HC Deb 21 February 1939 vol 344 cc227-348

Motion made, and Question proposed, That it is expedient to amend the Defence Loans Act, 1937, so as—

  1. (1) to increase to eight hundred million pounds the limit on the aggregate amount of the sums which may be issued out of the Consolidated Fund under Sub-section (1) of Section one; and
  2. (2) to include in the expression 'defence services' the following civil services, namely, air-raid precautionary services and grants-in-aid of the Essential Commodities Reserves Fund."—[Sir John Simon.]

Amendment proposed in line 2, to leave out "eight hundred," and to insert "seven hundred and ninety-nine."—[Mr. Dalton.]

Question again proposed, "That the words proposed to be left out stand part of the Question."

3.56 p.m.

The Prime Minister (Mr. Chamberlain)

I do not think it will be necessary for me to trouble the Committee with any very long observations this afternoon. During the Debate which took place yesterday the House was never uncomfortably crowded, and those who listened to it must, I think, have been very much impressed by the contrast in the general atmosphere in which the discussions were conducted, as compared with that which has prevailed when we have considered these defence questions on previous occasions. I, myself, felt that there was an absence of those strong feelings of controversy or of those symptoms of anxiety which I had noticed before, and I have derived the general impression that Members in all parts of the Committee were being forced by the pressure of facts and by the realisation of the realities of the situation, towards something like general agreement as to the necessity for the armaments programme which we are carrying through, as to the manner in which it is being conducted and, particularly, as to the way in which it is to be financed. That is a considerable change from the past.

I recall, for example, that last year when the House was asked to approve of the proposals in the White Paper on defence, the party opposite expressed the view that it was only by collective security through the League of Nations that the safety of the country could be ensured and the maintenance of peace secured. I was very much struck by the fact that during the whole of the speech of the hon. Member for Bishop Auckland (Mr. Dalton), who led off for the Opposition, there was no mention of either collective security or the League of Nations, and that seemed to me to indicate that the party opposite had, at any rate, come to a realisation of the fact that it was of no use in present circumstances to appeal to the League of Nations to obtain collective security for us, but that we had to trust to other means of maintaining peace and keeping this country safe.

An Hon. Member

You destroyed it.

The Prime Minister

The hon. Member says "You destroyed it." Of course it is part of the old political stock-in-trade of his party to say that the League of Nations has been killed by the action of the present Government, but I think that the historian of the future, who will perhaps look upon events with a somewhat more impartial eye, will recall that in the crisis of the League of Nations there was no country which sacrificed so much, which took such risks, which incurred such obloquy and which made such efforts to carry out the methods which were contemplated by the constitution of the League, as did this country. He will remember that striking phrase which was used by my right hon. Friend the Home Secretary when he said that no country but this had moved a ship, or a gun or a man. Perhaps the historian will come to the conclusion that if the League failed to carry through the policy of sanctions, then it was not due to the action or inaction of this country, and indeed that blame cannot be attached to any one country or any group of countries in that connection, but the real explanation was that it had been sought to impose upon the League a task which was completely beyond its powers. I do not despair of the view that the party opposite may presently arrive at the conclusion that the only chance that the League has of becoming again an effective factor in the preservation of peace will be when it has abandoned the idea that peace can be imposed by force.

The change I observed, however, was not confined to the Opposition. The change was visible in all parts of the Committee, and certainly it was very remarkable that when my right hon. Friend the Chancellor of the Exchequer was putting before the Committee the amazing figures which are contemplated in the defence expenditure of the coming year, the attitude of hon. Members appeared almost to show an indifference, an apparent indifference, to the tremendous significance of the figures, and it was only when he came to that part of his speech in which he told the Committee how he proposed to divide the expenditure between revenue and borrowing that what used to be called "a certain liveliness" became apparent. I am aware that conclusions have been drawn from what my right hon. Friend then said about this proposed division, conclusions which, perhaps, did not take full account of the warning with which he ended his remarks. What I have called apparent indifference did not arise from the relief of hon. Members at the notion that my right hon. Friend was not likely to contemplate major increases in taxation in the next financial year. I think this changed attitude to which I have referred is due to the sense which, I believe, was prevalent not only in the House but generally throughout the country, that the long period of effort and preparation and organisation of our programme of defence is now at last beginning to bear visible fruit, and that we are conscious, all of us, that even in the last few months the output of weapons and equipment and munitions of all kinds has shown a marked increase, and, more than that, has shown that the great care, the great amount of thought and the great amount of work which have been put into this programme have been wisely expended and are now giving us the fruits of our labour.

We are not in these two days proposing to devote any great amount of attention to the subject of civil defence; that is reserved for a later occasion. We all know that the provision for civil defence has somewhat lagged behind the preparations that have been made in the three more active branches of defence. But in the case of civil defence, under the hand of my right hon. Friend the Lord Privy Seal, the organisation of the necessary measures is now falling into place, and I think it will not be very long before we are able to say of air-raid precautions and kindred measures that they, too, are giving us the results we desire to see.

The hon. Member for Bishop Auckland made one criticism upon the White Paper which, perhaps, I should notice. He said that it contained nothing new about Co-ordination of Defence. If I may say so, I think that that criticism is based upon a misunderstanding, because if hon. Members will look at the introductory paragraph they will see it explained there that each statement on defence which has been published in successive years has dealt with some aspects of His Majesty's Government's general policy in defence methods, and in the second paragraph the introduction points out that This present statement is presented to Parliament at the same time as the introduction of the Defence Loans Bill, and it is appropriate therefore that the statement should deal with the cost of the defence programme. A previous White Paper dealt with the subject of Co-ordination of Defence, and I do not think there is very much more to be said upon that subject than was said then. There is, of course, one new feature about this particular aspect of defence, and that is that we have a new Minister. The hon. Member suggested that it was inappropriate that my Noble Friend, who is known to all the world as a most distinguished sailor, should be appointed to a position in which his duties are to co-ordinate the work not only of the Admiralty but of the other Defence Services as well. I do not think that that is a criticism which will be felt to be valid by the majority in this House or in the country.

I might remind the House that my Noble Friend served for some considerable time as chairman of the Chief of Staffs Committee, being senior officer on that committee. Quite apart therefore from anything else, his experience in that office gave him an opportunity of surveying defence problems as a whole which perhaps is unexampled and which in my judgment makes it peculiarly fitting that he should now be entrusted with the work of Co-ordination of Defence. I believe that every one will feel an added sense of security in the knowledge that we have a man with his particular gifts and his particular knowledge installed now in the very heart of our defence system, and able to give us the benefit of his special knowledge. [An Hon. Member: "Did you say that about his predecessor?"] could not say that, because the qualifications of Lord Chatfield are peculiar to himself.

Associated with my noble Friend is my right hon. Friend the Chancellor of the Duchy of Lancaster. If there were any objection to the appointment of my noble Friend as Minister for Co-ordination of Defence it is not that suggested by the hon. Member for Bishop Auckland, but the fact, which he cannot help, that my Noble Friend is a Member of the other House; and it was to correct that difficulty, to enable this House to feel that it was in close personal touch with the work of this Department, that I asked my right hon. Friend the Chancellor of the Duchy to represent him in this House, and also to take over the task of assisting him in his administrative duties.

The Committee will observe that the Chancellor of the Duchy is the Chairman of the Principal Supply Officers Committee. That does not mean that he is Minister of Supply. It was necessary to make that observation because sometimes I have felt that there was some confusion as to the duties of the Minister for Co-ordination of Defence. His duties in connection with supply are the duties of a co-ordinating Minister. That is not the same thing as a Minister who would himself be executively responsible for supply. But I say this further to the Committee on this occasion, that the immense advance in the output of munitions, and I would particularly say the output of aircraft and other supplies for the Air Ministry, I think shows the wisdom of the course the Government adopted in not appointing a Minister of Supply. The first result of such a change would undoubtedly be to cause a setback to that production just at the very time when it is in full swing, and when it is desirable that it should proceed still further without check.

I want now to say a few words about the financial aspect of these proposals. It is a curious thing that, while the hon. Member for Bishop Auckland said that in his opinion finance was the easiest part of the work of rearmament, my hon. Friend the Member for East Aberdeen (Mr. Boothby), a little later in the Debate, expressed the view that it was the most difficult part. I would add that for my part I rather agree with my hon. Friend the Member for East Aberdeen, and I wonder whether even now the Committee has grasped the full significance of the scale of the expenditure which is here being contemplated. A sum of £580,000,000 is to be spent in a single year upon the various aspects of defence. That is a figure which does not fall very far short of the whole of the National Debt at the beginning of the Great War, and, of course, that is by no means the end of the story.

The right hon. Gentleman the Member for East Edinburgh (Mr. Pethick-Lawrence), whom I do not see here today, made a very interesting speech last night, in the course of which he pointed out that, when we had spent the £350,000,000 which is the amount that the Chancellor of the Exchequer proposes to borrow next year, we should only have left, out of the £800,000,000 which my right hon. Friend is asking power to borrow, £250,000,000 to cover the last two years of the quinquennium. It will be seen, therefore, that, if we are going to spend £580,000,000 in a single year, £250,000,000 seems a meagre amount to cover the two years that remain, unless the work of rearmament is going to be reduced in a very drastic manner. The right hon. Gentleman suggested that in all probability my right hon. Friend would have to come to the House again and ask for a still further increase in borrowing powers before the last two years had elapsed. He may possibly be right, and, if he should be right, then, if we have to go on borrowing still further after the end of the five-year period, there would, of course, be very little significance in the finding of the sinking fund which was contemplated in the original proposal of the Government. But I cannot help looking even further than that, because, when this process of expansion of our defence forces has been finally completed, we shall not only have to look forward to the finding of the interest and sinking fund upon the amount which we have borrowed, but we shall also have to look forward to the annual cost of the maintenance of those increased forces. It would, of course, be rash at this time to venture upon a prophecy as to what figure the annual cost of maintenance may reach, but when we remember that the Chancellor of the Exchequer, for the purposes of his argument, took the amount which might be expected to be received from revenue next year at £230,000,000, one cannot help wondering whether the annual cost of maintenance of this increased armament, together with the cost of interest and sinking fund, may not be more than it is possible to extract from the taxpayers of this country out of current revenue. That is a serious prospect, to which no one, I think, can look forward with a light heart.

I am not now going to suggest what the solution of such a problem may be, but I want to make two observations upon it. The first is this: Does it not show up the terrible self-delusion of those who argue that, if we now spend so freely, it cannot hurt us to add a few tens of millions to our annual expenditure, even if those tens of millions produce no return whatever? My second observation is that in my view it would be criminal to allow the situation to go on developing as it has been developing without making some determined effort to put a stop to it. I listened yesterday to a very eloquent, indeed impassioned speech by the hon. Member for Burslem (Mr. MacLaren). He spoke with great sincerity, which I think appealed strongly to all those who heard it. He begged us not to allow people to slip down this slope like Gadarene swine, and suggested that the leaders of nations ought here and now to call a conference to consider whether the time had not come to agree upon disarmament. If I could believe that such a conference would produce an effective result at this moment—[Hon. Members: "Have a try."]—I would not hesitate to call it. But a conference that failed would be worse than no conference. I feel that, before it is possible to anticipate success from such a conference, we must be sure that those who came to it would come with good will and with a determination to produce the desired result. I do not feel that we have sufficient confidence established yet to make that conference a practical proposition at this moment.

Mr. Maxton

Will the Prime Minister allow me to interrupt him for a moment? I am keenly interested in this part of his speech. He says that no conference would be worth having unless there was a spirit of good will among those who attended it; but were those conditions present when he went to Berchtesgaden, Godesberg and Munich?

The Prime Minister

Yes, Sir; I think that those who went to the conference at Munich went there with the intention of making that conference succeed. [Interruption.] That was the only conference. If I felt the same confidence that a conference for disarmament would come to a satisfactory conclusion now, I should be the first to advocate it. But, as I say, I think we have to be a little further advanced in confidence before the time for such a conference has arrived. Perhaps it would not be a bad thing if we ourselves were to show a little more confidence, and not to allow ourselves to believe every tale that comes to us about the aggressive intentions of others. I am not sure that hon. Members realise how this attitude of suspicion is parallelled elsewhere. [Interruption.]

Mr. David Grenfell

Were not our suspicions of the German and Italian designs at Munich well founded?

The Prime Minister

I am not making any accusations against any hon. Member; I am merely trying to make an appeal to the House as a whole. I was going on to say that I had sometimes been reproached that I have accused my political opponents of warmongering. I have never thought that my political opponents wanted to go to war. I have thought that the policy which they seemed to be advocating was one which was likely to lead to war, but I do not believe for one moment that, if they occupied the places which my friends and I occupy here now, they would ever think of beginning a preventive war against some other country. Not even my right hon. Friend the Member for Epping (Mr. Churchill), who is Bogy No. 1 in some parts of Europe, has ever thought it would be wise for us as a Government to begin a preventive war against some other country. Our armaments, vast as they are, are armaments for defence, and for defence alone, and if it be true that others have no more intention of aggression than we have, well, then the conclusion that we must come to is that we are all piling up these ruinous armaments under a misunderstanding. I am very much inclined to believe that there is a great deal of truth in that. I would like to remind the Committee of some words used by the late Lord Grey of Fallodon in his book, "Twenty-Five Years," when he said: Each Government, while resenting any suggestion that its own measures are anything more than precautions for defence, regards similar measures of another Government as a preparation for attack. Fear begets suspicion and mistrust and evil imaginings of all sorts, till each Government feels it would be criminal and a betrayal of its own country not to take every precaution, while every Government regards every precaution of every other Government as evidence of hostile intent. That seems to me to be very much the situation in which we are finding ourselves to-day, so, while I cannot consent that we should relax our armaments in any degree till we can do so by general agreement with others to do the same, I do say that I feel it our duty, the duty of this Government in particular, to watch for every opportunity that may come to try and persuade other Governments of the folly of the course that we are all pursuing, and to induce them to put an end to a situation which, if it is persisted in, must bring bankruptcy to every country in Europe.

4.34 p.m.

Mr. Attlee

The Prime Minister started his speech in a mood of what I can only call the most unwarrantable complacency. He seemed to think that there was in this country and in this House a general satisfaction with the Government, as to its policy and the situation in which it has placed this country, as to its finance, and as to its defence proposals. I think he is entirely mistaken, and I am quite sure that if he had listened to the speech of my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) last night, he would have been assured that there is on this side the gravest discontent. He went on in the spirit of what I can only describe as the most brazen effrontery. He said that we have no word to-day of collective security. Well, it is his Government that has killed collective security, and these millions that we are being asked to pay now are the price that we are paying for that. "When history comes to be written," said the right hon. Gentleman. Well, the history will not start with Munich. It will not start even with Abyssinia. It will start long before that, and the Chancellor of the Exchequer will figure prominently in the gloomy record.

The right hon. Gentleman the Prime Minister comes down now and talks of appeasement and disarmament. If he had only shown that enthusiasm seven years ago! We have had, with two or three years' interval, something like 20 years of Tory Government, and when was there any appeasement then? Appeasement only came when the right hon. Gentleman began to get frightened, and disarmament only comes now. If only he had had that enthusiasm for disarmament when there was a Disarmament Conference! The right hon. Gentleman says now that we cannot have one, because he does not know whether it will be a success. If he had only thrown himself into the Disarmament Conference then, we should not be facing the position that we are facing to-day; and if there is an acceptance of the need for armaments to-day, it is not due to satisfaction with the present Government. It is due to apprehension at the position in which this country has been placed, in which the world has been placed.

I must correct the right hon. Gentleman's history in one respect. He said that at the time when there was collective security only this country moved a ship or a gun in its defence, and that no other country responded. He has forgotten what was said at the time. He has forgotten that it was expressly stated by the Government that they did not move ships or guns for collective security, but that they were only certain precautions for the defence of Egypt. He has forgotten that no other nation was asked to move a ship or a gun. He has forgotten the whole of those events, but the country has not forgotten, because these are still the people who came forward in defence of collective security and ran away when it was no question of war, but when it was a question of the imposition of sanctions; and I must say I think it is rather disgusting, the right hon. Gentleman triumphing at the end of the League, triumphing at the destruction of collective security, rejoicing in the failure of that great enterprise, and then trying to put sob stuff over this House. These armaments are the measure of the failure of the right hon. Gentleman, not of his success. Then the right hon. Gentleman comes forward and says that peace will never be imposed by force. Peace was imposed by force at Munich. Does the right hon. Gentleman deny that? He knows that it was not argument, or rights, or justice to minorities at Munich; it was the threat of force. And what are we piling up these armaments for now, if peace cannot be brought about by force? He tells us they are to preserve peace. The right hon. Gentleman had better think again before he puts that kind of stuff across this House.

But I am not intending to be led to-day into a discussion of foreign policy. [Hon. Members: "Oh!"] My hon. Friend who opened this Debate expressly said so, because it is a Debate on finance and on defence. It is the right hon. Gentleman himself who has tried to divert this into a foreign affairs Debate. This is a matter of dealing with the Defence White Paper. The Committee and the country are facing the expenditure of immense sums. I am bound to say that the right hon. Gentleman, whatever his complacency at the start of his speech, had got pretty gloomy by the end of it. He took us back to Bleak House all right. The Chancellor of the Exchequer was not very encouraging with regard to finance, but the Prime Minister dotted his it's and crossed his it's, because this borrowing is not only necessary to provide the new capital equipment, but it will be necessary if we are to meet merely the great upkeep of these immense armaments. At one time we heard that this was a five years programme and that at the end of that time something different was going to happen. Now we are shown no end to the piling up of these insensate armaments.

This House has the duty of seeing that if these sums are to be expended, they are expended efficiently and economically. This is the fifth White Paper on defence. The first one laid down the role of the various services at considerable length. I criticised it at the time as being essentially not one defence plan but three defence plans, but that is the basis of the whole of this armaments programme, and the role of these services was laid down before the Abyssinian adventure and before there was extensive rearmament in Germany, and at that time conditions were very different from those that obtain to-day. The second White Paper was after the retreat from the League, and a full review of conditions was made. It was at that time, in 1936, that our general defence scheme was laid down. The statement was made there that a special Sub-committee of the Committee of Imperial Defence—the permanent Secretary to the Treasury, the permanent Undersecretary to the Foreign Office, and the Chiefs of Staff of the three Defence Services—made detailed plans. Those detailed plans came before the Defence Policy and Requirements Committee of the Cabinet, presided over by the Prime Minister, and after that the plans were approved by the Cabinet. That is the basis on which our defences are organised to-day. In White Papers Numbers 3and 4 there was no word of conditions. There were merely reports of progress or lack of progress, and now, in this fifth White Paper, again we have only reports of progress.

The first question that I want to put to the Government is, Has there been any review of our Defence programme in the light of the new situation? After all, during the last year events of vast importance have happened, events which I say must needs affect our defences, not only quantitatively, but qualitatively. It depends on what the condition of affairs is as to what kind of armaments and defences we need to provide. We had a crisis. The country was brought to the verge of war—the result of the foreign policy of the Prime Minister. The country was brought to the verge of war. It was so close to it that it was some kind of a test of our preparedness, and we found in many respects gross unpreparedness. The only reference in the White Paper to that crisis is in regard to Civil Defence. It is right that that should be referred to, because it is just there that the grossest deficiencies were made plain in regard to Civil Defence. It is obvious that it took that crisis to make the Government realise the importance of Civil Defence. The expenditure on Civil Defence in 1937 amounted to £3,500,000; in 1938, to £9,250,000; and in 1939, after the crisis, to £51,000,000, besides enormous expenditure that will have to be undertaken by local authorities, businesses and private persons. It was only after the crisis and after the deficiencies were shown that we had a special Minister appointed to deal with Civil Defence. Yet the need for this defence was realised in 1934. We find it in the first White Paper issued. It occurred to the author of that White Paper, signed "J. R. M." He said: His Majesty's Government intend to develop simultaneously with the defensive preparations of the country's armed forces, pre-cautionary measures designed specifically for the protection of the civil population. Revised in 1934, found wanting in 1938 and still unprepared to-day. Despite all the exertions of the Lord Privy Seal there is still a vast amount of work to do. There are still decisions to be made and the country is waiting for the decisions, such as the decisions in regard to dug-outs and the rest of it.

I suppose there has been at least one good effect of the crisis and that is that everyone in the country now realises that the safety of the people of these islands from air attack and the safety of these islands in all our operations whether in the air, military or naval, stands first in the line of priorities for defence. It is quite clear that that was not appreciated by the committees that drew up our defence plans. There were inquiries by these committees, by the Committee of Imperial Defence and the Cabinet, but it never struck them that civil defence was high in the order of priorities. Why not? I suggest that it was because there was no one charged with considering defence as a whole. The committee was dominated by the three Chiefs of Staff, who concerned themselves with their own Departments. Then we had a Minister for the Co-ordination of Defence appointed. He brought a fresh, almost a virgin, mind to the problem. He was appointed in 1936, but he did not realise during all that time the priority of civil defence.

High, too, in the order of priorities should have been anti-aircraft guns. Why was not that done? There, again, the Army was thinking in terms of divisions, guns, infantry, tanks and the rest of it, and the Air Force was thinking in terms of aerial attack. The result was that this vital service of anti-aircraft guns was neglected. We have some encouraging words now, namely, that the shortage revealed in the crisis is being made up; but we have just learned from Sir Charles Harington, confirmed by a question to-day, that there was a great shortage of anti-aircraft guns at Gibraltar. Well, there was a threat in the Mediterranean just before these committees sat. They met, so to speak, under the shadow of the Abyssinian adventure and the threat in the Mediterranean, and after three years we still find the problem is neglected. We have had a reply from the Minister, who said that it had been relatively neglected. I was not sure whether the term "relatively" applied in comparison with what was required or in comparison with neglect of other places that should be defended. Perhaps the Minister will tell us that when he replies.

