The steps that we have taken to try and meet these difficulties were outlined broadly by my right hon. Friend the President of the Board of Trade. We have asked the exporters' organisations of this country and the individual industries which do the biggest export business to get hold of their members and to ascertain from them approximately the amount of raw materials that they will require to maintain their export trade at the 1937 level. As soon as we receive, from each industry, those estimates, we then go to the Ministry of Supply and arrange with them that the necessary allocation of raw materials shall be set on one side as far as is possible, so that all the manufacturers in that particular industry can be assured for the following 12 months that they will get the necessary raw materials. They will then be able to assure their customers that at all events they will be able to deliver the goods, provided the order is placed, always, of course, subject to any unforeseen catastrophe. My right hon. Friend quoted the flax and linen industry. As hon. and right hon. Members know, flax was in any case in short supply before the war. When we came to look into the position we found that you had the normal home demand, that you had the normal export demand, and that in addition you had an overwhelming demand from the Services, the Army, Navy and Air Force. With the assistance of my hon. and gallant Friend the Parliamentary Secretary to the Ministry of Supply, who has been extremely helpful in all these matters, we collated these figures and found that the visible supplies of flax were nothing like sufficient to meet those demands. As a matter of fact, they were not even sufficient to meet the Service requirements, let alone any of the others, but my hon. and gallant Friend went through the Service requirements with a fine tooth comb, and in the end was able to assure me that he would be able to set aside enough flax for Belfast to carry on the whole of its normal export trade. That involved the complete abandonment of the home market, and it involved also a certain limitation of supplies for the Services. As a result of this action, the industry, the manufacturers in Belfast can now go ahead free of all those frustrations, free of all those difficulties with controllers, knowing that the stuff is there and that they will be able to get delivery. The same thing is true of the motor car trade and of the locomotive trade. We were able after negotiations to agree with the Ministry of Supply on the amount of locomotive-producing capacity to be devoted to munitions, the amount to be devoted towards building locomotives for the Expeditionary Force, and the amount that was to be devoted to the export trade. We sent telegrams to our representatives abroad, telling them what we had done and saying to them, "You can now approach our customers in the important markets and say that if they will place orders at once for locomotives, we can guarantee delivery." That is the practical way in which we are endeavouring to help our exporters and at the same time as far as possible to get them to direct their exports to the most important markets where we require exchange.

In the course of his speech, the hon. Member for the Isle of Ely (Mr. de Rothschild) criticised the choice by my right hon. Friend the Prime Minister of the Chancellor of the Exchequer as Chairman of the Co-ordinating Committee on Economic Policy because, he said, the Treasury was not a "go-getter," and that in the export trade you wanted a "go-getter." In actual fact, the Treasury is the best "go-getter" in the export trade because it is the one Department that needs foreign exchange. Therefore, nobody is more likely to help, and nobody has, in fact, helped us more than the Chancellor of the Exchequer as Chairman of that committee. The right hon. Member for Sparkbrook said he thought we ought to export wool as much as possible in the manufactured state instead of in the raw state; and one other Member asked whether there was any priority between raw materials, partly processed goods and fully manufactured goods. If we have only a limited amount of raw material available for spreading over the whole trade, and our cardinal desire is to get as much foreign exchange as possible, we have certainly to concentrate our exports on the highly finished goods in which the labour content is greatest in proportion to the value of the raw material. I hope my right hon. Friend will be satisfied with that explanation. The hon. Member for South Bradford (Mr. Holdsworth), whom I should like to thank for his speech, asked why it was necessary to hold up goods at the ports after an export licence had been granted; and why it was necessary to say in some cases, "You cannot have an export licence to-day, but if you apply again you can have one in a month." The answer is that that only applies to a certain number of destinations which are known as "dangerous" destinations, that is, countries which are contiguous to Germany. The Minister of Economic Warfare is anxious that they should not be allowed to import quantities beyond what they can use in any given month, because of the danger of them being sent to Germany. We are not the only exporters to these countries. We have to take account of their imports from all countries, and it sometimes happens that the figures of imports for a particular month suddenly go up and then we have to telegraph to the Customs to hold up all further exports. I admit it is annoying to the exporter, but in the circumstances of the case it is entirely necessary.