I make this point for two purposes, one because of the need for a constant review of defence plans, and the other because there is need still and, there has been need all these years, for a real Ministry of Defence. I return to that point again. Let us consider once more the events of the past year which find no place whatever in the White Paper. We had the occupation of Austria, and the loss of the Czecho-Slovakian defences. We have had the balance of force on the Continent of Europe violently upset, and a vitally strong point of democracy has gone. An efficient army, an efficient air force and great munitions have gone. They have been eliminated. It may be that they have been transferred to another side. Numbers of men, munitions, and resources have been added to the strength of Germany. Great forces that were hitherto contained by the existence of Czecho-Slovakia have been released. That is a profound alteration in the whole military situation in Europe.

Then we have had the threatening attitude of Italy to France. I hope that I may refer to that threatening attitude. There have been numbers of threats in regard to France's colonial possessions. Perhaps I shall not be accused of imputing motives if I suggest that there is an indication that some Italians would like some of France's territory. That, necessarily, has made France nervous of her South-Eastern frontier and her sea communications. Then we have had the arrival on the Southern frontier of France of a Fascist Power closely allied to the Axis hub; again threatening aggression to her sea and land defences. We have had trouble in the last few days in Syria, and I might add that there was the Japanese threat to France's possessions in the Far East. There is the growth of Fascist power in Spain, which constitutes a potential threat and a very serious threat to the sea communications of the British Empire, both in the Mediter- ranean and the Atlantic. It is all very well for the Prime Minister to say that he believes that General Franco will free himself from his associates, but we cannot gamble with the defences of this country on the basis of the Prime Minister's belief in the word of a dictator. Then we had the promise about Libya, and we had the value of that promise exposed at Question Time the other day.

We all hope that these threats will not materialise, but we have to take them into consideration. The veriest amateur in strategy could see that the whole position of Europe during the last year has swung heavily against the security of France. The Prime Minister the other day gave us more explicitly than ever before a pledge that we are standing by France— a French alliance. Therefore, whatever is inimical to French security is inimical to our own. I would ask, what have been the repercussions of all these things on the Government's defence plans? They cannot have left them absolutely unchanged. These plans date back to the time, that much despised time, of collective security. The defence of a country standing in with 52 others is very different from that of one reduced to almost isolation, with only one effective ally.

I should like to ask whether we can have some information as to whether in the various conversations that have been taking place there has been any discussion with the Union of Soviet Socialist Republics. I think we consult with the Union of Soviet Socialist Republics only when things are extremely dangerous, and we cold-shoulder them when they are not. We hear of a trade mission to Russia. I wonder whether anything has been done to consult with that great country in regard to trying to bring more stability into the world situation. I should like, looking at these changes, to ask some questions of the right hon. Gentleman who is to reply. We had a rule of the Army laid down a good many years ago, and I should like to ask whether these events have made any difference with regard to what kind of an effort this country may be expected to put forward on land in the event of war. There was a good deal of discussion about an expeditionary force the other night. I do not ask that we should have all the Government's plans laid before us, but if we are to judge in this House as to the allocation of money between the different services and the amount of the expenditure, we must have some general idea as to what the commitments of the Government are.

I would also ask in regard to naval needs. We are told in the White Paper that the needs of naval construction were fully set out in 1937; but the naval situation has been altered very gravely by the events of the last few years. If a hostile Power holds Spain, part of North Africa, the Balearics, the Canaries, it may be that you will have to put more resources into escort ships than capital ships. I see need of an increase in both categories. I want to know whether there has been a review of the whole position in the light of the new situation.

Then I would ask a question in regard to food storage. Food storage was advocated in this House for a long time without any effect. I understand that the Government eventually accepted it, but it is no good accepting a policy unless you mean to work on it whole heartedly. I find that last year £8,500,000 was provided and this year £5,000,000 for the storage of food, fertilisers and petroleum. That will not take us very far. That is about 5s. per head of the population. That is not a food storage policy; it is playing with it. The question of food storage is one which interests us, because it is the most peaceful form of defence there could possibly be. It is one of the most economical and the least aggressive forms of defence. Therefore, your food storage policy must have some effect on your naval construction. Last year I commented in some detail on the White Paper in regard to the revelations we had throughout that White Paper of the delays in the provision of almost every kind of defence equipment. I still see the same dilatory procedure.

I would call attention to the fact that in July, 1937, it was decided to transfer the administrative control of the Fleet Air Arm to the Admiralty. A year and a half have gone and that is still proceeding. After two years perhaps the Air Arm will be transferred. I cannot understand this enormous loss of time between coming to a decision and carrying it out. The White Paper is full of the kind of phrases, that we on this side of the House have learned to distrust—words like "substantial deliveries," and "Things are coming forward very well now." We had a great deal of that from the Secretary of State for War. We never seem to get any completion. I am not going into detail. We had detailed discussion on the Air Force, and much of what we said in the summer proved to be justified. The present Air Minister has made changes, and I am glad that he has made some of them, but I should not like it to be thought that, while we admit that progress has been made, we are yet satisfied that all is well in that Department of our defences. In reviewing the history of the armaments programme I am convinced that the obstinate refusal of the Government, maintained year after year, to put in any proper direction, either in the sphere of strategy or supply, has been wasteful and dangerous. The Government were warned again and again from both sides of the House. The problem has never been envisaged in its true dimensions. It has never really been considered from the point of view of efficient administration.

Let me glance for a moment at the personnel which has been running our defences. In the last four years we have had three Prime Ministers, four Secretaries of State for War, three Secretaries of State for Air, four First Lords, three co-ordinators, shoals of Under-Secretaries, the Paymaster-General, and the Lord Privy Seal, to say nothing of the committee of businessmen, and behind them we have regiments of committees and platoons of sub-committees. The one thing we do not get is any real continuity or any real direction, but at any given time everything is always all right, and every Minister is stoutly defended to the bitter end. It is a remarkable variety of talent that has been employed by the Prime Minister, and we are often hard put to it to understand exactly the qualifications of any given Minister for any given post.

I have great admiration for the high qualities of Lord Chatfield and I have respect for the qualities of the Dominions Secretary, but I find it a little difficult to see how their talents, so very different, suit them for one and the same job. I should like to know rather more about the allocation of duties between the Chancellor of the Duchy of Lancaster and the Minister for Co-ordination of Defence, because we have now two co-ordinators, and I am inclined to ask quis co-ordinat ipsos co-ordinatores—who will co-ordinate the co-ordinators? It can hardly be the Prime Minister, because, besides being Prime Minister, he is de facto,if not de jure, the Foreign Secretary. I have held for long and urged for many years that we need a Ministry of Defence. The strongest argument that you can find for it is in the facts of the situation, the fact that those things that come first did not come first in the organisation of defence. I say again that we need a proper organisation of supply. That, too, we have debated pretty often, and the Government has taken the line that the system is working all right. The Prime Minister put up again the case that has been put up any time during all these years, "You must not interfere because you will upset what is going on so wonderfully." A few years pass and we find that everything is going very badly. It does not seem to occur to them that possibly that is due to the fact that they would not take the right step.

The case against the present system is shown by the deficiencies and by the fact that we were, as a matter of fact, caught unprepared. I entirely agree with the hon. Member for Mossley (Mr. Hopkinson). There was no reason why this country, with its resources, should have been caught unprepared. The more one examines into the question, the more one is struck by the length of time that it takes to translate any decision into action. There are grave faults of administration, and not only in the Air Force. You find the same thing in the War Office, where extra people are put in and merely put an extra week or two in the time lag between decision and action. The examination that we have had into the Air Ministry shows grave deficiencies of organisation. It is not put right by putting Sir Charles Bruce-Gardner into a special position. It is not put right by having a committee of businessmen. The fact is that the Ministers in charge of the fighting Services have never been able to deal with this supply question. It is one of the reasons for their failure. Even if they had been supermen I doubt whether they would have got away with it. These frequent changes show how impossible a task it is to expect people to run the fighting Services and to run supply. The kind of reply that is given every time to any demand for a Ministry of Supply is precisely the same kind of reply that was given during the War when they wanted a Ministry of Munitions. We must not change the system, but you can change Ministers as often as you like. It does not increase one's respect for the ability of Ministers.

Let me deal with a further point, the question of the cost. When we get into these astronomical figures, as the Prime Minister said, an odd million here or there does not very much matter, and whether it is an odd million or two spent for nothing, or an odd million or two going into the pockets of profiteers, the Government shelter themselves behind the report of the Estimates Committee. I think the hon. Member for South Shields (Mr. Ede) was a member of it. It showed clearly that it is no real defence to the Ministry at all. I think the hon. Member for Mossley put the facts in their true light, and I do not think he was at all effectively answered by the Financial Secretary to the Treasury. It was the same kind of answer that we always get from Ministers now. Hon. Members the other day put up the fact that there was an Army of 2,000,000 unemployed. The Minister of Labour got up and played about with figures and made a great noise. He told us there could not be an army of unemployed because the personnel was always changing. We had an army in France for four years. The personnel was always changing, but that did not alter the fact that there were so many million men in France, and the Minister of Labour's figures do not answer the fact that at any given time there are actually or nearly 2,000,000 unemployed. In exactly the same way all the eloquence of the Financial Secretary did not do away with the fact that large fortunes are being made out of munitions at a time of the country's need. That has a very grave effect on the moral of our people, quite apart from the question of the financial structure of the country.

I want to turn to another matter, the question of man power. The old saying was, "We have the men, the guns and the money, too," but the money and the guns are not much good without the men. We have to realise that in this world of competitive armaments, into which we have been brought, you have this competition in man power. You have two European States which have a predomi- nant man power—Russia and Germany. You have France and Britain with farfewer resources. The fact that our resources in men are smaller than those in other States only makes it more important that we should utilise that man power, and here is the failure of the Government, that they have not, in this immense expenditure on armaments, taken up the slack of unemployment. All that they have really done is to alter the nature of the employment of the people already in employment. That is a terrible loss to the country, and all the time they have been working to pile up material armaments, there is a great deal of our man power wasted and decaying through neglect. Equally important is the physical fitness of our people. That, again, is a matter that has been neglected. But there is one thing more important than any of these physical elements in defence and that is the spirit of the nation. I believe the spirit of our people is as high as it ever was if we only had a Government which could evoke it.

It is idle for the right hon. Gentleman to contend, as he did in a spirit of complacency at the beginning of his speech, that everyone is satisfied. There is widespread dismay throughout the country, because people believe that the Prime Minister in his policy throughout has sacrificed moral principles of the utmost importance. It does not mean a demand that we should go to war. It is a demand that he should be on the side of freedom and democracy, and the feeling in the country is that the Prime Minister is always on the side of aggression and wrong and dictatorship. [Interruption.] It is no good hon. Members deceiving themselves. There are thousands of people, especially young people—[Interruption.] I am not referring to the Noble Lady—there are many young people who wish to bear their part in the defence of the country who are discouraged and hesitating because they do not believe that the present Government stands for the real things for which this country ought to stand. I should like to recall, when we consider defence, that we in this country defend something more than material things. We have to defend spiritual things, and you will never get the kind of support that you want in these days for any defence programme unless you have a Government which can make the people realise that we stand for something beyond mere materialism, for some moral purpose in the world.

We move our reduction, not because we do not think that in these circumstances we have to make this expenditure, but because we say that the expenditure is itself a condemnation of the policy pursued by the Government. We do not believe that their financial measures are sound, or that their defence measures are sound, and we shall register our vote in the Lobby because the Government have neither ensured a peaceful world nor taken adequate steps to defend us in the dangerous world that they have created.

5.16 p.m.

Mr. Churchill

I certainly have not come down to the Committee this afternoon for the purpose of making a controversial speech, but rather to touch upon some of the broader and completely non-party aspects which are presented by this Debate upon the loan. But I must say that I think my right hon. Friend the Prime Minister tried not only the Opposition but others as well rather high by the tone of his remarks about the failure of the League of Nations and collective security. [Interruption.] I do hope the Noble Lady the Member for the Sutton Division of Plymouth (Viscountess Astor) will refrain from interrupting. After all, the League of Nations and collective security were not ideals which were solely the province of the Parliamentary Opposition. They were not doctrines pressed upon the National Government, and repudiated by the National Government, who are now vindicated by the evident failure which has overtaken these hopes. It was the other way round. It was the National Government who adopted these principles and popularised them, gathered to them the whole force of this country, and fought the election upon them. The Government's General Election manifesto contains this sentence, among many others: The League of Nations will remain, as heretofore, the keystone of British policy. The Foreign Secretary of those days, speaking a little while before, in July, said: The more I look at the future prospect, the more I am sure that a system of collective security is essential to peace and stability, and the League of Nations best provides the necessary machinery. And in September the attitude of His Majesty's Government had been one of unwavering fidelity to the League and all it stands for. The ideas enshrined in the Covenant, and in particular the aspiration to establish the rule of law in international affairs … have become a part of our national conscience. We may all deplore the unhappy and turbulent events which have swept much before us, but I hope my right hon. Friend will realise the very great share that he and all who sit with him have had in presenting these ideals to the country and in gaining the support for them of great numbers in the country who are absolutely loyal in their desire to support policies which he puts forward, and I hope he will make it clear that it was in no spirit of airy satisfaction that he referred to the undoubted downfall of so many hopes and ideals which the Government had encouraged.

However, I did not come to chide, because my first desire is to congratulate the right hon. Gentleman the Chancellor of the Exchequer upon the way in which he is handling the immense task which has descended upon him. This is no time for financial pedantry. The period through which we are passing is not an ordinary period of peace. It is a period of what we may call bloodless war. We all hope and pray that this war will remain bloodless, and that, after an interval as short as possible, real peace will emerge. But in this present midway condition, quite unparalleled in our history, it is essential to the realisation of our hopes that the full strength of Britain, actual and potential, should be used to the highest advantage; and the Chancellor of the Exchequer is, therefore, quite right to use the powerful heavy weapon of British credit, which has hitherto been so carefully kept bright and clean, as far as he can without blunting or breaking it. Of the extent to which he can use it, I must say that he and the Treasury, with their many varied sources of information and the great apparatus at their disposal, are certainly the best judges.

Moreover, the Government have no incentive, no unworthy incentive, to take more from loan than from credit, to trespass unduly upon borrowing powers, because it is perfectly well known that whatever new additional taxation they think necessary will be supported by an overwhelming majority in the House, and will be paid punctually by the taxpayers in the country. Therefore, they are under no political pressure to use the credit instrument further than their prudence and considerations of practical common sense justify. Although it is very difficult to form an independent opinion, without expert information, upon so complicated a matter as the public credit at the present time, I must say that it seems to me that the right balance has been struck by the Chancellor of the Exchequer as between revenue and loan expenditure in defence, and certainly the presentation and general acceptance of this massive Loan Bill, the Resolution for which we are now discussing, has added to confidence at home and is a factor on the side of stability abroad.

Whenever we speak of "bloodless war" it must not be supposed that it is not attended in every country in this anxious, melancholy time by strain, by loss, and, in some countries, by a very severe degree of privation and suffering among the mass of the population. Moreover, the bloodless war is becoming intensified. There is hardly a day when the papers do not show that it be becoming intensified. The strains resulting from it will in this year, still more if it is prolonged, test not only the financial and economic strength of nations but the health of their institutions and the social structure of their civilisation. It is certainly not an hour in which we should indulge in any vainglorious boastings. Nevertheless, it is right to say, as the Chancellor of the Exchequer indicated, with proper modesty but undoubted truth, that probably we can stand this strain, which may be prolonged, better than any other community in the world. That is from every point of view, not merely because of the financial and economic strength of the country but from the association of the whole people, through Parliament, in the processes of government. It is a great comfort and source of additional security that both the Opposition parties, in spite of many grievous differences which exist, and in spite of the many searching criticisms which they may make, and which ought to be made, are nevertheless not in any way challeging the principle of these exceptional measures which the Government feel it their duty to propose. On the contrary, the only political risk which Ministers run is if they are thought to have proposed too little, or if they are reproached with not having proposed it soon enough.

It is evident that the coming financial year will see a very great accretion to our defensive strength. For the first time, the great aircraft production factories will be earning sums upon a scale which has hitherto been attained only in Germany—and it should not be forgotten that most of them were created under the administration of a Minister who is no longer in office, Lord Swinton. I do not in the slightest degree detract from the keenness and energy which the new Minister has imparted, but as so often happens, one sows and another reaps. I suppose we shall, in this coming year, be spending what Germany has been spending for a number of years past. We might just face that fact, which is in one way encouraging and in another way casts a grave tinge upon one's thoughts. But even now, in this present time, there is a great new flow of defensive equipment in every conceivable field, a flow to be measured by the immense sums which the great factories will soon be earning and which will be recorded when the new weapons reach the hands of the fighting troops.

I do not propose to dwell unduly today, although I should be entitled to do so, on the fact, now generally admitted, that if we had started earlier and planned on a bigger scale and executed these plans with more vigour, and if we could have reached in March, 1937, or even in March, 1938, the position that we shall occupy in March,1939, we might even now be at the top of the hill. At any rate, we should have a much easier and surer prospect opened before us. Unhappily, everything everywhere at the present time moves forward together, and the measures which a few years ago would have headed off the evil, stopped it, are now themselves out of date. Much as we abhor the waste, folly and danger of the world armaments race, much as we dread the climax to which it seems to tend unless interrupted by other events, there is no part of this House, and there is no part of this country, where there will be found any desire to slacken our efforts. On the contrary, the whole desire of the nation is not only to support, but to spur the Government in their exertions. There is, however, one consolatory reflection which I will make under all reserves. I do not want to complicate any argument I may hold on some future occasion, but I do feel that it is better that a Government should be accused of holding back and the nation should seem to be pressing forward in matters of defence than that it should be the other way round, that the Government should be trying vainly to drag sacrifices out of a sluggish or reluctant nation. Undoubtedly, the Prime Minister has only to ask from the nation whatever is thought necessary for the safety of the country, and the very fact of his unchallengeable association with ideas of peace, which he is always ready to face in that cause, will win him immediate allegiance. I make that point.

The very vastness and variety of British armaments production now coming into being renders all the more necessary the proper and efficient co-ordination of Defence and of Supply. Once again I appeal to my right hon. Friend to appoint a Minister of Supply, and to group under him, piece by piece, section by section, and step by step, as may be found convenient, the immense complicated system, or hotch-potch, as some may think, of committees and sub-departments which are now involved in this gigantic task. We need not argue about styles and titles, or about a particular word or phrase which has a prejudicial association connected with it. What is essential is that there should be one Minister able to give executive directions through the whole field of munitions production, or almost the whole field, because there is a special reservation to be made with regard to the warship building of the Admiralty. Such a Minister must be in the House of Commons, because it is in the House of Commons that all questions connected with the organisation of industry, the restraint of profiteering, and the expansion or dilution of labour naturally lie. Here it is where the Members are who know about these things, and they must have constant access to the Ministers whose decisions are affected. This wide group of questions has nothing whatever to do with those ranges of strategic policy with which the Minister for the Co-ordination of Defence is charged.

I was very glad to read in the newspapers of Lord Chatfield's appointment. I see no reason why the broad, general views of an eminent sailor should not be at least as sound in this Sphere as those of an eminent lawyer. Lest my right hon. Friend the Chancellor of the Duchy should think that I am casting a stone at him, let me assure him that I have never looked upon him as an eminent lawyer. I like to look upon him as a practical gunner and artilleryman. The discharge of his present duties begins upon a background of practical experience gained in the field. There is no reason to doubt that Lord Chatfield brings to his task ability and experience of the highest order, and there is not the slightest reason why the Minister for the Co-ordination of Defence should not be in the House of Lords, especially at a time like this when we have the Prime Minister in the House of Commons. But the whole question of Supply is a House of Commons affair, and you will rind that Lord Chatfield will be hampered and embarrassed in his task if he allows himself to be burdened with the totally different functions reserved for a. Minister of Supply.

The table before which the Minister for the Co-ordination of Defence ought to be seated should be a table with four legs and not a table with three legs. The Navy, the Army, the Air and the Munitions Supply are the four spheres and the four partners whose action it should be his duty to concert. He should not be the actual head of any one of these spheres. Here would be a practical, a natural and harmonious organisation. It would enable the Minister for the Co-ordination of Defence, after hearing all the claims of the three Fighting Forces, and after hearing from the Minister of Supply what possibilities were open in his field, to assign, both in quantity and in quality, the necessary priorities which should be given to the different arms, the different processes and the different weapons, the manufacture of which is proceeding. All these processes would best be related not only to the general war policy of the country as known to the Minister of Supply in charge, but also related to the available reserves of the country which cannot at any stage be separated from strategy or war policy at the present time.

It would then be for the Minister of Supply to deliver the goods, and I am quite certain that would be quite a whole-time job for any man, however young and able he might be. I urge my right hon. Friend the Prime Minister to reconsider this matter. He gets nearer to it with every alteration which is made, in the functions of the Duchy and so forth. We get nearer and nearer to it. Why not take the last step? I really do not know what new argument to use to melt the heart of my right hon. Friend. I believe there are overwhelming arguments. I believe that expert official opinion is almost ovenvhelmingly in favour of one man having the power of giving direction over this field, but the argument that I will use—my last hope—appeals to my right hon. Friend's personal amiability. Will he not at least relieve me of the painful feeling of which I cannot rid myself, that we should, long ago, have had a Ministry of Supply if only I had not advocated it?

Let me further address myself to the main desire of all of us, wherever we sit, that this bloodless war should not suddenly explode into a bloody war. That is the task upon which all our hearts are set. No doubt there are different methods which some would advocate in this quarter or in that, but I believe that the overwhelming weight of British opinion, and of American opinion, which is now so potent a factor for averting war, accepts the position that the best chance of preserving peace is to accumulate deterrents against aggression. This Money Resolution of £800,000,000 which we are now considering is one deterrent. What is happening across the Atlantic is another, what is happening in France is another, what is happening in the East of Europe is another. But the aim should be to assemble and gather together, if possible, overwhelming deterrents, and then form a basis of strength and not of weakness, to attempt a general settlement followed by a general disarmament, which is also the common aim in all parts of the House. We had that position of overwhelming strength after the War was over, and we failed to use it, and we had it even seven or eight years ago, and it may be long before were gain it, but the regaining of the strength must be a preliminary to a settlement which would enable a broad measure of disarmament to set the world free from the shackles with which it is being loaded year by year. That has always been the constant theme I have tried to put to the House in the six years I have been addressing it upon the subject.

I therefore welcomed ardently the declaration which my right hon. Friend the Prime Minister made a fortnight ago of the complete solidarity between the British Empire and the French Republic in the event of an act of unprovoked aggression against either. That declaration has, I gather, not in any way been deprecated by any of the self-governing Dominions. It certainly was cordially hailed throughout the United States. I do not intend to pursue this argument into the field of foreign policy, because we are confining ourselves to the defence aspect this afternoon, but I wish to point out that the declaration which the Prime Minister made of our solidarity with France is a major deterrent upon violent action at a time when pressures are inevitably rising, and must inevitably continue for some time to rise. No doubt the fact that the Prime Minister is known by all to be a sincere and untiring worker in the cause of peace made it all the more widely acceptable because it has stripped it of the slightest suspicion that it should be a part of any aggressive, ambitious or Imperialistic design between the two powers concerned.

But why should it stop there? It is now six months since assurances were given in this House that thorough staff arrangements with the French Republic for combined defensive action would be made. No doubt many conversations have taken place, but when I was in France a little while ago it seemed to me, from what I heard, that they had hitherto moved far too slowly, and now that we have made a public declaration in such sweeping terms, and are so profoundly committed, it would be the height of improvidence not to have every technical detail arranged to the best advantage between the expert authorities. Of course any arrangement between expert authorities affects a decision which alone can be taken by Governments. They merely enable these decisions, should opportunity and occasion arise, to be armed with carefully worked out plans.

Before the War we had detailed arrangements but we had no commitments. Now, we have the fullest commitment, and it would be most wrong not to accompany it by the most thorough and prompt arrangements. There is something to be said, and much is said from time to time in some organs and guidance, for the advantage of having neither commitments nor arrangements, but to have commitments without arrangements and without complete arrangements, is surely to have the worst of both worlds. I hope that perhaps some reassurance on this point may be given this evening by the Chancellor of the Duchy, if the Prime Minister would permit him, in the course of his winding-up speech.

This question of arrangements leads me to another grave but unavoidable subject, assuming the House is going to face the facts of the situation in which we are and to which we may be moving. Suppose that our hopes of peace and a settlement are frustrated and that France and England become the victims of unprovoked aggression, what is the character of the contribution which each will make to the common safety and, more than that, to the common survival, for that is what would be at stake? There is clearly only one answer to such a question as that. The British Empire, once engaged in a life and death struggle, supported by the conscience of its people, will hold nothing back from the common cause. I remember well that after Sir Edward Grey had made his speech on 3rd August, 1914, in this House, I was immediately approached by several most influential and eminent people, all in favour of a declaration of war, who urged that no British Expeditionary Army should in any circumstances be sent to the Continent and that British assistance should be confined to money and to the Fleet. These ideas, which had widespread countenance, were simply brushed aside as if they did not exist by the inexorable force of events and the overwhelming movement of national feeling. No one, once the honour of the country is engaged, would tolerate for a moment the insulting idea that one ally should do the paying and the other most of the dying.

I am absolutely sure, whatever may be said, whatever reluctance there may be to face the issues which have to be faced, that, if we should ever be engaged in another world war, which God forbid, Britain and the Empire would intervene not only with naval, air and financial power, but with the whole manhood of the British race and all the component parts of the King's Dominions throughout the Empire. If that be true and were made known beforehand, it would constitute another valuable deterrent against the very dangers which it is our chief desire to avoid. There would be no use at the present time in our trying to raise a large Army upon the continental model. That would be a matter of years. There may be many improvements which past experience will suggest, but what will happen should war unhappily break out is, in the main, what happened last time. The recruiting offices would be besieged by more than a million volunteers demanding to be armed and led to the front, wherever it is. We had upon our hands in those days for nearly two years hundreds of thousands of volunteers for whom there was no equipment, no cannon, not even rifles, and, as for the supply of munitions for so great a force, it had never even been dreamed of by anyone on any side in any Government office, even in the well-thought-out essential military arrangements which had been made.

Has it been thought out now? Has it been provided for now? Remember that should a new war come the men at home in this island will frequently see women and children, it may be their own, killed before their eyes by air bombing. Can you doubt for a moment what their reaction will be? The blood in our veins gives us the answer. The British people, exposed to such torture, would not demand peace, they would demand arms. That is the only reaction; it is the reaction which we have seen taking place in Barcelona. That is the reaction which will certainly take place if that cruel ordeal should come upon us. It seems to me that the production of munitions for an army should long ago have been undertaken upon a scale immensely greater than anything which the War Office have been allowed hitherto to contemplate, and it is another reason for the immediate appointment of a Minister of Supply. It is not a question of allowing plant and factories to come to full fruition, there is a need to provide, quite definitely, for the supply of munitions for very large forces which will be pressing themselves upon us should this hateful evil of war ever come upon us.

Moreover—to continue dealing with unpopular and unpalatable topics—we ought surely to have available in the first few months of war military forces larger than anything of which we have yet heard. We ought to have some statement on this subject. What is done with that force is another matter, but the forces which are being prepared should be known, as they are in respect of the strength of the Air Force and as they are in respect of the vessels of His Majesty's Fleet. I have mentioned before that by Christmas, 1914, no fewer than 14 British divisions, including two cavalry divisions, had actually been engaged. Where such a force should be employed is a matter to be concerted between allies, to be decided in the light of circumstances, which may never arise but which should be foreseen; that it should be ready, and that there should be behind it all the necessary supplies, ammunition factories, as well as those needed for a later expansion, cannot, I think, be denied. By making these arrangements and by showing that we have it in our power and in our will to make them, and that our people will support us in making them, we shall complete that series of deterrents upon which we may rely, not with absolute assurance but I think with a very valuable measure of hopeful confidence.

The burden of anxiety weighs heavily upon all of us in these days, but it is with a sense of relief that the House gives its support to this large financial measure. When we calculate the losses which are caused to enterprise, to trade and industry, by the uncertainty which overhangs all our affairs and those of so many other countries with whom we trade, the sums which seem so vast when read out from the Table are petty compared to the deprivation of the whole world of its right and power to move forward into a great age of production and expansion and the elevation of the standards of life and labour. We cannot grudge any sums necessary to reach security. We long for the day when the British people and other peaceful nations will be able to go about their business in a confident and tranquil spirit, without having to live in a state of suspense from month to month, living from hand to mouth, and looking to the radio or to the newspapers to find out what alterations in our own domestic affairs may have been wrought by some dictatorial speech delivered in other countries, some of whom we have succoured and some of whom we have defeated in the field.

5.55 P.m.

Mr. Mander

I thought the Prime Minister in his opening remarks was in a much too self-congratulatory mood when he assumed that all Members of the House and the people in the country were in agreement with what the Government are doing in the matter of National Defence. As to the sums asked for by the executive Government of the day, there is of course no doubt at all. We on these benches are always prepared to grant them willingly, although we may not be in agreement with the measures which the Government adopt. When it comes to a question of foreign policy it has already been made plain that there is a fundamental difference of opinion between the two sides of the House and, indeed, there is a difference of opinion on the other side of the House. That division of opinion must in some manner be bridged over, otherwise this country will never attain the safety and security which are necessary. With regard to the financial proposals now before the Committee, we agree to them, but we cannot pretend that we have thought for a moment that the finance is sound. I wonder what would have been said if a Labour Government had asked for power to borrow £800,000,000? We know well what would have happened.

It would seem impossible for this sort of thing to go on, but it will go on. The Prime Minister envisages two or three years ahead in which there will be immense borrowing. The Government are going to borrow this year, and clearly one of their objects is to avoid the imposition of a higher Income Tax or any striking impost because there is a General Election in view. If they are going to borrow for that purpose, they might just as well have reduced the Income Tax by 6d. or Is. in the £ by borrowing in order to obtain the same result. It would have been just as sound from a financial point of view as what they are actually proposing to do. I cannot help feeling that the whole of this vast expenditure would have been wholly unnecessary if the policies which have been advocated on this side of the House for some years past had been put into effect. We should have had lower taxation and money available for a higher old age pension for the people of the country. Instead of rearming in this great world race we should have been engaged upon a multilateral disarmament on an agreed plan, from which we should all benefit by peace and security. If there is one thing which the Financial Resolution makes clear it is the failure of the Government's policy of appeasement. The true and only test of appeasement will be when you get a disarmament conference in being. Until you get that it is clear that the Government have failed, and I think the Prime Minister made it quite clear in what he said to-day. It is obvious that the Government do not trust the words of the dictators with whom they have been in conference. They look to their deeds, and in that case I think they are perfectly right in taking this view of the situation.

One thing which struck me in reading through the White Paper was the absence of any reference to a reliance upon any support outside this island and the British Empire. It has been usual to assume that we should act in co-operation with others, but there is no reference to that in the White Paper. The Prime Minister about a month ago told us that we should count our blessings sometimes. They go so fast that we lose sight of them. The League of Nations was a blessing at the time of the last General Election, and an extremely successful blessing, but that has been knocked into an unconscious state by the National Government. Czecho-Slovakia has gone, too. I think the Government ought to make some statement as to what extent, in the event of war, they would rely upon the assistance of other nations. It is true that we have our obligations to Portugal, Egypt and Iraq. Do those countries represent the only support that we have in the world? I hope not.

I would like particularly to know whether the statement that was made officially by the Foreign Office on 28th September, 1938, that this country was prepared to stand with France and Russia in resistance to German aggression—I presume anywhere—still holds good to-day, and whether it is the policy of the Government to make use of the co-operation of other peace-loving States, which were certainly willing at that time, and I believe still are willing, to work with us? Unless we are given information of that sort, it will be left to us to assume that the Government are planning on a purely national basis, and are trying to plan our armaments so that this country can stand alone against the world. Of course, it would be absolutely fantastic and impossible for this country to do that. The British Empire is totally incapable of being defended on any such basis; yet I am afraid it is to this that we are rapidly being reduced.

I hope that some reply will be given to the questions that have been asked from many quarters as to the Government's intentions with regard to the sending of an expeditionary force to France in the event of war. I am not referring to the long-distance policy, for, as the right hon. Gentleman the Member for Epping (Mr. Churchill) said, in the event of a major war no doubt all sorts of things would be done which are not contemplated now. It is only right that the people of this country and the people of France should know—and I think it would be a good thing for the people of Germany to know—whether it is part of the Government's plan, at the present time, to send an expeditionary force to the Continent immediately on the outbreak of war. I want now to refer to the progress that is being made in air rearmament, and in particular to quote two statements, which I think are authoritative, that give one some cause for disquietude. One of those statements I mentioned to the Prime Minister at Question Time to-day. On 1st January, 1939, in the second News Bulletin of the B.B.C., the following statement was made: According to figures compiled by experts of the United States War Department, Italy and Germany at the time of the Munich Agreement had six times as many warplanes as Great Britain and France combined. The experts say further that in November, Germany turned out over 1,000 warplanes which they say is four times the monthly production of Great Britain, and that although Great Britain doubled her rate of production in 1938, it is still only half Germany's average monthly output of 500. According to these figures, the average monthly output of the various countries is: Germany 500, the United States 350, Great Britain 250, Italy 200, France undisclosed, but far less than Italy. The other statement on the same subject was made in the well-known publication, Commander Stephen King-Hall's "News-Letter," which has a circulation of 45,000 weekly. In his issue of 13th January, he made the following statement: Immediately after Munich, Herr Hitler gave instructions that the rate of production of aircraft was to be substantially increased. It is at present believed to be not less than 650 machines a month and may be 850. It is likely to attain 1,000 in the near future. The effective fighting strength of the German air force is substantially greater than that of France and Great Britain, combined, and the disparity is increasing. Those are the words I wish to emphasise— For every three machines being built by the democracies it is probable that five are being turned out in Germany. Those two quotations are from sources well known all over the world to people who are interested in these matters, and if there is any serious foundation, as I think there must be, for those statements, then the situation is a very grave one from the point of view of aircraft production. I hope the Chancellor of the Duchy of Lancaster, when he replies, will not be content with giving me the sort of reply which the Prime Minister gave at Question Time, when he said: I think that the House is aware that the monthly output of aircraft in this country has more than doubled in the course of the last year, and that it is continuing to show a marked upward trend. No doubt that is true, but the point is the relationship of that trend to what is happening in Germany and the Fascist States generally. I ask for some reply, no doubt of a guarded nature, but rather more reassuring than we have had so far. Are we catching up? Probably from the point of view of quality our machines are far superior, but from the point of view of numbers, there seems to be some doubt. I would like now to say a few words about the appointment of Lord Chatfield. Of course, I have the greatest admiration for his great gifts and the lifelong service which he has given to the country, but I cannot help feeling that it is not a happy solution of the problem of the three Services to place in charge of them a man who, from the whole nature of his most honourable career, has concentrated his mind on the Navy and naval affairs. However honest and conscientious he may try to be—and I am sure no one could be more so than he—sub-consciously he cannot help having a certain amount of feeling that, after all, the Navy is the best of the three Services. To me, it seems that one might just as well appoint Messrs. Roosevelt, Hitler and Stalin to a committee, and ask any one of them to hold the balance between the ideas of the other two.

When one is discussing the question of the Ministry for the Co-ordination of Defence, one cannot help remembering that: there is in the House—as we have heard during the last hour—a very dis- tinguished statesman who would be perfectly capable of carrying out the task in every way, as a result of his past experience, except for the fact that he happens to be in profound disagreement with the Government on certain aspects of their foreign policy. I only hope that the Government may so alter and advance their views, with the passage of time and the gaining of experience, that they will make it possible for the right hon. Gentleman the Member for Epping, and possibly some others who are now antagonistic to the Government, to help the Government, because I am sure that help is very badly needed.

I want strongly to support the plea that has been made by several hon. Members, and particularly by the right hon. Gentleman the Member for Epping, for the creation of a Ministry of Supply. Hon. Members on these benches, on several occasions, have pressed that upon the Government, and I am certain that the situation of the country is such at the present time that it is essential to set up such a Ministry if we want to supply the arms and other things required for military and civil defence. I believe the only reason it is not created is that it would place the Government in a very uncomfortable position, which is inherent in the whole attitude that they take up. They would, first of all, have to admit that the situation is very much worse than they are prepared to admit at the present time; they would have to say openly and blatantly that appeasement has failed, and that things are very bad indeed; and that they cannot do for political reasons. Moreover, because the Government are based only upon a section of the people, they would find it very difficult to impose upon the people and upon industry the Measure that would be needed. I believe that this Measure would be accepted if it were imposed in the right way by a Government that commanded general confidence. It would mean cutting across the existing arrangements in industry; but I firmly believe that the time has come when we should do something of this sort. It is some months since Lord Baldwin, in another place, spoke of the necessity for mobilising industry. One hoped that his words would lead to some result, but apparently his voice is not as potent as once it was.

The Government ought to do a great deal more to check profiteering, because I am sure it will be very difficult to get people to give their services voluntarily, as is now so greatly needed, if they feel that large sums are being made out of armaments, as is certainly the case, in spite of all the efforts that are being made to prevent it. I always felt a certain sympathy with the Prime Minister when he introduced his first National Defence Contribution. That proposed contribution proved to be impracticable, and had to be abandoned; but in principle, I thought the idea that one should select a certain time and say that from that time we would regard ourselves as being in a war period, and that profits made from that time would be specially taxed, was a sound idea; and I think it was a pity that it did not prove to be practicable.

I want now to turn to the civilian side. I hope the Government will make known in peace time exactly what proposals they intend to put into operation in the event of war. Nothing could be more fatal to the goodwill and co-operation of the local authorities than the imposition of orders from high quarters on the outbreak of war. Something of that sort happened during the emergency in September. Of course, that emergency was not expected and the plans had not been worked out; but unless the Government get the support of the local authorities, working through their democratic machinery, consulting with the local authorities and obtaining their advice and consent, they will not be able to make a real success of their plans for civilian defence.

During the September crisis, as hon. Members will remember, certain sealed orders were sent to the town clerks of various boroughs, and those sealed orders were, in the main, not opened and were returned; but I understand that there were one or two town clerks whose curiosity exceeded their powers of self-control, and they opened the sealed orders, and found something which gave them, personally, considerable satisfaction. There is a well-founded story that one town clerk went to his mayor and said, "I propose to call a meeting of the town council," and the mayor naturally said, "That is not a matter for you; I, as the first magistrate, do that"; and the town clerk said, "No, the whole thing is changed—I have had instructions from the Government that I am over you." We do not want that kind of thing to happen. Whatever arrangements are made they must to be effective be worked out with the consent of the local authorities. I am glad to see in the White Paper that the Lord Privy Seal is proposing in the near future to consult the local authorities and do the very things I am trying to suggest.

We ought to be given further information about the 12 regional commissioners. I understand that they were actually appointed before last September. There would be nothing unnatural in that. They are to have authority over public bodies and to be able to call in the military. I understand they actually operated for a few days. They are to have district commissioners and liaison officers. There is a certain suspicion, which requires to be dealt with, that one of the objects in appointing them is to deal with strikes, and possibly civil disturbance. The position in regard to that point ought to be made clear. I should also like to know whether it is proposed to pay any of these regional commissioners retaining fees in time of peace. I am sure they would be prepared to work without them. The main point is to get the good will of the local authorities in the Government's plans, for only then will they work satisfactorily in time of crisis.

I want to say a word with regard to evacuation camps. It is one of the best and most important proposals brought forward from both the Civil Defence and social points of view. We all know that during the years since the War various local authorities—and I naturally have in mind Wolverhampton and Willenhall—have set up by voluntary subscriptions camps where children from the schools can go during the summer months for week-ends. If, building on that experience, we are to set up a number of these camps all over the country, it would be a great advantage from the point of view of evacuation, and the social side would be greatly to the advantage of the children. I would urge the Government in dealing with this matter to give close consideration to the memorandum issued by the Council for the Preservation of Rural England. They have had great experience and have ideas to put forward which will be very valuable in the choice of sites from both the aesthetic and the practical points of view. It is satisfactory on these benches to find that under the drive of a possible war principles for which we have contended of using national capital for the equipment of the country for partly peace purposes should be carried out in this way. I hope that it will not stop there, and that work will be given to the unemployed in the erection of underground shelters.

I come lastly to the important question of National Service. We are anxious that the Government's National Voluntary Service Scheme should succeed, and we intend to do everything in our power to help in that direction without accepting, of course, any responsibility for the foreign policy which the Government are pursuing. I do not think the voluntary scheme is having a fair chance. After the first outburst following on the circulation of the booklets—which might have been written in a much more interesting way—the Government seem to have sat back and not to have been ready with further plans. Nothing has happened over a number of weeks. The result is that very little progress is being made, and the whole thing is regarded as more or less of a flop, which is a most undesirable and unfortunate state of affairs. The list of reserved occupations is looked upon in a good many places rather as a joke. It was, of course, necessary to make a first attempt, and no doubt there will be a great improvement in future. A great many people find it impossible to understand why certain people are to be in and others left out, and why certain ages are fixed.

There is no doubt that the response to the recruiting appeal so far has been poor. Certain firms have told me that they have made inquiries from their workpeople, not with a view to advising them what they should do, but just to collect information. The returns they have received show that very little is being done in the way of offers for service. The "Manchester Guardian" has been making inquiries in the northern boroughs. They found that in one place, where there are 80,000 inhabitants, they were 50 per cent. short of the needed 3,000, and only 142 had joined since the booklet was published. In another town of 100,000 they were short of 600 wardens and 1,000 casualty helpers. In Manchester on 1st February they wanted 18,000 recruits, including 7,500 fire lighters and 2,200 ambulance drivers and helpers. I am sure we all feel the truth of what I am saying, that the success that we hoped for has not been forthcoming. Unity is essential in this matter. In time of peace in normal conditions a Government which represents a bare majority of the country can rule quite well, in spite of all the opposition that may be set up; but when the country is in a time of crisis like the present, it is impossible for a Government to rule successfully unless it has the great mass of the people of the country behind it. That is the element which is lacking at the present time.