The hon. Member for North Cornwall and the hon. Member for the Isle of Ely referred to the famous question of lavatory cisterns and quoted that as an instance of the appalling difficulties that rnanufacturers have to meet. They said that the maker of one of the small parts in the cistern had to go to the brass controller, and found eventually that he was not able to get an export licence. That only shows, contrary to what my hon. Friend the Member for North Cornwall said, how right our method is. If the manufacturers of lavatory cisterns had only come to me and said, "This is our requirement of raw materials for export," I could have got the necessary brass from the Parliamentary Secretary to the Ministry of Supply, and they would not have had all that difficulty. The right hon. Member for Caithness and Sutherland asked a question about our imports from France. It is true that at the beginning of the war import restrictions were imposed covering, incidentally, France. In fairness, however, it should be pointed out that these restrictions covered only one-quarter of the export trade of France to this country. As a result of negotiations an agreement was reached between the Chancellor of the Exchequer and the French Government under which three-quarters of those restrictions have now been removed. The French Government have set up, with ourselves, joint committees to coordinate a large number of mutual activities, including purchases in overseas countries, and although I have not time to go through the list my right hon. Friend can be assured that as and when further needs develop they will be dealt with.

I hope that what I have said and what my right hon. Friend said earlier in the evening has convinced the House that the restrictions to which the Liberal party take exception were necessary, and that despite those restrictions our export trade is relatively in a better state than it was in 1914, and further that we are genuinely doing our best to alleviate those restrictions. But it would be idle for me to say that in the existing state of affairs the restrictions are unnecessary. Indeed, in the future, as the war goes on and as the shortages of this material or that develop, whether those shortages are temporary or permanent, or as new uses for old products develop, it is very likely that further restrictions will have to be imposed. All I can promise is that we will do our best to see that they are made as little burdensome as possible, and that their effects will be mitigated as much as possible. As an earnest of this, my right hon. Friend issued instructions only the other day that there is to be no drastic refusal of an export licence at the request of any of the Service Departments without prior Ministerial approval by himself or myself. But, apart from that narrow aspect of the problem, I think it is clear that he House, and certainly the country, will have to realise that this war is going to be a cash-and-carry war, and that our Service requirements both in men, in industry and in war materials are infinitely greater than they ever were before.

All connected with the Services will have to realise that if they want to see a continuance of the supply of their munitions and their raw materials we must be allowed to export in order to pay for them. All connected with the Services will have to adjust their programme accordingly. The public too will have to realise that in respect of some articles all the time, and in respect of certain articles during part of the time, there will be shortages, and that in the last resort it is the home demand that will have to suffer.

War nowadays is more than ever before a war of economic organisation, for the issue of this war is going to depend upon the extent to which we can organise our economic resources, and whether we can organise our resources from overseas better than the Germans can organise such resources as they can get overland. The final question is going to be, whose industrial organisation is going to stand, the strain best? My own personal view is that the British people are prepared to make any sacrifies provided they are convinced that those sacrifices are necessary, and I venture to think that some of the complaints we have heard in the Press have been largely due to a lack of real appreciation by the public of the immensity of the war effort we have to put forward. I think that perhaps we have not sufficiently told the public of the real situation. We must let them know the true picture. There are a certain number of things which they cannot be told, because they would be of vital assistance to the enemy, but those are in a minority. We may be very certain that Hitler has his shortages, which we believe are greater than ours, and we hope they will become increasingly so. I do not think it would do a great deal of harm if he were to learn now, what he must learn sooner or later, that for obvious reasons we cannot always get everything we should like.

It has been said that we must husband our resources. I quite agree. Every month that the war goes on means that we have to husband them more and more. One thing of which we can be certain is that no resources devoted to the export trade will be wasted. If supplies are not sufficient to go round we shall have to tell the public. In the last resort the manufacturer will have to turn over to export and the home consumer will have to do the best he can. The hon. Member for South Bradford (Mr. Holdsworth) gave an illustration which I think was very correct; I would extend it a little further. I say that the time may well come, and it may be nearer than we think, when our war effort will be best assisted by selling a piece of cloth abroad to pay for the import of the necessary foodstuffs from overseas rather than see that piece of cloth made into a suit for home civilian consumption. It is the fashion to say that we are fighting only against Hitlerism; I believe we have to realise that we are fighting for our very lives, and that unless we continue to export we shall certainly not survive.

Question put, "That those words be there added."

The House divided: Ayes, 31; Noes, 226.