Why has the appeal failed? I think it is due to a state of confusion in the public mind, to a state of fatalism. They do not really know where they are, and no clear appeal is made to them of an imaginative kind that makes them think that their services are really required. Secondly, I think that Herr Hitler's last speech, which was awaited so keenly for some reason, like all his speeches, was regarded, because it did not contain an immediate announcement that the German Army was to march, as very satisfactory and as meaning that a long period of peace was in view. It had this effect in spite of the fact that we all know that his technique is to lull us into a feeling of false security, and, when the soporific effect of the drug has done its work, there is a bold stroke, before the democracies have time to arise and he achieves his next objective. It is entirely a false idea that that speech was of a satisfactory and peaceful nature. I would say to the Government, in the well known words, "Beware the Ides of March." That is a day which will be well worth watching. Thirdly, I think the appeal has failed also because the Government have to pretend that everything is going on well. If they do not do that their stock goes down badly. They are on the horns of a dilemma. They either have to say things are going well, and in that case they do not get recruits, or they have to tell the truth, and then their political position becomes one of serious embarrassment.

The fourth and last reason is because of the profound hostility to the Government in many parts of the country throughout many widespread sections of the population. Whether it is a half or a third or a quarter, I do not know, but it is very substantial, and cannot be overlooked. No national unity while the Government are pursuing their present foreign policy can ever be achieved. I know of many young people of military age who would be glad to give their services, but who feel so bitter and antagonistic at the situation that their slogan is, "No arms for Chamberlain." That is not my view, but we should be blinding ourselves if we did not face the realities of the situation. There was last week-end an interesting pilgrimage to London from all parts of the country, when a number of young people came up and on Monday sent a letter to the Prime Minister asking that he might grant them an interview. I am sorry that he did not find time to do so. The words of their letter are worth reading out: We, the leaders of 2,500 pilgrims of the National Youth Campaign who have come to London to declare our willingness to give National Service for the defence of democracy, request you to give 30 minutes of your time to hear us. As representatives of young men and women of military age who are ready and anxious to serve our people, we ask you, who call for our service, to give us the opportunity of telling you what we can do and how we believe that the whole youth movement can be aroused and organised to serve peace and democracy. If we are old enough to serve our country then we think we have a right to express our views. We request this right to give our service for the principles that we hold dear. It should be made clear that these young people are not prepared to give their services for the policy for which the Government stand, and that is the seriousness of the situation. At the same time, I believe it would be possible to find unity behind the Government if the proper steps were taken. It is impossible for this Government to think of imposing any form of compulsory service, because of the resistance that it would invoke, but I venture to go as far as to say that if a moment ever arrived in the history of this country when the people were convinced that the only way of saving democracy and our liberties was through some sort of compulsion, and they had trusted leaders in the Government who took that view, they would consent to it. But that is not the situation we are facing, and I do not see much prospect of it coming about. Until we return to the collective system based on the ideals of the League of Nations, on which the Government won the last Election, there is no hope of unity here, and no hope of peace for this country or for the world. We on these benches, while doubting many of the measures put forward, shall willingly vote for the sums of money that are asked for, and we shall do what we can to assist in the recruiting campaign for National Voluntary Service at the present moment. I only hope that the Government will make it easier, by the policy they adopt, for the success to be achieved which the needs of the situation undoubtedly demand.

6.31 p.m.

Mr. Amery

May I begin by saying how warmly I welcome the statement made just now by the hon. Member for East Wolverhampton (Mr. Mander) that he believes that this country, without distinction of party, would accept a measure of compulsory universal service if it believed that the necessities of the situation demanded it, and if it were clearly led by a Government with a policy which it supported. I will not pursue that point further at this moment, except to say that some of the criticisms which the hon. Member made with regard to the failure so far of the National Service campaign—I am afraid that we must consider it a failure—do reflect upon the inherent weakness of the voluntary system, a system which is checked at the moment of its inception by a few pacific phrases on the part of a foreign statesman, a system which, in his view, is not succeeding because, rightly or wrongly, a great many young men do not approve of the foreign policy of the Government at this moment, not realising that in defence we are dealing with permanent issues. Surely that system cannot be altogether a satisfactory one. However, I do agree that even from the point of view of our existing system this campaign has not been launched with either great vigour or any real sense of imagination or of appeal to the public. Really where have we got to? At the end of three months there have been enrolled for every kind of service 170,000 men out of a population of 44,000,000, one out of every 260. Does that constitute a national register? I should call it a fractional register at most, and certainly no real guide to the Government as to what sources it can draw upon either now or in the future.

But for the moment I should like to go back to what underlies this whole Debate, the question of finance. On that the Prime Minister gave us a very serious, indeed a grave, warning in his speech at the outset of this afternoon's Debate. On that I would only say that in essence it is not a question of finance at all but of national production and national productive power. If we can develop our productive powers to the full there should be no difficulty in carrying even this burden. To-day, as the Leader of the Opposition pointed out, we are carrying a burden of 2,000,000 men and women who should be playing their part in the productive life of the country but, instead, are a drain upon it. If they were to-day playing their part, and if we were saved that drain, there alone we should have an addition to the wealth of the nation equivalent to the whole of that £580,000,000 which we are asking for for the coming year. Indeed, the whole question of how our industry is to be expanded and developed in our own markets, in our export markets, in our merchant shipping, is a question which is vital to the whole of our policy of defence, and needs handling on much bolder and less conventional lines than we have pursued hitherto. If our increased production can keep pace with the growth of our armaments we shall win through; if not, then we are bound, sooner or later, to come to disaster.

Let me turn from that to the general problem of defence which faces us, and let me begin by saying, and here I differ from the hon. Member for East Wolver-hampton, how warmly I welcome the appointment of Lord Chatfield as Minister for the Co-ordination of Defence. I have had personal experience of his high abilities at the Admiralty, but I also know that in many years as chairman of the committee of the three chiefs of General Staff he has had every opportunity of surveying our defence problems from a wider angle than that of a mere sailor. May I in the same breath also congratulate and wish well to my right hon. Friend the Chancellor of the Duchy of Lancaster, who is now exchanging a ploughshare, somewhat battered by those whom the present Minister of Agriculture used to represent, for the sword, which I have no doubt he will wield with the greatest distinction. The one thing that seems to me to be essential is that we should look upon our problem of defence as a whole in which each element is essential and in which no one element can be neglected. To that I would add that our standard of preparation in every element of defence must be judged by one test only, and that is the test of our actual needs, the needs which arise from the direct defence of our own territories and those which arise inevitably from our foreign policy. It is no use having a foreign policy, for instance, which is based upon the assumption that we and France must work together or perish separately, and then construct all our schemes for our land forces on the basis of a policy of insular isolation. That was our mistake in 1914, and we paid dearly enough for it then.

Let me come to the position with regard to the several aspects of our defence. Our naval position is, on the whole, satisfactory, if we regard only the European area of possible warfare. We have no margin left for the eventuality of the extension of war to the Far East. I am not sure that we have even yet a sufficient margin of small craft and escort craft for the protection of our merchant shipping in war. We certainly have not a merchant service adequate to all the purposes which we may require of it. However, on the whole we are dealing with that problem in relation to our needs, judging our requirements by the standard of the forces we may have to meet. We are endeavouring to do the same as regards the air, and I only hope that we may before long achieve a position in which we and France together are not going to be, as we are to-day, gravely inferior to two such potential adversaries, shall I say, as Germany and Italy combined. In regard to Air-Raid Precautions, we are also considering the whole problem from the point of view of what may happen in war and what measure of attack we may have to meet. When it comes to the Army, on the other hand, we have never yet during all the years that I have listened to and taken part in Debates in this House upon defence attempted to correlate our military provision with our obvious needs in the event of war. No Government has ever dared to lay before Parliament what it considers to be our needs in the event of war and then produced a military scheme bearing at any rate some relation to those needs and constituting some attempt to make real provision for them. We have done that even less since the Great War than before, and yet our needs are surely far greater to-day than they were then.

I will take the question of purely Imperial Defence, the defence of our naval stations and of the territories for which we are more or less directly responsible. In 1914 no danger threatened any part of the British Empire outside the North Sea zone except, a few months after the War broke out, for the possibility of a weak attack across the desert upon the Suez Canal. Japan was our ally and Italy was neutral and soon to become our ally. There was no danger there. Is that the position to-day? I venture to say that at the outbreak of a war we might find the whole basis of our position in the Near East in the gravest danger. What would happen to the position of our Navy in the Mediterranean if Palestine and Egypt fell to invading forces, and if Malta were difficult to hold in the face of continuous air attack? We have to consider all these things in conjunction with each other. If we have greater and more serious problems to meet in Imperial Defence itself, what about our commitment to France? In 1914, with first a neutral and afterwards an allied Italy, with Russia absorbing not only the whole fighting strength of Austria but a very considerable proportion of Germany's fighting strength, the odds were at any rate reasonably well matched.

What is the position of France to-day? Can she, for geographical if for no other reasons, rely to any great extent upon Russia directly helping her at all in the early stages of a war? Czecho-Slovakia has gone, and the whole force of a Germany of more than 80,000,000 people, together with that of an Italy of 40,000,000, may be concentrated against the 40,000,000 of France. The Maginot line is very strong, but how can we expect our friends and allies to hold that position indefinitely with no kind of certainty as to any measure of definite help that we can send either in the first two months or in the first six months, nothing better than the general assurance that after war has broken out we shall begin to do something about it, and no doubt do our best when the time comes? There may not be a battle of the Marne next time. I would only echo what my right hon. Friend the Member for Epping (Mr. Churchill) so truly said, that the statement which the Prime Minister made the other day, so valuable, I believe, to the cause of peace both for its effect in France and elsewhere, will be discounted day after day unless it is complemented and given real meaning not only by those intimate discussions between the staffs of which my right hon. Friend spoke, but also by concrete evidence that we really are going to do something to make our military forces in some measure adequate to the demands which may be made upon us. We know that nearly a year ago warnings were issued to Germany of what might happen in the case of aggressive action against Czecho-Slovakia, but warnings not followed up by any parallel military action or preparation or indeed, by any parallel diplomatic action, were, of course, discounted. It is clear that the specific statement of the Prime Minister the other day will be equally discounted if we do nothing to follow it up in the way I have suggested. What then are we to do? What can we do to help in this situation?

Mr. A. V. Alexander

I am interested in the right hon. Gentleman's study of the strategic situation. Will he add to it by telling us what is his opinion about the new position in Spain as affecting our defences?

Mr. Amery

Frankly, I have no clear opinion at this moment, nor, I think, can anybody have, until we know what happens in the next few weeks, how far we may be dealing with a neutral and not unfriendly Spain or how far there may not be additional dangers even there. I certainly am not in a position myself to judge of that. But to come to the point of what we are able to do in the present situation, I ask hon. Members to compare our position to-day with what we were able to do in 1914. In 1914 we had a Regular Army of over 230,000 men. We had a Regular Reserve of nearly 130,000 and a Special Reserve of 73,000. We had a Territorial Army of about 265,000 or 270,000. In all, we had some 700,000 men of whom more than half, at any rate, had had considerable periods of training. To-day we have a Regular Army of 200,000. We have a Reserve of 100,000—indeed, I do not know that it even stands at that figure. The Special Reserve has ceased to exist, though I believe that we are just beginning to collect a few thousand men under the heading of "Supplementary Reserve." The Territorial Force, as a field force, is down to 130,000 or just half what it was before the Great War. We must, obviously, leave on one side the 60,000 or 70,000 men earmarked for the passive defence of the country against air attack. That leaves 430,000 men with some rudiments of training available to-day, as compared with 700,000 available at the outbreak of the Great War.

My right hon. Friend the Member for Epping reminded us very truly that with the Regular Army and a very strong Reserve we were then able not only to put six perfectly equipped divisions into the field at once, but we added a good many divisions within the succeeding two or three months, and I believe that we could have made, almost from the start, a much fuller use of the Territorial Force than we did. To-day, what with troops locked up in Palestine and elsewhere, I doubt if we could send two divisions to the front in the first month or two, and perhaps two or three months afterwards we might be able to send nine greatly reduced Territorial Army divisions. Does anybody suggest that that is a contribution to dealing with the problem which we can, in fairness and decency, ask those who are going to shed the blood of their citizens side by side with us to accept?

I shall be told that we cannot do more, and that our part is in the work of the Navy and in a great Air Force, and in the production of munitions. Frankly, that answer does not seem to me to face the issue honestly. Of course, we have to do more in proportion to our population in naval and air work than other nations. But how much more? We are apparently to reserve for munition purposes something like 6,000,000 of our population of potential fighting age, or half the total. Apparently we require for air-raid precautions 1,000,000 or 1,500,000. The Navy and the Air Force, between them, absorb, say, 300,000. Still that leaves over between 4,000,000 and 5,000,000 men of fighting age, on whom, in one way or another, we can draw as a reserve of man-power. Our reserves of man-power are there, and are still most formidable. What use are we to make of them? What are we going to do about it if, as my right hon. Friend the Member for Epping truly remarked, we are engaged, as we may be to-morrow, in a struggle of life or death? Can we then afford to hold anything back?

Given our existing voluntary system, I would ask, cannot we do something more to meet that need than we have done so far, or are doing? Surely if we are prepared to spend some additional money—not very large amounts compared with what we are spending in other Departments—we should have no difficulty in raising the Special Reserve very rapidly to 100,000, or even 200,000, on the basis of a period of training of six months, or possibly longer. That would be an invaluable support in the first few months of a war. That Special Reserve would consist of units which would supply drafts at the beginning, and then as the war developed and as fresh recruits came in they would eventually be units which would go to the front. That might, incidentally, be a contribution, at any rate, to solving the problem of the young unemployed, which is the gravest moral aspect of the whole unemployment problem. In South Africa, which is much further from the zone of danger than this country, they have done that with the greatest success, and have made a real contribution to solving both the problem of unemployment and the problem of defence.

Again, is it not possible, even under our voluntary system, to find such additional inducements as would bring the Territorial Force, at any rate up to the strength of the field force of 260,000 that we had before the War? I confess I see no sign of any effort being made in that direction by the Government which has nailed the flag of voluntaryism to the mast. Surely if we are going to make a national appeal for volunteers to come forward, the standard which we put before them ought to be the standard of our needs. But what was the view taken by the Lord Privy Seal in the Debate of 6th December? He brushed aside the arguments for compulsion and, indeed, the arguments for his own campaign, by saying that the man-power available was "so much in excess of requirements". But he gave us no idea of what those requirements are. It did not seem to me that the right hon. Gentleman had entered into any real consultation with the Ministers responsible for the Defence Services as to those requirements. All I know is that in his handbook the requirements for the Army are not put in the forefront, but are sandwiched in somewhere between fire brigades and other miscellaneous services, about half-way through the book.

That is not the way to succeed under a voluntary system. You must set before your people a standard. Lord Kitchener appealed for "the next 100,000," and then for another 100,000. We have set no standard before the people except a negative standard—a list, very obscure and difficult to understand, of those who must not volunteer, and a handbook telling you what you may volunteer for if you finally discover that you may volunteer at all. That is not the way to go about it.

I am afraid I am going to be met by the answer—and I am not sure that our French friends have not been met by that answer in recent weeks—that it is no good asking for more men until you have equipment for them. That is the vicious circle in which we have wandered for years. You begin by fixing your establishment at what you hope to be able to get. The White Paper boasts that the Territorial Force is nearer its establishment than it has ever been. Yes, it is nearer establishment, but its establishment, so far as the field force is concerned, is about half what it used to be. That is not much to boast about.

Lieut.-Colonel Dower

I should like the right hon. Gentleman to appreciate the fact that recruiting is not really a severe problem, that you can get as many men as you want, provided you ask for them, for the Territorial Army. There is no question about that.

Mr. Amery

I will come to that point in a moment. I was saying that you fix your establishment at what you hope to get, and then you set your standard of equipment by that establishment, so that when a national emergency does arise and volunteers do come forward, you cannot equip them. To-day, if war should break out we should be in the miserable position to which my right hon. Friend the Member for Epping referred as having existed at the outbreak of the Great War when we had hundreds of thousands of men in civilian suits drilling with wooden rifles. If you had the equipment, and if you provided in peace time permanent cadres of officers and non-commissioned officers, then you could expand when the need arose and take in all the men who came forward, instead of having the posi- tion which exists in some parts of the country to-day, with men volunteering for the Territorial Army and being placed on a waiting list from which they may disappear before many months. I would urge that one of the first things we have to do, under the existing system, is to provide adequate equipment for the Army based upon the whole of our man-power, and not upon the number of men who happen to come forward in ordinary quiet times. This applies both to equipment and cadres, and from that point of view I would again support my right hon. Friend the Member for Epping, as I have so often done before in this House, in his plea for a Ministry of Munitions which would look at things not from the point of view of the War Office and the present establishments, but from the point of view of war establishments and war equipment.

There is one thing I would add. While you may get considerable numbers, voluntarily, in an emergency, what you cannot get in an emergency and what you cannot get under a voluntary system is adequate training to fit those men to be ready for the outbreak of a war in which they would be opposed by the trained troops of other countries. The reason is perfectly simple. It is not lack of patriotism, but the absence of a national law placing an equal obligation to train upon all our citizens. The patriotic citizen cannot afford to give his services because of the competition of the less patriotic. The present system is one in which the patriotic are all the time black-legged by the less patriotic, with disastrous results for the whole nation. We are, I know, already envisaging conscription if war breaks out. For my part I would much sooner have compulsory universal training in time of peace and complete freedom for voluntary service in time of war, because I believe that you would get all the men you want, at any rate in the opening months of the war, from men both trained and inspired by patriotic feelings. You would to some extent combine the advantages of a voluntary spirit, and of that training without which it is sheer murder to send our brave sons to the front. I believe myself that this country—and there I agree with the hon. Member who spoke last—would be ready for some form of universal training if it were really made alive to the gravity of the inter- national situation by a Government which made its case with conviction and sincerity.

Let me suggest, at any rate, two or three things which we might do immediately. We could immediately find the money, to raise at least 100,000 Special Reserves; we could double the Territorial Army field force, we could at once order equipment, not only for those enlarged forces, but for the whole of the 4,000,000 men we might have to use in the course of a war; and, not least important, we ought at once to create what Germany created when she was compelled to reduce her army—a small corps every member of it trained in order to train others when expansion becomes necessary.

It is for the Government to come to decisions on the actual solution of the problem. But do not let us go on pretending that the problem does not exist, and that we can afford to leave the military aspect of the situation out of our picture, and then survive when the critical hour arrives. I cannot help feeling that the country is, on the whole, more alive to the danger than either this House or my right hon. Friends on the Front Bench. We are confronted with nations like Germany who are keyed up to instant readiness for war, who are to-day practically mobilised for war in every aspect of their national life. Here we are only slowly beginning to wake up. In some departments we are bestirring ourselves more than in others. Our sense of the sea led us to bestir ourselves a bit earlier with regard to the Navy. The imminent danger at home is making us bestir ourselves both in the matter of actual aviation and of passive defence against air raids. But in other matters, more particularly in regard to the Army of which I have spoken, but also in others, such as food storage, the provision of adequate merchant shipping, and a good many others, we are still, I fear, toying with the subject, refusing to face the problem as a whole or to make the preparations in each department of our defence on a scale corresponding to the strain it will have to bear. There is no time to lose. At any moment we may wake up to find that we are too late.

7.5 p.m.

Mr. Richards

I do not propose to-night to go over the field of the details of defence, but I would like to say a word or two concerning the financial aspect of the proposals placed before this House by the Chancellor of the Exchequer yesterday. I suppose it is inevitable when there is very heavy expenditure incurred over a very short period of time that the whole question of the distribution of the cost should be raised. One can understand the natural feeling of the Chancellor of the Exchequer when he hesitates to increase the amount of the Income Tax either by Is. or 6d. in the £. But I am not quite so certain as to whether the Chancellor is not contemplating, perhaps, a considerable increase in indirect taxation, and I would like to point out that, however heavy the burden of direct taxation may be, the burden which is left by indirect taxation is always much greater, because unfortunately it is not always seen and realised. I think of those words addressed to the north wind: ''Thy tooth is not less keen Because thou art not seen. And I think that applies even more to indirect taxation than it does to the question of direct taxation.

What the Chancellor is asking the Committee to do is to increase the amount of borrowing powers voted in 1937 from £400,000,000 to £800,000,000. When the present Prime Minister in 1937 asked for powers to borrow up to£400,000,000 I presume the House was under the impression that there was some relation between the £400,000,000 and the total cost, which he estimated then at £1,500,000,000. I would like to ask the Chancellor, or whoever replies for him this evening, whether that proportion still holds good, because it is a very serious matter if the proportion is to be disturbed. Are we to take it that, with borrowing powers now extended up to £800,000,000, the new cost is estimated at somewhere about £3,000,000,000? Because there is a question of principle, I feel, involved in the relationship between the amount of borrowing and the amount that is to be raised by taxation, direct and indirect.

We have a right to know exactly whether there is to be continued some relationship between this £800,000,000 that the Chancellor is going to borrow and the total expenditure. If the Chancellor is quietly going to change his proportions, that raises a question of principle, and not merely an extension of practice. There was an ominous sentence in the speech of the Chancellor yesterday when he summarised the expenditure over the last three years and gave us the proportions of the amount got by taxation and the amount got by borrowing. For example, he said that in the first year, 1937–38, £200,000,000 was obtained from revenue and only £65,000,000 from borrowing. The next year the figures were £274,000,000 from revenue and £132,000,000 from borrowing. His estimate for the coming year is that by taxation he hopes to get £230,000,000, that is to say, less by £44,000,000 than was got last year, and that he is going to borrow next year £350,000,000, that is, nearly three times as much as he borrowed last time.

I notice that in the report in the "Times" to-day of that particular statement of the Chancellor there were cheers on the Ministerial side, and I asked myself why there should be cheers at that point. I think the answer is fairly obvious. First of all, I presume the House gleaned from what the Chancellor said yesterday that there was not likely to be any increase in the Income Tax next year, but I think that the cheers meant, too, that here was an excellent opportunity for investing some of the profits that have been made in connection with our present rearmament. Because we hear the opinion on all sides of the House that, despite the efforts that have been made by the Treasury to check profits, there is no doubt at all about the very considerable profits being accumulated, and here there is ah excellent opportunity, as I have indicated, for investing those profits.

We have on this side, I take it, on the whole a fundamental objection to borrowing, and I think that the country is entitled to know to what extent this borrowing is to be carried on. We have no indication either of the ultimate amount of money that is to be involved in this rearmament, and we all know the difficulty of assessing it; but I think that the country is really perturbed about the increase in the National Debt which is taking place, because it gives an opportunity for the profiteer to have a lien upon the revenue of the State for a great many years. We have seen that in the case of the late War. People who made money out of the War had a splendid investment open to them in which they could put the money that some of them had got quite illicitly in the course of the War. We are very much perturbed lest that kind of situation is repeated in the case of this borrowing.

Of course, it is defended as a loan on the ground that we are really trying to get posterity to carry a little of the burden. The Chancellor pointed out yesterday, and pointed out quite frankly, that it is rather unfair that we should bear the whole burden of rearmament because it is going to ensure to the profit and advantage of posterity as much as to our own. Let us examine that question for a moment. The money will have to be borrowed now. The money, that is to say, will have to come out of the present national income. You cannot borrow out of an income that is going to be produced 40 years hence, and that means this, that the loss which the borrowing entails is a loss which falls upon the present generation. We cannot get away from that fact. The money will have to be borrowed now. What we are doing—and we are only doing it to a limited extent—is distributing the cost of the borrowing, but the actual borrowing involves a present loss to the community. If the Chancellor, as I believe is suggested, is going to borrow £350,000,000 next year, it means that that is taken out of the national income that year. You say it may come out of savings. Well, savings, after all, come out of the national income.

That amount of capital, therefore, is taken off the market, so to speak, and is taken over by the Government. What would happen to it otherwise? I presume we may take it that the £350,000,000 would in the ordinary course of events find its way into industry, and we are all agreed that industry requires, even today, much more capital than it has. We are robbing industry of the opportunity of getting this £350,000,000, and that means in any particular case that the rate of interest for the industrial borrower will naturally have to rise a little, and the borrower will come to the conclusion, perhaps, that he will not borrow at the increased rate, but will carry on his production in the old-fashioned way with the result that his costs will tend to increase. If, on the other hand, he pays a higher rate of interest, his costs will also be increased, and the increase will, of course, be passed on to the consumer. The real truth, therefore, is that the interest will be paid in increased cost to the consumer.

Those who read the "Times" of yesterday will have noticed that it contained an article in a prominent position calling attention to what is regarded as the chief domestic question, which is apt to be overlooked in these discussions on defence and foreign affairs. The chief domestic question, the writer in the ''Times'' claims, is the question of population. It is very difficult. I am afraid that sometimes the word "posterity," like the word "charity," covers a multitude of things, and it is very difficult for us to know what is going to happen in the future; but this article points out, and I think the statisticians on the whole are agreed, that in 60 years' time it is very probable that the population of this country will not be greater than 20,000,000. He claims, of course, that that is a consideration of the greatest importance. In so far as we succeed in throwing this burden upon posterity, we are increasing the amount of the burden that will have to be borne by each individual. If we are 40,000,000 to-day, and if in 60 years' time the population of this country is only 20,000,000, the individual burden borne by everyone in the country then will be twice as great as it is to-day. Consequently we are throwing upon posterity a burden much heavier than we should have to bear if we bore it to-day.

In addition to that there is the question of interest—a very difficult question. If the £350,000,000 had gone into industry it would have been earning interest. It would have been engaged in production; the goods produced would have been sold; and out of the proceeds interest could have been paid on the loans. But in this case, of course, the money will be used in producing armaments that have no commercial value at all, but interest will still have to be paid. That is the irony of the situation. In a patriotic moment like the present, when we hear a great deal about what our people are prepared to do, it is obvious that our capitalists and wealthy people are not prepared to lend money unless they are well paid for it. The interest will come, not out of industry, not out of the work that the £350,000,000 will have done in producing armaments, but out of the pocket of the taxpayer. I have been trying to calculate it for a period of 20 years. Assuming that we borrow the £800,000,000 at 3½per cent., the bill at the end of only 20 years will be £1,350,000,000. That is a very serious question. Most of that amount will go into the pockets of the rentiers, and at the same time the consumers in this country will have to pay, as I have tried to point out, increased prices for their commodities, because they have been practically robbed of this amount of capital.

If the population is going to decline, as I am afraid is inevitable, it is inevitable that industry should decline too, and, consequently, not only are you going to increase the burden on the shoulders of every individual, but you are going to put a burden upon people who will be less able to bear it, because then the country cannot be as prosperous industrially as it is to-day with a population of 40,000,000. I feel that these points ought to be raised, because a deep question of principle is involved in this question of borrowing, and I do not think there ought to be any complacency on the part of the Committee. When the Committee votes to-night in favour of borrowing £800,000,000, it ought at the same time to recognise that that means for some people an opportunity to gain extra profits, and for other people it means a decrease in their standard of living.

7.23 p.m.

Sir Alan Anderson

The Debate has ranged very widely round this enormous problem, but it is a simple problem. I appreciate that, by our habits of debate, we must look at it from every side, examine everything that the Government bring forward, and express our different views about it; but in itself the problem is a simple one, though it is so enormous that we shudder at having to take up this great sacrifice, and are full of horror at the hostilities which might possibly ensue. I do not want to be led away from the exact Motion that is before us, but many of the speeches made to-day and yesterday have been full of most interesting points. For instance, the hon. Member for Wrexham (Mr. Richards), who has just spoken, talked about the decline of population. He thought that it was inevitable, and that inevitably it would be accompanied by a decline of industry. I question that; I hope we shall find that our future population will be of better quality, although the quantity may go down, and that must be our aim.

Another subject that is frequently discussed is that of a Ministry of Supply. The hon. Member for East Wolverhamp-ton (Mr. Mander) spoke of it, and wondered how the Government could have resisted setting up a Ministry of Supply. The right hon. Gentleman the Member for Epping (Mr. Churchill) seemed to think they resisted it simply because he suggested it. I would, however, beg my colleagues to remember that during the War we had not a comprehensive Ministry of Supply. We had the Ministry of Munitions, which dealt with part of our supplies and became very efficient, but the suggestion that we should have a comprehensive Ministry of Supply, although it was frequently made, was always turned down. I myself was one of those engaged on the work in connection with the supply of ships, guns and So on for the Merchant Service and the Navy. I remember quite well that there were violent Debates about it, but it was never brought in.

There are many other interesting matters involved, but I do not want to detain the Committee, and will come straight to the questions that we have to discuss. They are: Must we Spend this money? Can we afford to spend it? Is this the best plan? In spite of all our discussions, it appears to me that the inherent unity of the House of Commons about these questions leaps to the eye and is very impressive; and we want it to be impressive. It is of great propaganda value in the world. Our willingness to accept the enormous sacrifice involved by these vast armaments and to vote the money, and our agreement that it is necessary to do it, is a most impressive demonstration to the world. Of course, if we could give it to the world on this and on other occasions without bringing in all the other matters on which we differ, it would have a still better propaganda effect, but that, after all, is not our way.

Our answer to the question "Must we spend this money?" is "Yes." Can we afford to spend it? Well, can we afford not to spend it? I think it is obvious that we cannot afford not to spend it. I could find several other things that we cannot afford not to do, and that is where we differ, because some of my colleagues would perhaps not agree with me, but would favour other things of their own. I, for instance, think it is obvious that, if we are to rely upon drawing our supplies of food and raw materials from abroad, we cannot afford not to have under our own flag the ships to carry those supplies. Again, I personally feel that, although we have all these millions of town dwellers who must have access to cheap food from all over the world, we cannot afford to let our countryside decay and be impoverished of its people. I think, too, that we cannot afford to discourage our boys and girls, when they go out into the world, by allowing them to feel cold-shouldered by being left out of jobs. We must clear up that part of the unemployment problem, because we cannot afford to allow it to continue. That we cannot afford to spend the money that is needed to defend this country seems to me not to be arguable for a moment.

Then comes the question whether we are doing it in the right way, and whether we can afford to do it in this way. Can we afford to borrow these great sums? The question was raised yesterday, when the Chancellor said he was proposing to collect from taxation for this purpose during the coming year £44,000,000 less than was collected last year, and it was argued that he might not increase taxation, and might even decrease it. I should have thought that the answer was clear enough, namely, that he saw that trade was going down, and that direct taxes must yield less; and, personally, I should have thought that the tax burden on the country now has about reached its effective maximum. I do not believe you will get a very much greater yield without an enormous depression in industry, and, therefore, it appears to me that this arrangement is probably the right one.

The question remains whether we can afford to borrow this money or whether it is imaginary money and we are putting the burden on the pound sterling. I suppose the answer to that question turns on the amount that we are saving; if we borrow from the people of this country something which does not exceed what they are saving in the year, we are not putting a burden on the pound sterling, and as far as the current year is concerned, all is well. People are lending to the Government to build aeroplanes what they would otherwise lend to the L.M.S., or the Commonwealth of Australia, or the Dominion of South Africa. But the problem does not end there. We come on to the following years, and have to find the interest on the money and the sinking fund, and that is where we come up against the great trouble to which the Prime Minister referred this afternoon. When we have to pay the upkeep and depreciation, if we cannot raise this in taxes or if we cannot improve our industry so that the taxes yield more, we shall be increasingly impoverished. There is no argument about it, but that does not vary our decision about this question that is before us to-night. Even if we have to be poor, it is much better to be poor and stand up for ourselves than to keep our money and be rich and then be overrun. I therefore believe that we are absolutely agreed that this money has to be spent, and, personally, I am quite convinced that this is a wise and good way of collecting it.

Mr. Alexander

May I put a question to the hon. Member, for whom we have great respect as a great banking authority? Will he tell the Committee, from his experience, that this country will be able to repay what will probably be a total commitment of £9,000,000,000 of National Debt, or will it lead to repudiation?

Sir A. Anderson

The right hon. Gentleman is mistaken in thinking I am a banker. I am a Director of the Bank of England, appointed because I am not a banker. In answer to his question, I have full confidence in this country paying its debt. It has always been paid, and I think it will certainly be paid.

7.34 p.m.

Mr. Maxton

I have risen to oppose this Motion, and in doing so I may say that I am gratified to be following the authentic voice of the City of London. Although I thought it spoke with a quite noticeable Scottish accent, it was still the authentic voice of the City of London. The hon. Gentleman described this loan of £800,000,000 as a sacrifice that we are making. I wonder whether, if I came to him—if not as a banker, as one who is responsible for a big banking institution, without, I gather, technical knowledge—and asked him for the loan of £1,000 would he say that I was making a sacrifice? It seemed to be rather an unusual word to apply to people who are borrowing money. And if I promised to pay him regularly 5 per cent. interest on his money, would he say that he was making a sacrifice?

Sir A. Anderson

I would answer my hon. Friend that if he undertook a great burden and made himself liable to pay the interest on that loan, he would be undertaking a great sacrifice.

Mr. Maxton

Well, I would say that if I got £1,000 in my pocket to-morrow that I had not got to-day, I would not be making a sacrifice. I remember a very well-known raconteur in this House telling me the story of a man who was being examined in bankruptcy after having run through some £10,000 of a legacy in a couple of years. They were asking him how he had spent it, and he said, "I spent some of it on drink, I spent some of it in gambling, I spent some of it on my lady friends, and the rest I just wasted." I feel that this loan of £800,000,000 cannot be divided into the earlier categories at all, and that all this is just definitely going to be wasted, and to use the word "sacrifice" in connection with a proposition of this description seems to me a complete misnomer.

I am opposing the Motion mainly because it is a war measure. The hon. Member said that this would have made a great impression in foreign countries. I am afraid it will, and that is one of my reasons for opposing it. What is the impression that it will make in the dictator countries? I believe that the Prime Minister of this country, the head of a democracy, did impress on the peoples of the dictatorship countries that we were genuinely anxious for peace. I think the greatest thing that was done during the Berchtesgaden-Godesberg-Munich period was, as I have said here before, the liberation of the peoples' minds from some part of the teaching of their dictators that Britain, in common with other countries, was waiting for the chance to pounce on them and to slaughter them. The people of Germany and Austria had come to believe that there were people in the world who were genuinely anxious for peace and that Great Britain was at the head of a great peace movement in the world. What is the weapon that we hand to the dictators to answer that feeling in their own countries now? If I were in the place of the leader in Germany to-night, I would say, "Here are your pacifists. These are the people that you are relying on against your own leaders. They are demanding £800,000,000 for more weapons of war."

The right hon. Gentleman the Prime Minister to-day, in replying to the speech of the hon. Member for Burslem (Mr. MacLaren), made yesterday, said that he was not prepared to consider the possibilities of a conference for peace unless he had some sort of assurance in advance that such a conference would have a prospect of success.

The Prime Minister

For disarmament, not peace.

Mr. Maxton

Well, I do not think the hon. Member for Burslem, voicing a view that has been put frequently by the right hon. Member for Bow and Bromley (Mr. Lansbury), was limiting his conception of a conference to a disarmament conference.

The Prime Minister

I was here and I heard his speech, and that was my impression.

Mr. Maxton

That may be so. It may be that that was how the hon. Member for Burslem expressed himself. I certainly am not putting it forward—indeed, I said in a speech here the other day that I do not think—that meetings to discuss specifically disarmament are in these days practical politics, but I do think that meetings between the responsible statesmen of Europe and of other parts of the world to discuss how to make a decent world for the people of the world are real, practical politics, into which the armaments problem and the war danger and the trade problem are all fitted in their proper perspective. I agree with him that it would be simply folly to assemble some great international conference, inviting every nation in the world to it, like the Economic Conference that was held some years ago and was a complete fiasco. I agree that such a conference would probably not be fruitful, but there is work to be done in getting together all the people of the world, if you can get them together, to talk peace and make the voice of peace more loud in the world than the voice of war.

That is my only reason for taking part in this Debate. I would infinitely rather have given a silent vote, but it seems to me that to remain silent on this issue is merely to join the ranks of the defeatists who have come to the view that the main- tenance of peace is a hopeless task and that all that we can do is either actively to support or at least passively to allow the whole trend of the national life to go in the direction of making us a great militarist nation. Every voice that can be raised for peace should be raised. I regret that this Motion should be brought forward to-day at this time, and I question whether, on the reading of the White Paper, it is necessary to bring it forward at this time. I regret it, because it will be represented throughout the world, whatever it may be represented to be by the Ministers in this country, or even whatever they may think of it in their own minds, as a warlike act, a threatening gesture, and to me that does not help to resolve the difficult and intricate situation in which the world finds itself to-day. That is all that I want to say on that general question, which is not the topic before us.

I want to say one or two words about this nation putting a further burden upon its shoulders in the matter of debt. Frankly, I think that if this burden had to be faced, then the method of taxation should have been adopted to a far greater extent than it is being adopted. Then there would be some room for sacrifice. I have heard one or two speeches being made which suggested that the limits of taxable capacity are almost reached, that the persons with money in this country cannot afford any more. I do not know. I cannot claim to have the great knowledge that the last speaker has of these matters, but in a week-end paper I read about one family fortune, the Ellerman fortune, a fortune of some £30,000,000 odd, having doubled itself in this country during five years. Taxable capacity obviously has not been reached with reference to that particular estate. I read on the tape as I came through into the House a report of the annual meeting of the Imperial Tobacco Company, paying 7½per cent. on the top of a previous 7½ per cent. and a 10 per cent. bonus on top of that. Well, I say to the Chancellor that I have contributed very substantially to those profits—I am one of the regular consumers of the product—and I give him my full permission to take back into the public purse all that I have contributed to that profit; and I am sure that a majority of the consumers of that firm's product would be delighted to give him the same permission.

The outstanding thing to me in the whole of this loan is that the House is ready to vote the £800,000,000 to-night. I shall vote against it with my colleagues, but I do not expect to see any big battalions in the Division Lobby along with us. I have been in this House nearly 17 years, and all that time my major interest has been to see the force of this House being directed to lifting the load of poverty off the shoulders of the people of this country. That is the great outstanding political task of our time, and the task which has to be achieved in all countries before the war danger is removed. During all that time if there had been £800,000,000 available and directed definitely towards that end, this would be a better and happier country for the majority of its citizens to live in. Never during that time has any statesman of any political complexion been ready to come forward with a proposition of any thing like that size, yet to-day for the purposes of war the House will vote this money by an overwhelming majority.

I am against this Resolution because of its effects upon the psychology of Europe. Because I am against the purposes for which this money when voted will be used, because I am against the method of borrowing, when interest is to be paid by the community out of the blood and labour of men and women who, if not in dire poverty, have a very low standard of life, and because I can see 50 better and finer ways in which this money could be spent, I shall oppose the Resolution in the Division Lobby.

7.48 p.m.

Lieut.-Colonel Dower

I was rather surprised that my distinguished Friend opposed the Resolution moved by the Chancellor of the Exchequer, because in the Army he was considered one of its best recruits. I am told that the other day he asked a distinguished general what he would do if he came forward and asked to join his division, and when the general said that he would be very pleased to have him, my hon. Friend said: "Is it as bad as all that?" The Debate has covered a very wide range of subjects. Part of it relates to finance, on which we had a brilliant speech from my hon. Friend opposite. The other half relates to defence, and I should like to confine myself to that question. There have been many criticisms voiced against the Government. Some hon. Members say that the rate of rearmament is slow and that it is ineffective. There are those who think that opportunity should be taken to censure the Government. I cannot agree with that point of view. In my opinion it has neither been slow nor ineffective.

I should like to confine my remarks to the branch of defence which is of the utmost importance to the country. I refer to anti-aircraft defence. Whether we are to provide an expeditionary force or not, one thing absolutely certain is that the anti-aircraft defences will be called out at a moment's notice to get into the field, and it is essential that they should be ready. I should like to deal, first, with the question of equipment. At the time of the last crisis we were told that there were next to no anti-aircraft guns and that there were not enough searchlights to illuminate enemy aircraft. Although it is perfectly true that our equipment was not of the amount that we should have liked to have seen, even in those times we could have put up a pretty good show, had peace not been attained.

One thing that is absolutely certain is that we have a very different picture to-day. The position that we were in at the time of the crisis last September cannot be compared with our position to-day. So far as my own battalion is concerned—and I am not in any way giving away secrets—ourpersonnel is 50 officers or more, and 1,600 men, and if we were called into the field next month I am convinced that we should go in with 50 officers and 1,600 men, while as far as our equipment is concerned we should have as much as we could possibly handle. Hon. Members will say that that is the kind of statement that they usually get. From the efficiency point of view I am confident that my anti-aircraft battalion would function 100 per cent. I shall be pleased to take hon. Members to see it whenever they like, and whatever their politics may be.

There is one thing that I should like to bring home. It may seem a small point, but it is very real. We are getting day after day thousands of pounds' worth of valuable equipment—sound locators, concentrators and instruments such as these—and any number of other technical instruments, and looking after those instruments is a great problem. It is true that we have skilled mechanics to repair them if there is a breakdown, and we have trained attendants to carry out alterations when orders come from the War Office; but we badly need a permanent staff to look after this valuable equipment. I value the equipment of each company at not less than £26,000, and at the present time there is only one part-time man who is paid £1 a week to take charge of the lot. I put forward that as a suggestion which I hope the Government will take up, and that when the Resolution has gone through, as I am sure it will, we shall get a chance of looking after this extremely valuable equipment, so that it will be ready in time of crisis.

Mr. Fleming

Is the man in question on the strength, or is he a civilian?

Lieut.-Colonel Dower

He is on the strength of the unit, but he is paid in respect of voluntary service £1 a week. That amount is not sufficient for him to put in eight hours a day. We want someone who will put in eight hours.

Mr. Fleming

What rank does he hold?

Lieut.-Colonel Dower

He holds the rank of quartermaster sergeant. In regard to personnel, I daresay some few units are not up to strength, but it is not because they cannot get recruits. They can get as many men as they want. The difficulty is that they have not the trained instructors available to train the recruits when they come. It is no use having the men if you cannot put them through their training. Other units that have been in existence 12 months or so will be found vastly different from what they were during the crisis of last September. At the time of the crisis a great many of the officers and nearly all the men were raw recruits. To-day, after an intensive winter's training, which is going on now, things are vastly different, and in the spring these men will be able to take the field and function with thorough efficiency.

I should like to make another suggestion. The training grants ought to be increased. It is no use the men turning up for a fortnight in the summer and expecting to function 100 per cent. They must have week-end training and they must have an Easter camp. That is absolutely essential in the interests of the country. The present training grants, in my opinion, are not sufficient, and I hope they will be increased. I should like to deal also with the question of organisation. In the anti-aircraft we have seen two divisions raised to five during the last few months. That means an enormous increase. It is bound to take time before they settle down, but I believe that in that reorganisation the sappers will eventually have to become gunners. This may be rather army chat, but I am informed that you will not get the sappers to become gunners. They simply refuse. If that is so you will lose hundreds, perhaps thousands of really skilled soldiers, with technical knowledge of anti-aircraft defence, who will not carry on. If it were possible to form an anti-aircraft corps of its own of neither gunners nor sappers, every single officer, non-commissioned officer and man would remain, and that would mean increased loyalty, enthusiasm and esprit de corps.