Division No. 3.]	AYES.	[10.59 p.m.
Acland, Sir R. T. D.	Griffith, F. Kingsley (M'ddl'sbro, W.)	Rathbone, Eleanor (English Univ's.)
Ammon, C. G.	Hall, W. G. (Colne Valley)	Rothschild, J. A. de
Attlee, Rt. Hon. C. R.	Harvey, T. E. (Eng. Univ's.)	Shinwell, E.
Benn, Rt. Hon. W. W.	Horabin, T. L.	Sinclair, Rt. Hon. Sir A. (C'thn's)
Benson, G.	Lee, F.	White, H. Graham
Charleton, H. C	McEntee, V. La T.	Windsor, W. (Hull, C.)
Cocks, F. S.	Mathers, G.	Woodburn, A.
Davies, C. (Montgomery)	Naylor, T. E.
Ede, J. C.	Oliver, G. H.	TELLERS FOR THE AYES.—
Evans, D. O. (Cardigan)	Parker, J.	Sir Percy Harris and Mr. Wilfrid
Fletcher, Lt.-Comdr. R. T. H.	Price, M. P.	Roberts.
Garro Jones, G. M.	Pritt, D. N,

NOES.
Acland-Troyte, Lt.-Col. G. J.	Dunglass, Lord	Maitland, Sir Adam
Albery, Sir Irving	Eastwood, J. F.	Makins, Brigadier-General Sir Ernest
Alexander, Brig.-Gen. Sir W.	Eden, Rt. Hon. A.	Manningham-Buller, Sir M.
Allen, Col. J. Sandeman (B'knhead)	Edmondson, Major Sir J.	Margesson, Capt. Rt. Hon. H. D. R.
Amery, Rt. Hon. L. C. M S.	Elliot, Rt. Hon. W. E.	Mason, Lt.-Col. Hon. G. K. M.
Anderson, Rt. Hn. Sir J. (So'k Univ's)	Ellis, Sir G.	Mayhew, Lt.-Col. J.
Apsley, Lord	Emery, J. F.	Medlicott, Captain F.
Aske, Sir R. W.	Emmott, C. E. G. C	Meller, Sir R. J. (Mitcham)
Assheton, R.	Emrys-Evans, P. V.	Mellor, Sir J. S. P. (Tamworth)
Astor, Viscountess (Plymouth, Sutton)	Entwistle, Sir C. F.	Moore, Lieut.-Colonel Sir T. C. R.
Baillie, Sir A. W. M.	Everard, Sir William Lindsay	Moore-Brabazon, Lt.-Col. J. T. C.
Baldwin-Webb, Col. J.	Fildes, Sir H.	Morgan, R. H. (Worcester, Stourbridge)
Balniel, Lord	Fleming, E. L.	Morris, J. P. (Salford, N.)
Baxter, A. Beverley	Fox, Sir G. W. G.	Morris-Jones, Sir Henry
Beamish, Rear-Admiral T. P. H.	Fremantle, Sir F. E.	Morrison, G. A. (Scottish Univ's.)
Beauchamp, Sir B. C.	Gibson, Sir C. G. (Pudsey and Otley)	Morrison, Rt. Hon. W. S. (Cirencester)
Bennett, Sir E. N.	Gilmour, Lt.-Col. Rt. Hon. Sir J.	Munro, P.
Bernays, R. H.	Gledhill, G.	Nicholson, G. (Farnham)
Bird, Sir R. B.	Glyn, Major Sir R. G. C.	O'Connor, Sir Terence J.
Blair, Sir R.	Gower, Sir R. V.	O'Neill, Rt. Hon. Sir Hugh
Boothby, R. J. G.	Graham, Captain A. C. (Wirral)	Palmer, G. E. H.
Bossom, A. C.	Greene, W. P. C. (Worcester)	Peake, O.
Boulton, W. W.	Gretton, Col. Rt. Hon. J.	Peters, Dr. S. J.
Bower, Comdr. R. T.	Gridley, Sir A. B.	Plugge, Capt. L. F.
Boyce, H. Leslie	Grigg, Sir E. W. M.	Ponsonby, Col. C. E.
Braithwaite, Major A. N. (Buckrose)	Grimston, R. V.	Pym, L. R.
Brass, Sir W.	Guest, Lieut.-Colonel H. (Drake)	Radford, E. A.
Briscoe, Capt. R. G.	Guest, Maj. Hon. O. (C'mb'rw'll, N. W.)	Raikes. H. V. A. M.
Broadbridge, Sir G. T.	Hambro, A. V.	Rankin, Sir R.
Brocklebank, Sir Edmund	Hammersley, Captain S. S.	Reed, A. C. (Exeter)
Brooke, H. (Lewisham, W.)	Hannah, I. C.	Reed, Sir H. S. (Aylesbury)
Brown, Brig.-Gen. H. C. (Newbury)	Hannon, Sir P. J. H.	Reid, Captain A. Cunningham
Bull, B. B.	Harbord, Sir A.	Rickards, G. W. (Skipton)
Bullock, Capt. M.	Haslam, Henry (Horncastle)	Rowlands, G.