Let me say a few words about the Territorial Army. I speak as an ex-Regular officer and a Territorial officer, and I am fully convinced that the Territorials are equal to their job. In many ways they are more suited to it than the Regular Army, because of the technical knowledge they possess. You get skilled electricians, men in civilian employment at several hundred pounds a year, skilled mechanicians and that kind of labour that would not join the Regular Army, available for the Territorial Army. Moreover, the Government get their services practically free. The Territorial Army of to-day is very different from what it was a few years ago. There are keenness and efficiency second to none. There are officers who do not merely turn up two nights a week, but every day there is training going on, and every week-end. The improvement in efficiency and the keenness have been largely brought about by the new proposals made by my right hon. Friend the Secretary of State for War. He has raised the status of the Territorial Army to that of the Regular Army and it has responded well. He has increased the allowances, improved the conditions and opened up the Staff College and the Imperial Defence College. I am sure that if there are any soldiers present they will know what pride the soldier takes if he has been able to pass through the Staff College and the Imperial Defence College.

These points have been of the greatest value in encouraging recruiting. To sum up the proposals I have mentioned, there must be increased training grants, and we must have a permanent staff to look after our valuable war material. As a result of these improvements we are going to have an Army for efficiency and keenness and cheapness second to none. In the near future, whatever party we may belong to, we all hope to see the nations come to their senses and a limitation of armaments, and the soldiers will join in that. Then, whatever Government is in power will have to decide what is the minimum force that we must retain. I beseech the Government and the Minister responsible, when that day comes along, let them by all manner of means cut it down to the smallest number necessary for the defence of the country, but let them treat the Army well. Do not let them do what they did after the last War, have them ill clad, ill nourished, disheartened, even taking away the camps from the Territorial Army. Let them treat the Army as a career that is honourable and necessary to the country and, if they do that, I am convinced that they will be well repaid should a crisis arise in future, and my right hon. Friend will find that the nucleus will form a trained personnel for any future emergency.

8.2 p.m.

Mr. Edwards

There seems no point in discussing why we want this vast sum of money. The House seems to have been mainly concerned about efficiency and getting value for the money. That is a vital point. The Financial Secretary to the Treasury last night said: I sometimes think it is a very lucky thing for some of the profiteers in the last War that those of us who took part in the last War were so pleased to get home, when we did get back, that we forgot what we said we would do to the profiteers when we were in France."—[OFFICIAL REPORT, 20th February, 1939; col. 158, Vol. 344.] The Financial Secretary is now at home, with his eyes wide open, and I should like to draw his attention to one or two things to which he can apply his heroics. I drew attention to a matter in the House two years ago. I remember the Prime Minister telling us that we must have vast sums of money for rearmament and he said they were determined that the national necessity should not be exploited for private gain. I believe those words were repeated last night. I put a question to the then Prime Minister and the present Prime Minister, then Chancellor of the Exchequer, drawing attention to certain figures given in a reliable journal which said patriotic citizens, responding to the appeal, had provided £7,000,000 by public subscription for the production of airplanes and out of that sum more than £6,000,000 went directly into the profiteers' pockets and less than £1,000,000 into the production of airplanes. I asked the two Ministers to correct it if there was any doubt about the figures, but they have never been questioned. That is very significant, because the Parliamentary Secretary said that in estimating the profits on present contracts they would take into consideration the capital used. I want to know just how they arrive at the capital that is employed. Has all the exorbitant inflation of capital in those early days got to bear its interest in profit on the price of present contracts? If so, I do not think that the Prime Minister of that time or the Prime Minister of to-day is keeping his pledge to the country. The figures were bad enough which showed profits ranging from 25 to 45 per cent, made by airplane manufacturers.

This is not the first time the question has been raised. The Minister for the Co-ordination of Defence a week or two ago wrote to me and asked for particulars of these figures. I sent them and asked if I might put a question so that he could easily confirm or deny them. I think it is time that some statement were made as to whether £6,400,000 out of the £7,000,000 provided by patriotic people for the production of aeroplanes went into profiteers' pockets. I want to deny that as readily as any one on the other side if it is not true but, if it is true, the Prime Minister, or someone responsible, has a perfect right to make a statement about it, because it is a disgusting thing which nobody wants to countenance. We must not be too lenient with these people, and the Prime Minister and the Chancellor of the Exchequer must not think they are going to be too patriotic. I remember the present Prime Minister, when Chancellor of the Exchequer, telling us he had to introduce a new form of taxation so that those who made the greatest profits would bear a greater burden. He said he was sure that his patriotic fellow-countrymen would gladly make that contribution. Did they? Within five minutes of his Sitting down he was told by a Member who represents financial and industrial interests in the City that he could not get away with it and of course he did not do it. One wonders sometimes who really governs the country. Although he claimed that his patriotic fellow-countrymen would gladly pay the contribution he said he was also introducing some new legislation to catch those very people who were diddling him for £6,500,000. He said he had to catch the tax-dodgers by new legislation, and £6,500,000 was being evaded by these very people.

There is one very important matter that the House ought to consider once more. Every one is concerned to-day as to whether we are going to have adequate supplies if we were suddenly plunged into war. Provision is being made for the storage of food at very considerable cost. We already know that we shall require very much more shipping than we appear to have available to compensate for the heavy losses. Yet no one seems to think it necessary to have stocks of iron and steel. When the last war broke out we had not got very considerable stocks of iron, and within the first month the whole of the Lorraine district had its blast furnaces smashed to pieces and France had to depend for the rest of the War on this country to supply her with pig iron. Up to December, 1937, no one could buy any pig iron. I had to pay a premium of 20s. per ton. Yet in December, 1937, demand had fallen off, supplies had overtaken demand, and actually we were putting blast furnaces out, and within six months we had put out 26. It is positively criminal to have a single blast furnace out of commission. You have not got stocks more adequate than you had in 1914, yet you can have stocks of everything else you want but if you have not pig iron you have lost the war at the outset. I do not want the Parliamentary Secretary to tell me that we do not manufacture aeroplanes of pig iron, as he did last time. I want a better answer than that. You do not make aeroplanes in foundries, but I should like to know just how you get the other things that you require for aeroplanes if you do not have the pig iron.

There is another point. In the last War the first Zeppelin attacks were made on the North East Coast. Providentially they never hit one blast furnace, but no one thinks they will not hit them next time. We are not going to be so fortunate as that. Yet, with all the other things the Government is doing, it is deliberately neglecting this, and unemployment in my constituency in the last 12 months has increased by 50 per cent., and we are told we are in imminent danger of destruction. If these furnaces were destroyed within the first month or two we could not recover and we should have lost the war. There are 600 to 1,000 men deliberately put out of work. I went to see the Minister for Co-ordination and put this to him. He did not seem to know the difference between pig iron and steel. It was all foreign to him. I showed him how at a cost of £5,000,000 at the outside—that is not much when you are talking about £800,000,000—we could get these blast furnaces going day in and day out. Not a man should have been out of work, yet 26 furnaces went out and not one is relighted yet. What is the sense of this? If the Government are really alert and intent on making the country safe, let them say at once to the blast furnace people, "Keep your furnaces going at full strength and we will indemnify you against any loss." But there is no chance of a loss. Prices will increase, if anything; they will not go down. Then all these men can be kept at work full time. It is not good enough to tell us about all the dangers to which we are to be subject, and to neglect a matter like that. It is such a little thing. It requires only a little common sense. There is not a Member who cannot see how absolutely essential it is.

Yet another thing. I am not satisfied, and I do not believe a member of the Government is satisfied, that we shall not be in serious difficulties with regard to supplies of oil. Not a ship, not a tank, not an aeroplane can move without oil, and we have not got adequate supplies. We know the losses there will be among the tankers. We know the convoys that will be required to bring those tankers to this country. When we pressed this matter we got a Commission appointed to inquire into the matter. Some of us have been pressing for the production of oil from coal. We have the greatest oilfield in the world in the coalbeds of this country. All of that coal can be converted into oil, yet nothing is being done about it. Some provision is being made for storage, but there is no member of the Government who dare get up and say that he is satisfied that if we got into difficulties in the next twelve months we should have enough oil. We should not. For years we have been pressing the Government to do something about producing oil from coal. That would not only have done much to make us safe, but it would have done much to solve the unemployment problem and the problem of our distressed areas. It is true that the Commission reported against the proposal; but what was the Commission? It was the voice of Lord Falmouth, but it was the hand of Lord Cadman. The oil interests in this country have made tremendous profits, and these people would not put the safety of the country first; they put their profits first. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) told us once in this House that Germany was defeated in the last War ultimately by an oil sanction. What has Germany done about it? She is producing more than 50 per cent. of her total requirements of oil from coal. And we are not producing 5 per cent. That is criminal neglect.

Mr. Fleming

Will the hon. Member tell me at what cost per gallon the Germans are producing oil from coal?

Mr. Edwards

Will the hon. and learned Gentleman tell me whether that matters? What is the cost of the proposal we are discussing to-day?

Mr. Fleming

Is the hon. Member aware that we are now discussing a Money Resolution?

Mr. Edwards

What is the money to be used for, anything that will return interest to the country, or dead loss? Of course, it is all dead loss.

Mr. Fleming

At what cost per gallon could the hon. Member produce oil from coal in this country?

Mr. Edwards

We are not without information on this. We had in my party a committee which studied this matter very carefully, and there is not a known method of producing oil from coal which was not studied. The facts are all contained in a pamphlet published at Is. With due modesty, as a member of that committee, I must say that I think it is the best thing we have published. Imperial Chemical Industries are making a profit on oil from coal. If we had 20 plants we could produce what oil we required. That would cost about £100,000,000. The Exchequer would lose about £32,000,000 a year; but is that important when we are talking about national safety? We have to make some sacrifices if we want to be safe.

Another point is very important. If it is important to store up food and other things, it is important to store up health. I wonder whether the House has forgotten that when we were appealing to people who had no other jobs to join our Forces, the Secretary for War told us that six out of eight applicants had to be rejected because' they had been starved. They called it under-nourishment, but starvation is what it means. Would it not be a good time now for hon. Members opposite to withdraw the means test and invest a little in national health? The Prime Minister did me the honour of making his first public speech as Prime Minister in my constituency. It was a great honour, which I appreciated very much. He addressed a very large assembly at a beautiful country mansion on a perfectly gorgeous day. Of course we all brag a bit at these meetings. He said: I think we can now say that we have solved the housing problem "— this will give the measure of the desire of the present Government to solve the problems of the people. He went on to say— with the exception of"— what do you think he excepted?— the slums and overcrowding. I wish the Prime Minister had been here; he has probably forgotten the speech, and I expect he would hardly believe his own words. I had to look it up in the "Times" to be sure. That is an indication of how significant the problems of the ordinary people are to the Government. Now they say they are going to spend these vast sums of money to make the country safe. What will they do for the health of the people? Very little It has been well established that there is a shortage of shipping. My constituency was once a great centre of shipbuilding. There is provision in this Resolution for transport of foodstuffs, etc. My constituency is anxious to build ships for this nation, it has thousands of trained men waiting to build ships, and £7,000,000 worth of orders are going to Germany for ships while our yards are entirely empty. The people of this country cannot be convinced that the conditions are so serious as the Government profess if the Government will not take these first steps to utilise the productive capacity of the country.

Why is it that we have to spend all this money to provide vast armaments to protect ourselves from armaments which other countries have, but which they could not have had if we had not supplied the raw materials? When is the House going to face up to this? Some experts have established that, in order to manufacture these armaments, 22 raw materials are absolutely essential, and of those the British Empire has adequate supplies of 18, America of 12, Germany of four, Italy of four, and Japan of four. How is it that the three nations which we now admit are the only menace to the peace of the world, can buy these raw materials and so make us spend £800,000,000 on defending ourselves? The Prime Minister brought up this matter by saying that we had greater economic resources than any other country in the world, and he was prepared to use them. Is he prepared to say now that he will refuse to supply raw materials to other countries for the purpose of building up vast armaments? They cannot build without these materials. Two days before Germany was supposed to be going to march into Czecho-Slovakia a cargo of 4,000 tons of copper left a Canadian port for a German port—copper which would have been converted into munitions of war to be dropped over here while we scuttled into our rabbit holes. What sense is there in it? Why cannot we take hold of this at the right end.

Lieut.-Colonel Dower

Surely, you could supply any country that might be an aggressor with really strong grounds to declare war or to say that they must have their own Empire?

Mr. Edwards

I would rather that they declared war against us without our materials rather than with our materials. It is a very old argument to say that if we refuse to supply them with munitions of war they will declare war against us. It seems to be very illogical to me. We have had statistics for many years back to show exactly what was required for normal requirements of this country. Countries like Germany, Japan or Italy take from us supplies of nickel, copper, rubber and tin. If they took 10 per cent, more than normally I should say that it was good business, if they took 20 per cent, or even 50 per cent. I should say it was very good business, but if they took 200 or 300 per cent. more than normally, I should know what it was for and refuse to let them have it. We cannot get enough for ourselves. I hope that the Government will use this £800,000,000, if it is to be used, for defence and in the interests of those poor people who still have no jobs. When the Prime Minister stated that the Government had solved the housing problem there were 2,000 families in my constituency who had no homes to go to that night.

Sir John Haslam

I wonder how the hon. Member would prevent the Dominions from supplying these 22 items which are not produced in this country but are produced in the Dominions? Does not he realise that the Dominions are self-governing and masters in their own household?

Mr. Edwards

I am not suggesting compelling them, but I am assuming that they are just as loyal to the Empire as we are. We have always had that assurance from the benches opposite, and if they are as loyal as we are, they are not going to supply armaments to a foreign country in order that it may attack the Mother country. We ought to have the courage and intelligence to deal with that problem in order to prevent these people from getting materials from abroad. Neither Japan, Italy nor Germany has oil, they must import it.

Sir J. Haslam

I am not criticising the hon. Member, but I am anxious to learn whether the fault lies on our Government Front Bench, or whether he had better not preach the doctrine which he is preaching to the Dominions themselves.

Mr. Edwards

I do not care who does it. If the Dominions Secretary is here and likes to discuss this matter with the Dominions, I should not mind a bit. I was quoting from authorities. I do not know first-hand any more than the hon. Gentleman himself, but I believe what I say is perfectly true. We could prevent any nation in the world from making war, certainly with the assistance of America we could, and we are assured that we have the good will of America now. I have spent a lot of time in America and can speak of the good will which is felt towards this country. I wish that we had the respect for America that Americans have for us. They love everything British. If the English-speaking peoples declared for peace in the world, no combination of nations could make war. They could not buy their materials from English-speaking peoples, who control 75 per cent. of the world's supply of raw materials. You cannot have the profits of war and at the same time establish peace. I refer again to the profits made by the aeroplane manufacturers. I will repeat the figures so that they cannot possibly be forgotten. Out of the £7,000,000 supplied by patriotic people in response to the Prime Minister's appeal, £6,400,000 went directly to profiteers, and £600,000 only to the production of aeroplanes, and that perhaps accounted for our very bad beginning in the production of aeroplanes. I appeal to whoever is to reply to say something about that matter

8.31 p.m.

Rear-Admiral Sir Murray Sueter

I share the anxiety of the hon. Member for East Middlesbrough (Mr. Edwards) as to the oil reserves in this country. During the crisis it cost me a great amount of thought. I have written one or two letters to the Press and I have asked whether the Government would not go into the whole question of the transport services of this country to see if they can save oil by substituting electricity, as in the case of trolley 'buses, and of electric batteries for small cars, and of producer-gas and household gas. They should go into the whole question and see if they cannot develop transport more on these lines without depending so much upon oil. In war time the Navy, Army and Air Services will require a tremendous amount of oil. Our oil supplies will probably be cut for internal transport, and there will be a vast amount of confusion. It will be detrimental to the supply of munitions if the internal transport fails, because men cannot be conveyed long distances to the factories, and so on. I ask whoever is to reply, whether we cannot have an answer to this question. I have never yet been able to get an answer in this House as to who is responsible. Does the Minister of Transport confer with the co-ordinating Minister, and do they both go to the Chancellor of the Exchequer and ask for some reduction in taxation to encourage the people who are interested to develop other schemes of power for internal transport.

I was very glad to hear my hon. and gallant Friend the Member for Penrith and Cockermouth (Lieut.-Colonel Dower) tell us that he was very satisfied with his anti-aircraft unit, and, having had something to do with creating the Anti-Aircraft Corps of London, I was very much interested, particularly when he said that he had very few on his staff to look after his equipment, his searchlights and other instruments. You must have skilled people to keep these instruments in proper working order. I support what he said about seeing whether the Army could not supply proper people to look after these expensive instruments.

I am sure that everybody who has studied our defences welcomes this White Paper. It covers a great deal and shows that we are making satisfactory progress in the rearming of the Navy, the Army and the Air Force, and it reflects some of the work of the former Minister for the Co-ordination of Defence, the right hon. Member for Fareham (Sir T. Inskip). He put a tremendous amount of work into this rearmament, and this Committee should recognise his work. He came to his office at a very difficult time. We heard in Debates at the time in this House that six weeks before he was appointed, the Chief of Staffs Department was not functioning properly, and he had to get these services together, and I believe that he did great work in making them more efficient.

I am certain that everyone in the country will welcome what is being done for air expansion. The present Secretary of State for Air is to be congratulated on having doubled the production capacity of our factories in the last year. The right hon. Gentleman is a skilled administrator. He did wonderful work at the Post Office, and he is showing the same skill in the way he is now conducting the affairs of the Air Ministry. But when we pay a tribute to him we must also pay a tribute to Lord Swinton for starting the first four shadow factories. They have been doubled now, and I hope the number will again be doubled so as to compare with the capacity of Germany. We must also remember that Lord Londonderry as Secretary of State for Air was re- sponsible for getting approval to the first expansion scheme for the Air Force and did great service for air development.

I want to touch upon the important question of the menace of the submarine. It was referred to yesterday by the hon. Member for Berwick (Sir H. Seely). I agree with everything the hon. Member said. I believe it has escaped the notice of many hon. Members that Germany is now asking for parity with this country in submarines. They say that the international situation forces them to do so. Germany has now 15 ocean-going submarines, 24 sea-going submarines and 32 of the coastal type. These are the figures I make out, and it gives a total of 71, with a total of about 31,000 tons. Our total is about 74,000 tons, so Germany has 43,000 tons to make up. She is within her rights in making this demand under the Anglo-German Naval Agreement of 1935. If she builds larger submarines like our own she can build 28, and that will run her tonnage up to 99,000 tons. We have 69 submarines in this country. In official circles and also in the Press it is thought that we are dangerously under-estimating the submarine menace.

In the last War Germany started with only 28 submarines, and during the whole of the War I do not think she had more than 30 submarines in commission and on active service at one time. They sunk nearly 11,000,000 tons of Allied shipping, including 6,750,000 tons of our shipping, colossal figures. Admiral Mark Kerr, a distinguished naval officer, who has never received the recognition he should have done for his war services, tells us in his book, "Land, Sea and Air," that in 1915 the German submarines were sinking in the Mediterranean £2,000,000 worth of cargo per day. I have been privileged to see the maps of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) of the sinking of ships in the Mediterranean and also the maps prepared by Admiral Sims, of the United States Navy, as to the sinkings around the Irish Sea. A colossal number of ships were sunk. In this White Paper we are told that the counter to this extra submarine menace is that we are to have two destroyer flotillas, 20 fast escort ships and perhaps a few minor ships. I want to ask, is that enough? I submit that it is not when you take into consideration the number of ships which were sunk in the late War. What the German submarines hated most of all was being spied upon by our seaplanes and small airships. We built over 200 small airships in the late War, coastal airships and the North Sea type of aeroplane. They patrolled all round the coast and wherever they were used we never lost a single food ship or a ship carrying materials for our factories. They were always on the move and were better than seaplanes, because they could hover; they could come down and watch for submarines. I want to give the Committee the opinion of a writer in "Blackwood's Magazine," who, just after the War, wrote a series of good articles. In April, 1919, in an article on the "Story of our Submarines," he said: The Germans stated that what they disliked most in the Irish Sea area were the airships and the seaplanes which were always passing over. They did not fear the bombs these craft carried, but they did dislike having their own position continually reported to the surface patrol, because as a result they got little rest. There is no doubt that the moral of submarine personnel is much affected by the continual nerve strain. I asked the Secretary of State for Air in a room downstairs whether he could not provide a few small airships for the training of airship crews. I know that the chief of the Admiralty staff has seaplanes ready to carry out an anti-submarine patrol, but if we had a few of these airships as a nucleus then if war came we could expand them in exactly the same way as we did in the Great War. It may be said that these small airships filled with hydrogen are easily attacked. We cannot get helium from the United States; they will not supply it for any weapons of war, but we can get helium in Canada and from the pitch lake in Trinidad, but it is very expensive, and I would suggest that the Secretary of State for Air should offer a prize of £5,000 to enable scientists to investigate whether they can produce a gas which is not inflammable. Everyone knows that hydrogen has a lifting capacity of 70 lbs. per 1,000 cubic feet, and that helium has a lifting capacity of 62 lbs. per 1,000 feet. If we could get a gas between helium and hydrogen with a lift of 66 lbs. per 1,000 cubic feet and non-inflammable it would make these airships much more valuable. I hope the Under-Secretary of State for Air will ask the Minister to consider whether he cannot supply some of these airships for the anti-submarine patrol.

I pass from small airships to the Fleet Air Arm. The gallant Admiral of the Fleer, the hon. and gallant Member for Portsmouth (Sir R. Keyes) and I have had many words across the Floor of the House about the Fleet Air Arm. Now it is settled, and everything is forgiven. The gallant Admiral spoke yesterday and said that there were great delays in the Air Ministry supplying what the Admiralty required. I shall not make many more speeches in this House.

Sir J. Haslam

Why not?

Sir M. Sueter

Because I am leaving. I beg the Air Ministry to try to meet the requirements of the Admiralty. Friction between the Admiralty and the airmen has gone on far too long. The Admiralty treated their airmen very badly indeed, and they threw overboard the Royal Naval Air Service; but we forgive them that, because now they are creating a great Fleet Air Arm and getting thousands of men and a good number of officers into it. They are doing exactly the same as was done in the old Royal Naval Air Service, and taking pilots from outside, and so on. All this only shows how stupid they were ever to have scrapped the Royal Naval Air Service.

The hon. and gallant Member for Bury St. Edmunds (Captain Heilgers) complained yesterday about the shortage of tanks. As one who had a little to do with the introduction of tanks in this country, I was very much alarmed to see in the "Daily Telegraph and Morning Post '' of 20th February, that the number of tanks we are supposed to have in this country, according to a German account, is only 600, while France has 4,500 and Italy 1,100. If we are to send an army to the front, as we did before, I submit that we ought to have a larger number of tanks. I hope that the hon. Baronet the Financial Secretary to the War Office will take note of this and also of what was said by the hon. and gallant Member for Bury St. Edmunds (Captain Heilgers) about the shortage of tanks.

With regard to the new Minister for the Co-ordination of Defence, it is a great compliment to the Navy that the Prime Minister has chosen an Admiral to fill that important post, and I hope that Lord Chatfield will do well in it. He has a difficult task, but he will have my support, and I hope the support of the Air Committee, of which I am chairman, all the time I am in the House. I would like the Minister for the Co-ordination of Defence to look into one matter. I would like him to overhaul the whole of the machinery of the Committee of Imperial Defence. They have a very large number of sub-committees. They have subcommittees for strategy and planning; the organisation for war, including civil defence, home defence; censorship and other emergency legislation; the manpower group; the supply group, including munitions, food and oil; the miscellaneous group, including research and experiments. The right hon. Gentleman the Member for Carnarvon Boroughs always said that the Committee of Imperial Defence had a regular warren of sub-committees. The new Secretary to the Committee of Imperial Defence, Major-General H. L. Is may, was speaking at a meeting of the Royal United Services Institution the other day, and he said that last year they had 409 meetings and 876 persons attending them.

Do not hon. Members agree that it is absurd, in these days, to have all these committees and sub-committees looking into matters, and causing one delay after another? I am certain that almost every hon. Member receives letters from his constituents complaining of some delay or another in getting this or that decision. Of course, decisions cannot be obtained quickly when the Committee of Imperial Defence have 876 people to consult in a year. Therefore, I ask Lord Chatfield to look into this matter and to see whether he cannot clip out some of these committees. He has an assistant now in the person of the Chancellor of the Duchy of Lancaster. Surely, the Minister for the Co-ordination of Defence and the Chancellor of the Duchy of Lancaster can take on some of the responsibilities themselves, and get two or three people to assist them. In the dictatorship countries, there is one man who says "Do the work" and another man who says "Why do you not get on with it?" and so on. In this country we waste all this time in getting decisions from one committee after another. I am certain that the commanders-in-chief hate being governed by committees composed of a lot of subordinates, who will not take any responsibility for anything that goes wrong, but hide behind committees, so that the commanders-in-chief do not know with whom they should consult. It is very important that we should reduce the number of these committees as much as possible, and if we do not, we shall be outdistanced by the dictatorship countries which come to decisions so rapidly.

I was very glad to hear the right hon. Gentleman the Leader of the Opposition say that he believes in a Ministry of Defence. I have believed in that for the last 18 years, and spoken in support of it whenever I had an opportunity of doing so. The only way to run the Fighting Forces of this country with efficiency and economy is to have a Ministry of Defence. I ask hon. Members of the Socialist party, when they come into office, to see that the Leader of the Opposition does what he has said he believes in, and creates a Ministry of Defence.

8.52 p.m.

Mr. Edmund Harvey

I ask the attention of the Committee for a short time while I attempt to express the point of view of a very small group of Members whose standpoint on these questions has, from time to time, been put with impressive earnestness and eloquence by the right hon. Gentleman the Member for Bow and Bromley (Mr. Lansbury). We believe that the methods of war cannot abolish war or prevent the dangers of war, and that the truest measures of defence must be those which seek to remove the causes of war, the suspicions, the misunderstandings and the fears that separate nation from nation, and that have been brought about in some cases by unjust or inapplicable treaties, and in other cases by a lack of economic opportunities or other opportunities of development.

I have listened to most of the speeches that have been made during the two days of this Debate and I have been impressed by, and I am thankful for, the fact that there has been so little sense of anything in the nature of exaltation at the immensity of the force that is being prepared. I believe all those who are advocating it are doing so because they feel it to be a terrible necessity, a duty that is laid upon them, and not as something about which they wish to boast in any way. That is something for which we may be profoundly thankful. I am grateful, too, for some of the words that have been spoken by the Prime Minister. I appreciate the intense sincerity of his desire to bring about peace in our troubled world, and the great effort he has made, at great cost, to make a real contribution in that direction. I hope that he may not only appeal to Members of the Opposition in connection with the structure of the League of Nations, to abandon the idea that peace can be imposed by force. I hope that he will go as a missionary with that thought to other nations. If we could get a general abandonment of that idea among the great armed nations of the world, we should indeed be at a turning point in human history.

I think, too, that we must be grateful for the tone that he has adopted when, either as Chancellor of the Exchequer or as Prime Minister, he has had to deal with the grave question of the increased Defence Estimates. He has at least on one occasion spoken of his sense of shame at the thought that civilisation has come to this position. The position taken up by our Prime Minister does, I think, give encouragement and hope to all those who are looking for a turn in the thoughts of men in the direction of peace. I wish that when he referred to the possibility of some conference in the near future which might call a halt to this race he could have been more hopeful. I recognise all the difficulties in the way of such a conference at this moment. I believe, however, that it is only by way of a conference that this immense problem can be solved and that there is a danger of putting off the time until a more favourable opportunity arises and that while we are putting it off the storm will gather and burst upon us before the moment for which we are looking can arrive.

I want to ask the Minister who will reply whether it is possible to go a little further in the direction which the Prime Minister has indicated. President Roosevelt has already stated that he would be willing to join such a conference. The Prime Minister approves the idea. We know that in every nation there are anxious hearts longing for the coming of the better day, and the statesmen who would make the proposition would find a response, I believe, in every great nation of the world. Someone must make a beginning. Could we ask for a greater honour for our Prime Minister than that he should be the statesman to call the nations together for such a conference? I recognise all the difficulties. It may be pointed out that we tried for years and the last disarmament conference failed. That was a conference very largely dominated by experts. It is always the business of the expert to fight for the particular service in which his own country is most efficient. That was done by every country at that conference. It will be necessary, if a conference is to succeed, that the statesmen should go there, not to ignore the opinion of their experts, but to go above it, if necessary, in the name of the people as a whole. The last disarmament conference also dealt with the problem of disarmament in isolation from the grievances which the dissatisfied nations felt. We cannot hope for an effective settlement unless either in one conference, or in a series of conferences, or in concurrent conferences, a real peace settlement is attempted which will deal effectively with the grievances that now separate nation from nation. I would beg the Ministry not to turn their backs upon the calling of a conference of this kind, but to make every effort to make soundings—if necessary in private—but to go on making them in order to prepare the way for a wide conference of this kind.

The alternative has been indicated by the Prime Minister. He told us in that moving close to his speech that we are in the midst of a process which must end in the bankruptcy of the nations of Europe. He wants that mad race to stop. We all want it to stop. Surely there is no nation that wants it to continue to its terrible end. It might not merely end in bankruptcy. It might mean, in all probability, that the time would come, as it came in 1914, when the strain was too great. The Prime Minister has already quoted the memorable passage of Lord Grey in which he described the effect of suspicions caused by the growth of armaments, when although on different sides the growth was honestly intended for self-protection only, yet it was interpreted by others as being an act of aggression. In another notable passage Lord Grey, looking back upon the War, declared that he believed that the great cause of the War was the growth of armaments, and the suspicions and fears that were caused by that growth.

That process is going on now, and it must be stopped if civilisation is to be saved. It seems to me that we are like a village built on the side of a volcano. Our work and daily life go on, and all the while this terrible menace is there. It is not in this case, however, against the uncontrollable forces of nature that we have to make our plans and preparation. This terrible volcano has been made by man, and what men have made they can unmake if they will take the way of reason, the way of right, the way to which all that is best within us prompts us. I would, therefore, appeal to the Government once more to go on seeking the first opportunity that they can find for such a conference as I have indicated in order that we may get, not just a halt and a slowing down in the race, but a turning point which will take us back to a Christendom that at length shall be worthier of that great name.

9.4 p.m.

Mr. Poole

I have sat through the major part of the two days' Debate and I must confess that it has filled me with tremendous gloom. We have talked almost casually in this Chamber of the colossal rearmament programme and the almost inevitability of a war which we fear must come, and which we hope and pray may not come.

As a young man who in the years gone by visualised a progressive building up of our civilisation and an improvement in the lot and conditions of the people, I am appalled when I consider it in the light of the steps we are now taking for it seems we are mortgaging all our hope for the future of building up a better civilisation and standard of life for everyone. The Chancellor yesterday said that it would have been inequitable to do anything other than to borrow, and that future generations would agree that we had taken the right course. Perhaps it was inevitable that a considerable proportion of such a large sum must be found by borrowing, but I do not agree that future generations will feel that we have done the right thing, because it seems to me that we are mortgaging their right to do the things and to build up the life which they would like to create for their people. We are in effect placing them in a bondage and imposing upon them such a colossal burden of debt that they will not be able to do those elementary things they would like to do for their children and the great mass of the people.

We are, in effect, debiting children who are yet unborn with the folly of our own generation, because as the hon. Member for the English Universities (Mr. Harvey) said it is not because of some divine dispensation that we face our present position. We face it because of the colossal folly which is ours, because we have failed to take advantage of the opportunities presenting themselves, in season and out of season, to build up a real order of society based upon sanity rather than brute force and aggression. The Prime Minister chided the hon. Member for Bishop Auckland (Mr. Dalton) with the fact that though our party has been actively identified with and continuously supported the League of Nations there was no mention of the League of Nations in his speech. I thought that observation was quite unnecessary, because he must know that even if he and his party have renounced faith in the League of Nations, that there are still those who believe that it is the sole hope for the creation of a real order of society, and if he himself has lost that faith there are some Members of his Government who still cling to it, or, if they do not, are hypocritical in the statements they make in the country.

I have here a cutting of a speech made by the Financial Secretary to the Treasury in Harrogate the week before last. He said in that speech that he remained a positive and sincere supporter of the League of Nations, and he believed that sooner or later they would have to create a further League because it seemed to him that something of that kind was the only alternative to another world war. The Financial Secretary to the Treasury probably thought he was safe when he made that speech in Harrogate. We should have liked to hear that speech made repeatedly, in the months and years that have gone by, from the Front Bench opposite, and liked to see that faith exhibited in an effort to rebuild the League and to make it the effective instrument for the preservation of world peace which it might have been with any real will to make it so. The Prime Minister said this afternoon that not for one moment did he charge the Opposition with desiring war or with being a war-mongering party. Here, again, we find a marked difference between him and one of his colleagues, the Financial Secretary to the Treasury, because in that same speech at Harrogate the Financial Secretary was speaking on these lines. Referring to our party he said: In 1933 they advocated a general strike if the country were involved in war, In 1934 they took the line that we should send forces to fight in any cause for which the League asked our support. That was a tallish order, but it might at any rate have been tolerable or reasonable if at the same time the Socialist party had pressed the Government for a large increase in our fighting forces, but they did not, and even voted against a modest increase. He concluded with these words: I do not think that it is overstating the case to say that if we had had a Labour Government during the time the National Government has been in office we should have been involved first of all in a war with Japan, secondly in a war with Italy, thirdly in a European war over Spain and, fourthly in another European war over Czechoslovakia. That may be a very nice party political speech to make to a gathering of one's friends in Harrogate, but it does no credit—[Interruption]—as an hon. Friend of mine said, he should have "tipped" the reporters—to the responsible Minister of a Government, who knows that such a statement is a gross misstatement of the actual facts. To-day we face a position in which the decision as to whether there shall or shall not be a war does not rest with us. In September what was the position? I think the Foreign Secretary adequately summarised it when he said in another place: Make no mistake about it, had it not been for the action of Dr. Benes we must have faced a major war, a European war. That means that the question whether there shall or shall not be a European war rests not even with the Great Powers of Europe, but that in September at least it rested with the head of one of the smaller States in Europe who had to decide whether he would acquiesce in the dismemberment of his own State and the end of his own political career. That was the position in September, and apparently it seems to be the position in the chaotic order of things in which we now are.

I have one or two words to say upon the armaments expansion programme of the Government. We have had various references to profiteering. Perhaps it is easier for Members of the Government who are more in contact with the commercial life of the country to accept the position that large profits are being made and not to call it profiteering. I, personally, think it is immoral that there should be any profits in the armaments industry, and view with grave apprehension some of the things which are obvious in the present rearmament programme. I will refer to only one incident which I think it will be agreed by every hon. Member does not reveal an excess of patriotism on the part of those concerned. The Government launched a scheme for the erection of shadow factories and accepted an offer by Lord Nuffield to co-operate in that scheme. Of all the land which is available in the country apparently the only piece on which Lord Nuffield was prepared to establish his aircraft factory was at Tyburn in Birmingham. This land had been bought by the Birmingham Corporation from the Dunlop Rubber Company at £350 an acre for the purpose of building houses. There was a restrictive covenant on the land that it should not be used for industrial purposes.

The Birmingham Corporation were approached by the representatives of the Government or by Lord Nuffield and asked whether they would sell this land for the purposes of an aircraft factory. Being a patriotic corporation they agreed immediately to sell that land for exactly the same amount as they had paid for it, £350 an acre. They pointed out that there was the restrictive covenant, which no doubt the Dunlop Rubber Company would be willing to remove in view of the urgency of the situation and the purpose for which the land was required. But what happened? Whereas the land cost £350 an acre the charge made by the Dunlop Rubber Company for the removal of the restrictive covenant and for certain minor easements and rights-of-way over sidings amounted to no less than £650 an acre. The extent of the patriotism in that case was to charge almost double the cost of the land for the removal of a restrictive covenant.

Things like that cause grave apprehension in the minds of hon. Members on this side and fill us with doubt as to whether the Government are exercising the necessary supervision over this phase of their activities. Having selected that site they have now secured another site, which is in my Parliamentary division, for the housing of the workmen who are to be employed in the factory. It is proposed to house the workmen at a place which is four miles away from the factory. Yet within a mile of that site there is an excellent municipal aerodrome, the aerodrome of the Walsall Corporation which has been established at considerable cost to the local authority, and at which any amount of land could have been made available for the building of this factory. There seems to be a lack of co-ordination in these matters. Many local authorities have expended considerable sums on the construction of aerodromes for which they have received only very small returns. I ask whether the Government will not endeavour to influence firms to locate new factories on the aerodromes of local authorities, so that those local authorities may receive some recoupment for their outlay. At the same time such a course would be helpful to the Government's own scheme.

The question of food storage has been dealt with from many parts of the Committee in this Debate, and I have only one observation to make upon it. Appeals have been made by responsible Ministers, exhorting tradesmen to store up large supplies of food in the event of an emergency. I wish to put in a word for the small trader. Are the Government prepared to grant credit facilities to small traders? Tradesmen in a small way of business have not the necessary capital at their disposal to enable them to procure stocks, and they will be placed at a decided disadvantage should an emergency arise, because large combines will be in a position to store up large stocks and hold the small men to ransom. I think it is a reasonable suggestion that the Government should afford credit facilities to small traders so that these may play their part in the storage of food for the people.

Then I would ask whether the Government have really worked out, in detail, schemes for the evacuation of the civil population, or whether they have merely arrived at the point of saying that they propose to evacuate so many thousands here and there? That will not be of much use if we should arrive at a crisis. I find that it is proposed, for instance, to evacuate 200,000 sick people from hospitals within the first 24 hours of any emergency. Can we visualise what those 24 hours will be like? Then there will be hundreds of thousands of school children to be evacuated in addition to the sick people. All forms of transport will be commandeered if there is an emergency, and unless the Government have perfected their evacuation plans, so that each schoolmaster will know exactly where the vehicles for the transport of the children are to come from, and where the children are to go, we shall have complete chaos in connection with evacuation. It is abundantly clear that it will be necessary to carry out the evacuation as quickly as possible and to select the safest possible places to which to send the children.

The Financial Secretary to the Treasury yesterday made a statement on which I feel compelled to comment. He said that the sparseness of the attendance at the Debate, which has been very little improved upon to-day, was due not to apathy, but to the confidence which hon. Members generally had in the Government. I should think that the best way in which hon. Members could show their confidence in the Government would be to attend in their places on an occasion like this to give the Government their support. I attribute the sparseness of the attendance at this Debate not to confidence in the Government but to the fact that hon. Members realise the inevitability of this expenditure which has to be incurred because of the action of the Government. They realise that nothing which they can say or do will make any difference; that there is no other course for us to take, because we have drifted into the present position. If there were confidence in the Government should we have the complaints which we have heard tonight about the failure of National Service? Would not the National Service scheme have been a colossal success if there had been complete confidence in the Government? It is because there are such grave doubts in the hearts and minds of countless thousands of men and women throughout the country, that they are not prepared to line up even under a National Service scheme, without a clearer indication of a saner foreign policy being adopted by the Government.

I feel that we have now reached a position in which there can be no turning back. We have to go through with this thing, always in the hope that some day sanity will prevail. I would echo the words of the hon. Member for the English Universities and express the fervent hope that soon it may be possible for a world conference to be called when the nations will realise the foolishness of the paths which they are pursuing and will, in very truth, be prepared to beat their swords into ploughshares and their spears into pruning-hooks.

9.23 p.m.

Sir Edward Grigg

The hon. Member who has just addressed the Committee expressed the fear that the debt which we are about to sanction to-night might bind an intolerable burden upon our posterity. I venture to think that the real test of whether we are doing the right thing or not to-night, would turn on whether the expenditure which we are undertaking preserves the peace of Europe or fails to do so. If it preserves the peace of Europe, it will have justified itself, and the burden on posterity will not be great in comparison with the vast expenditure and the terrible ruin which otherwise we shall have to face. There is one aspect of the problem of preserving the peace of Europe upon which I should like to speak. More than one hon. Member has spoken of the Army from the point of view pf the part which it might play in war, if war were to come. I should like to refer briefly to the part which, it seems to me, the Army has to play in the maintenance of peace, for I believe that this Army question may prove to be the deciding factor in relation to the question of peace or war in Europe at the present time.

What is the danger of war in Europe at present? It is certainly not that any people want war. It is certainly not, in my opinion, even that any Government wants to provoke war. I do not believe that there is a Government in Europe which wants to do it. But there are Governments which are prepared to use other peoples' fear of war for their own purposes and to proceed by a process of intimidation and when there are Powers of that kind in the Europe of to-day, at any moment a situation may be created where the pressure placed upon one side by the other is too great, and neither side can withdraw. Therefore, the crisis is precipitated, which nobody really wants. I think it is for that reason that the Prime Minister had to tell us to-day—and I am sure he was right in telling us so—that the hope of a conference on limitation of armaments for the moment did not exist. Why does it not exist? The reason, in my opinion at any rate, is that there are Governments that believe that they have more to gain at the present moment from the process of intimidation than from the process of negotiation, and if you are going to create the conditions in which a conference can be held then you have to persuade them that the process of intimidation is not going to carry them any further at the present time.

It is from this point of view that the Army question seems to me all-important. I am not going to discuss for one moment the military arguments, because, in my opinion, the military arguments on the subject are not the important ones. Herr Hitler and Signor Mussolini are not military minds; they have had very little experience of military questions. They are not soldiers by genius in any way. What they are much more is great demagogues, both of them; and they have achieved all their success—they have achieved an enormous triumph—by their judgment of the working of nations' minds—their own and other nations'— and by the use which they have been able to make of mass feeling, whether it was mass enthusiasm or mass fear, as they were able to interpret it.

Military arguments have very little weight with leaders of that kind. They have shown again and again that they despise the opinion of the experts, whether they were soldiers or financial experts. They have taken their own course. Signor Mussolini took it once at the risk of war in the case of Abyssinia. Herr Hitler has taken it no less than three times against the advice of his experts, once in the case of the Rhine-land, once in the case of Austria, and once in the case of Czecho-Slovakia. That shows that you are not dealing with men who are influenced principally by military arguments. It is the psychological realm in which you are moving. I believe you have to look at the Army question from that point of view in particular, if your main object is, as it must be, to maintain peace.