Burghley, Lord	Hely-Hutchinson, M. R.	Royds, Admiral Sir P. M. R.
Burgin, Rt. Hon. E. L.	Heneage, Lieut.-Colonel A. P.	Ruggles-Brise, Colonel Sir E. A.
Butcher, H. W.	Hepburn, P. G. T. Buchan	Russell, Sir Alexander
Chamberlain, Rt. Hn. N. (Edgb't'n)	Higgs, W. F.	Russell, R. J. (Eddisbury)
Channon, H.	Hogg, Hon. Q. McG.	Salmon, Sir I.
Chapman, A. (Rutherglen)	Holdsworth, H.	Salt, E. W.
Chapman, Sir S. (Edinburgh, S.)	Horsbrugh, Florence	Salter, Sir J. Arthur (Oxford U.)
Clarke, Colonel R. S. (E. Grinstead)	Howitt, Dr. A. B.	Samuel, M. R. A.
Clarry, Sir Reginald	Hudson, Capt. A. U. M. (Haek., N.)	Sandeman, Sir N. S.
Cobb, Captain E. C. (Preston)	Hulbert, Squadron-Leader N. J.	Sanderson. Sir F. B.
Colman, N. C. D.	Hume, Sir G. H.	Schuster, Sir G. E.
Colville, Rt. Hon. John	Jarvis, Sir J. J.	Scott, Lord William
Cooke, J. D. (Hammersmith, S.)	Jennings, R.	Selley, H. R.
Courtauld, Major J. S.	Joel, D. J. B.	Shakespeare, G. H,
Cox, H. B. Trevor	Jones, Sir G. W. H. (S'k N'w'gt'n)	Shaw, Major P. S. (Wavertree)
Craven-Ellis, W.	Kerr, Sir John Graham (Sco'sh Univs.)	Shaw, Captain W. T. (Forfar)
Crookshank, Capt. Rt. Hon. H. F. C.	King-Hall, Commander W. S. R.	Shepperson, Sir E. W.
Crowder, J. F. E.	Lamb, Sir J. Q.	Shute, Colonel Sir J. J.
Cruddas, Col. B.	Lennox-Boyd, A. T. L.	Simmonds. O. E.
Culverwell, C. T.	Levy, T.	Somervell, Rt. Hon. Sir Donald
Davidson, Viscountess	Lewis, O.	Southby, Commander Sir A. R. J.
Davies, Major Sir G. F. (Yeovil)	Liddall, W. S.	Spens, W. P.
De la Bère, R.	Llewellin, Colonel J. J.	Stanley, Rt. Hon. Oliver (W'm'l'd)
Denman, Hon. R, D.	Lloyd, G. W.	Stewart, J. Henderson (Fife, E.)
Denville, Alfred	Loftus, P. C.	Storey, S.
Dodd, J. S.	Lucas, Major Sir J. M.	Strauss, H. G. (Norwich)
Doland, G. F.	Lyons, A. M.	Strickland, Captain W. F.
Donner, P. W.	Mabane, W. (Huddersfield)	Stuart, Lord C. Crichton (N'thw'h)
Dorman-Smith, Col. Rt. Hon. Sir R. H.	M'Connell, Sir J.	Sueter, Rear-Admiral Sir M. F.
Drewe, C.	McCorquodale, M. S.	Sutcliffe, H.
Dugdale, Captain T. L.	MacDonald, Rt. Hon. M. (Ross)	Tasker, Sir R. I.
Duggan, H. J.	McKie, J H.	Taylor, Vice-Adm. E. A. (Padd., S.)
Duncan, J. A. L.	Magnay, T.	Thomas, J. P. L.

Thomson, Sir J. D. W.	Wallace, Capt. Rt. Hon. Euan	Williams, C. (Torquay)
Thornton-Kemsley, C. N.	Ward, Lieut.-Col. Sir A. L. (Hull)	Williams, Sir H. G. (Croydon, S.)
Titehfield, Marquess of	Ward, Irene M. B. (Wallsend)	Windsor-Clive, Lieut.-Colonel G.
Touche, G. C.	Waterhouse, Captain C.	Wise, A. R.
Tree, A. R. L. F.	Watt, Lt.-Col. G. S. Harvie	Womersley, Sir W. J.
Tryon, Major Rt. Hon. G. C.	Wayland, Sir W. A.	Wragg, H.
Tufnell, Lieut.-Commander R. L.	Wells, Sir Sydney
Turton, R. H.	White, Sir R. D. (Fareham)	TELLERS FOR THE NOES.—
Wakefield, W. W.	Wickham, Lt.-Col. E. T. R.	Mr. James Stuart and Lleut.-
		Colonel Kerr.

Main Question put, and agreed to

Resolved, That an humble Address be presented to His Majesty as followeth: Most Gracious Sovereign, We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.

To be presented by Privy Councillors or Members of His Majesty's Household.