What is it that the dictators count upon? They are counting undoubtedly upon the moral weakness that is felt by a nation or by a group of nations that is inferior in man-power, and in particular in trained man-power. That is the danger at the present time. These great leaders reckon their strength not only by armaments, but by trained man-power, because they think that trained manpower in reality expresses more than anything else the spirit of resistance which they may meet. I do not think there is really any doubt whatever about that. And that is why the existence of trained man-power is a vitally important factor at the present moment. We all know that the balance of trained man-power, despite the heaviest sacrifices which the French people have made, is against France. Her army is splendid; it is by far the best army in Europe to-day; but the balance is against it. It is three to one, if you take the two great Central Powers against France. And France is being driven now to extend the period of service from two years to two years and two months. She is calling up now her young men and boys. That is a process which, after all, can only be done once or twice. That is the process to which the French democracy is being driven at the present moment.

I think if we want to make sure of the firmness of France we should be wise at the present moment not only to promise but to have ready some greater military support. As evidence of that fact I might quote a paragraph published by the "Times" yesterday from its Paris correspondent, a telegram dealing with opinion on this subject in the French Left. I think attention should be paid to it here because it is a real index of opinion on the Left in France at the present time. This is what the correspondent of the ''Times'' said: It is becoming increasingly clear that while the moderate trade unionists are united in their dislike of Communist activities in the Confédération Générale du Travail and of attempts to use the organisation for political purposes, they are divided over the question of resistance to the totalitarian claims. A similar lack of unity on the same subject is to be observed in the Socialist party. … M. Blum and his supporters are in the majority, but their opponents nevertheless are numerous and important. Similarly in the unions the extreme pacifists are in a minority, but by no means a small one. That is a perfectly independent account of opinion on the Left in France at the present moment. Of course, France is not the only country where the people are showing a great revulsion from the thought of war. That same revulsion may be seen in Germany itself, and in Italy. Those manifestations of feeling are practically universal in Europe at the present time. But the serious fact is this. The dictators can ignore the existence of this kind of opinion at home while counting on it to weaken the democracies against whom they wish to press their case. That is the danger of the situation. And, therefore, it is absolutely essential that we should do our utmost to prevent the sense of the struggle not being worth while. There is one way to do that, and that is to have ready—not merely to promise, but to have ready—strong military support. And to prove what I say, that that is the factor which is really going to count in France, I should like to quote from two well known French writers, because as Members of this House probably know, the French Press is beginning to be very frank on this subject. I will quote two articles only, although there are many such. I quote first a very well known writer, M. Pierre Bernus, who writes in the "Débats," a moderate paper very much in the Centre: The moral and political aspects of the question are not the least important. From the moral standpoint there would be a much better spirit in France if the French soldier knew that he could count on real support from his English comrades. Nothing is more discouraging than the prospect of enduring the most cruel ordeals while your ally reserves his action for some future time. … It is, of course, necessary that France and Britain should so organise their forces as to be sure of ultimate victory. But they ought not to neglect another aim "— and this I beg to emphasise— that of preventing war by discouraging potential aggressors in advance….That is why Britain by temporising renders bad service to the cause of peace. That is a moderate French opinion to which, I think, we should pay attention at the present time. Now I will quote an opinion of the Right, that of M. de Marsilly in "Le Petit Bleu": The role allotted to France is to contain the aggressor for the six or eight months necessary to enable a British Army to prepare for participation in the fray…. Could we hold long enough? We would like to hope so; but there is no certainty that we can do so, and military experts admit that the problem abounds in unknown factors.… And even if we succeeded in the enormous effort of having ourselves massacred with sufficient endurance to give our allies time to come to our aid, would it not be better to spare ourselves that appalling sacrifice?… Britain can, if she likes, dispel the danger of war by adopting compulsory military training. But the calculation behind which she is at present taking refuge may well lead to bitter and costly disillusionment. I quote that French opinion because I think it ought to be stated and appreciated here, although I do not personally agree with all the conclusions that the French themselves draw. It will be said to me at once, "If you quote that French opinion, do you accept the thesis that military conscription should be imposed in this country at once, and that the whole of the manhood of this country should once again be committed to another series of Passchendaeles? Do you accept that?" I do not. I believe that, if we face this question in time, we can deal with it without military conscription. I believe, also, that if we face it in time we can save our young manhood from another series of Passchendaeles. But if we do not face it, then we shall have conscription, and we shall have another series of Passchendaeles.

9.38 p.m.

Mr. Alexander

We have come now almost to the end of the two days' Debate with regard to the proposals of the Chancellor to extend his borrowing powers for the purposes of defence. No one could grumble in any way at the manner of his presentation of the case from the point of view of lucidity and conciseness. I have read his speech very carefully, so that I might feel that I thoroughly understood what his financial proposals were, but when one comes to examine them in relation to the future, one moves away from the calm, concise and lucid statement of the Chancellor yesterday, and comes to feel that there are very great difficulties in front of us.

Since the Chancellor presented his case, there have been three outstanding contributions to the Debate. I think that the speech of my right hon. Friend the Leader of the Opposition this afternoon, which I hope will be printed and broadcast, is a statement that ought to be got home to the whole country. The second speech I would mention is one that received favourable comment from Members in all quarters of the House, namely, that of my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence). I wonder whether the Prime Minister, in view of what he said in the Debate to-day, will do us the honour of reading that speech again, because, although he was evidently impressed by the financial references in it, he did not, apparently, accept one of the most forensic indictments of the Government's foreign policy leading up to the present demand for this loan that have ever been uttered in this House. The third speech—I will limit my references to three, though there were several others—was made last night by one of the Government's supporters, the hon. Member for Mossley (Mr. Hopkinson). In that speech we had a presentation of a manufacturer's point of view with regard to the costs of the armaments industry and the effect upon national finance, to which I hope the new Minister dealing with this matter, the Chancellor of the Duchy of Lancaster, will pay special attention, and about which I hope to make some comment very shortly.

But I think the speech which stands out for sheer complacency is the speech of the Prime Minister. I took a very careful note of it. It is not easy, when one is winding up, to get an accurate note of what has been said from the Front Bench, but I took down as much as I could, and have studied it very carefully, and I think that the charge of my right hon. Friend as to its complacency was completely justified—complacency, principally, with regard to the organisation, the outlook and the material for our defence. We shall be coming very shortly to debates on the Estimates for the three fighting Services, and perhaps we shall then be able to put to the Service Departments more searching questions than we could expect the Chancellor of the Duchy to answer in detail to-night with regard to each of those Departments.

I must say, however, that the complacency of the Prime Minister about the results, as he put it, of their efforts at preparation and development for the last few years, simply amazed me. My own study of the situation, imperfect as of course it must be without the complete technical information that is at the disposal of the Government, would lead me to the conclusion that, so far from our being stronger in relation to defence today, we are relatively weaker in 1939than we were in 1931 and 1932, when the present Chancellor of the Exchequer, as Foreign Secretary, had to make up his mind, with his Government, which way he was going to lead the League of Nations in defence of the Covenant of the League. He had a far better relative strength then to stand behind the principle of the Covenant than the Government will now have in regard to the increasing armaments which they are building up, because, as the right hon. Gentleman the Member for Epping (Mr. Churchill) said this afternoon, while we have moved forward in the last two or three years, especially with regard to the defence, all the other countries also have moved forward with us, and in some cases at a greater rate.

I cannot understand the Prime Minister's complacency, in the absence of any assurance at any time in the last few months that we had even begun to narrow the gap, in the air for example, between ourselves and German output and production. A great many statements have been made in the House of Commons during the past three years with regard to the aeroplane production of Germany. We have never seen any denial of the truth of those statements, and we have never had any assurance, that despite all our expenditure of money, that we have even begun to narrow the gap. Up to a few months ago, at any rate, it was fairly well recognised that the German production was still month by month outstripping the production of aeroplanes in this country. I feel certain that the Committee must have been impressed with the complete gloom at the conclusion of the Prime Minister's speech, which opened on such a complacent note.

I would ask the Committee to remember that the Prime Minister had been so impressed by the financial figures put to us by my right hon. Friend the Member for East Edinburgh that apparently he thought we might in a few years' time reach a position in which we should not be able to meet out of tax revenue the actual cost of maintaining the three fighting Services. I ventured to suggest some two years ago that we might reach that position, in view of the way in which the Government's policy was leading. This year we hear from the Prime Minister that that position is already in sight. Probably the Prime Minister is quite right when he says that if you reach the position within a few years in which you cannot meet the maintenance charges for your fighting Services, without the capital expenditure, out of tax revenue, the provision that you are making for sinking fund to-day will not be of any real significance at all. That means the postulation of a very serious financial position indeed for the future, and I think we are entitled to ask on this side, and not to be ashamed of repeating the question. Who is responsible for bringing the coun- try to such a position as that? There they sit.

When I think of the manner in which the Prime Minister endeavoured to lecture us to-night, the scornful way in which he suggested that perhaps Labour would have departed from the belief of imposing peace by force—that was never the belief of Labour and never has been. You are reduced to this position to-day because the Governments for the last seven and a half years in which the Prime Minister has been concerned have betrayed the very alternative to such a policy. In fact, as my right hon. Friend the Leader of the Opposition said to-night, in the peace of Munich last September what you really did was to force a peace upon a comparatively small nation by the threat of force, apparently in order that the Prime Minister might retire in good order to prepare larger defences for the war which he began to believe would be inevitable. If that is not the position, perhaps the Chancellor of the Duchy will tell us what it is, for we are to-night being asked to pass this tremendous increase of borrowing powers, which, I take it, in spite of some questions which have been asked in the last few days, is really because, almost as soon as the Prime Minister returned from his last visit to the Fuhrer at Munich, he said, "It is now imperative that we should rearm with a larger programme and with much greater speed than we have ever yet armed." I think we are, therefore, entitled to draw the conclusion that, having with the French leader been responsible for enforcing upon Dr. Benes surrender to the German ultimatum under the threat of force, you have to ask our country here to undertake an expenditure upon armaments the like of which is unprecedented in peace time in this country. Those are the people who have brought us to this condition of affairs.

When we come to deal with the responsibility for the policy which has led us to this situation, we shall be told again and again that, of course, all parties are really responsible and that we have not been able to do all we would have liked to do because we let our armaments go down too far. As a fact, I put two things in reply to that. First of all, I do not admit that in 1931, when Labour left office, although it had then prepared by the removal of technical difficulties for a full world disarmament conference, the strength of this country relatively was any less than it was in 1914, in comparison with what the other forces in the world were at that time. Germany had no great armed force, you had not a hostile Japan, and certainly you had not a hostile Italy, and with all the visits and messages that have taken place between London and Rome since then, no one can say that you have not got to postulate Italy on the other side if there comes a break between the nations. In fact, therefore, I submit that in 1931 we were relatively as strong as or stronger than in 1914.

My second answer is that this Government and its immediate predecessor had been in continuous office, not for seven months, but for seven and a half years, that they had been there with the largest Parliamentary majorities in our history, and that they had been free to formulate and to carry through whatever policy was required in international diplomacy or in preparation for defence that they considered the nation needed; and the final sum total of it is that you come to the House of Commons in February, 1939, and say, "We must admit that we have led you to the brink of war, and we must now ask you to make the largest contribution to the public Exchequer in present taxation and in future commitments that you have ever been asked to make, and to put the nation in bondage." The Prime Minister said in Birmingham some considerable time ago now, when first dealing with the expanded armament programme, that while recognising the insensate folly of it, we had also to recognise that it meant the lowering of the standard of life of this country for a generation. The expansion of the programme since Munich, since the wonderful peace visit of the Prime Minister, means the putting of the nation in bondage, not for one generation, but for three generations.

If I may revert to a question that the hon. Member for the City of London (Sir A. Anderson) was courteous enough to give way for me to ask, I very much doubt, from the way in which the Government are piling up debt, whether that debt will ever be met. It will only be two or three years before we shall have reached a total of £9,000,000,000 of debt, £1,500,000,000 more than when the wicked Labour Government left office on a so-called financial crisis. I must say that it is a little hard, in such circumstances, for us to sit here and be lectured by the Prime Minister. I submit that it would not be unfair to say, having regard to the things that I have been reciting, which I believe to be facts, that we have been brought to this position by the moral cowardice of the Government at a time when they ought to have stood for the Covenant. [Interruption.] I overheard the Prime Minister say that when I charged him with moral cowardice, that meant that I would have led you to war. I am delighted to have the chance of meeting that challenge. It is the kind of thing that the Prime Minister is saying in the country.

What he really says in the country—he never says it quite in that way in this House—is that there were really last year two alternatives. One was to follow the basis of appeasement and try to maintain peace in that way, and the other was to regard war as inevitable and follow it accordingly. I deny that those were the only two alternatives. [An Hon. Member: "What is the other alternative?"] I do not often see the hon. Member opposite in his place, but I am glad to answer the question, what is the other alternative? The other alternative was to stick all the way through to collective security. If last year and at an earlier period the Government had been prepared to follow the advice given by Labour, on 7th September, and had organised the nations who were prepared to stand behind the Covenant, Hitler would not have marched, and you would have saved peace and Czecho-Slovakia.

Vice-Admiral Taylor

Will the right hon. Gentleman say which nations would have stood behind us?

Mr. Alexander

I shall be pleased to answer questions one at a time.

Vice-Admiral Taylor

I ask, which nations would have stood behind us?

Mr. Alexander

I should say that on the basis of our holding together last September, this country and France, with Czecho-Slovakia, before dismemberment, and Russia, even before we had begun to mobilise other nations we should have been strong enough, and Hitler would not have marched.

Mr. Loftus

Can the right hon. Gentleman say whether the French trade unions were in favour of war?

Mr. Alexander

I do not think that has anything to do with the argument that I am making. I cannot reply for every single organisation of other countries, but I know that this country had a lot to do with influencing France to break the pact with Czecho-Slovakia. As to alternatives, the only one who regarded war as inevitable was the Prime Minister. It is impossible to reconcile his present attitude, his present policy on armaments and the present rate of expenditure on armaments, with anything else than that you are preparing for the worst, and in such circumstances as indicate to the people of this country and of the world that you do not trust the word of the dictators, that you do not expect war to be made or started from any other source than from the totalitarian States, and that you are preparing on those lines. My submission is that Labour had an alternative, which was neither to regard war as inevitable nor to follow the doctrine of appeasement, which meant giving away somebody else's birthright and somebody else's freedom.

May I now say a few words about expenditure, and whether or not that expenditure is justified at its present rate. On that matter it is significant to observe that even a newspaper of a strong capitalist order, the "Sunday Express," is very concerned about the manner in which the money is being spent. I wish the Prime Minister would tell me what there is amusing in that statement. I should like to know. I will give way for him. I suppose the Prime Minister is such an expert angler that he does not like being angled with himself. I am mentioning the "Sunday Express." It is not exactly a Socialist newspaper, and I do not see why I should not call it a capitalist newspaper. It has been pointing out the very great need there is for preventing war profits arising instead of allowing them to arise and then having to take some portion of them back.

I should like to devote a little time to the question of profits. We had a speech last night by the Financial Secretary to the Treasury, a carefully prepared and beautifully delivered speech, which was confined almost entirely to what the Government thought was the right method of dealing with the vexed question of profits in connection with the armaments programme. I agree with the "Sunday Express" when it puts the view that it is folly to allow excess profits, and then to say: "This is good, because we can now take back one-fourth or one-third of the profits for the Exchequer." The Financial Secretary last night justified high costs by the need, as he put it, for speedy delivery and for efficiency of production. It would not have been necessary to have incurred very heavy additional expenditure for speed if the Government had adopted a sane and organised policy in regard to munitions production. They were warned again and again from this side of the House, and by the right hon. Member for Epping and others, but instead of organising in a decent and progressive manner they left things until too late.

Let us see what has happened in the case of the Air Ministry, where some of our charges of profiteering come closer home. Delivery has been anything but speedy. If the speed has improved, many of us will be glad. Perhaps the Chancellor of the Duchy of Lancaster will be able to tell us what is the actual output of aeroplanesper month at the present time, and whether we are narrowing the gap between our production and that of Germany. Up to the present time our delivery has been anything but speedy, and I think the reason is not very far to seek. The hon. Member for Mossley last night gave one or two special reasons. He pointed out that when Lord Swinton was organising the campaign of aeroplane production he thought it right to make it public that the orders would be given only to a favoured few firms, and he went on to make it clear that nobody else would be allowed to come in afterwards on the basis of competition.

There was a statement made at a recent meeting of the Alvis Engineering Company, in which they said they had made a heavy loss because they had provided a large factory for the production of Government aeroplanes, but that until a few weeks ago they had, not been able to get an order because they were not in the ring. There is also the story of profits in aircraft production which are simply astounding. Last year, on the 15th November, I spoke in this House, I think on an Amendment to the Address in reply to the Gracious Speech. I referred to the profits being made by the Bristol Aeroplane Company and to the position of their balance-sheet, and I prophesied that, from my ordinary reading of a balance-sheet, the company would shortly be making the largest bonus issue of any company in that industry. The next issue of the "Investor's Chronicle" included a long paragraph of special attack upon me and informed me that any stockbroker's clerk could have given me much better information than I was able to give the House of Commons, and threw complete cold water on my suggestion. Two days later, on 19th November, the financial columns of the London "Times" announced that the Bristol Aeroplane Company proposed to issue 900,000 bonus shares, three to each shareholder for every four that they had, and I think the next part of their announcement was as interesting as anything I ever read in such a statement. It was to the effect that, in order to avoid confusion in the public mind for the future as to the ratio of earnings in relation to the company's capital, they also proposed to issue 2,400,000 new 10s. shares at par at the rate of one to each existing shareholder.

When I went to the Stock Exchange list that morning I found that the price of those shares, or shares of an equal value, was 58s., but they were issuing them to their members nominally at 10s. and I found, even after the interim dividend of 7½ per cent. had been paid, the shares still remained fluctuating from 22s. to 24s. and to-day they are round about 23s. So that in the current year there is first a 75 per cent. bonus issue and an issue to each shareholder that gives him a chance on the market to make another 130 per cent. Last night the Financial Secretary said that it was not right to assess whether or not profits were excessive by the percentage of profits in relation to capital. I have often wondered, when they talk like that, whether they would say the same thing when a company makes a loss in relation to its capital. Usually when they are dealing with losses they are not in any great difficulty about the point, but when a company can provide a benefit of at least 205 per cent, in one year at the time the interim dividend is being paid it seems to me that we can fairly assume that the profit is excessive. We have heard something about sacrifice. I hardly think that 205 per cent. in a year indicates very much sacrifice either to those who manage the company or those who receive the actual interest on the shares.

I would also ask the Financial Secretary to look carefully again at the report of the Estimates Committee. He will find that one of the civil servants, in reply to Question 2840, said their standard was X per cent. on the capital employed, and that was not of course the same thing as X per cent. on cost. So that the information given to the Estimates Committee is clearly intended to convey that, if they make an excessive return upon capital, that would be regarded as excessive profit. Perhaps the Financial Secretary had better look at that again before he makes the kind of statement that he made last night. Moreover, I am concerned about the way the public are being squeezed in this excess profit, because in many cases these companies are not providing the whole of the capital themselves.

I asked the Secretary of State for Air on Monday what was the total capital expenditure to date for the purposes indicated in paragraph 30 of the White Paper, which deals with the erection of Government factories in addition to existing factories. How many factories had been or were being provided, what were the names of the firms entrusted with their management and whether the Government retained complete ownership of the new factories? According to the answer, they have already voted £12,000,000 for new-factories of this character, seven have been erected, and they are under the management not only of the Oxford Motor Company but of the Bristol Aeroplane Company, the Daimler Company, the De Havilland Company and so on. Therefore you have this extraordinary return on capital being made by firms of this kind which are being financed in their capital account in order to meet the extra demands that are being made on them by the Government. In these circumstances to ask from individuals, from the general rank and file of citizenship, for wholesale voluntary aid, with the Government allowing this sort of thing, is an insult.

I read very carefully the speech of the hon. Member for Mossley as to the argument that is so often used with regard to the costing arrangements of Government Departments in checking these matters, and I think that the case that he put is unanswerable. He said that Lord Swinton was obviously under the impression that a system of cost accounting can actually control the cost of production. In fact what really happens is that the accountants at the Admiralty or the Air Ministry may ascertain after the event what all the various processes have cost but they are unable to devise a system of cost accounting which can give control over the actual cost of production. They may say what it ought to cost, and they can say afterwards what it has cost, but they have no real effective check on it at all. I am interested to see how we can deal with this matter of bringing justice to the taxpayer in regard to great expenditure in time of national stress and urgency.

I do not at all accept the view which has been expressed on behalf of the Government, and expressed from time to time by individual manufacturers, that there is no way of arranging their business except to have a cost structure which gives a slight margin upon every single process that is carried out. It may well be that you ought to have a system which would prevent your having a wasteful process in any piece manufactured, and to check up on that. But, in fact, it would not be impossible at all for the Government to take, for the benefit of the community, all that is unreasonable in the way of profits arising from the production of munitions.

There are two ways in which it could be done. The first is by having a really stringent audit of the signed accounts of munitions companies, and insisting, as a result of that audit of the general year's accounts, that anything over 7½per cent. on capital inures to the Government. I feel that that is the best we can do with a capitalist Government in office, though we could do better with a Socialist Government. Is the proposal unreasonable? I thought I would be reasonable. Some of my hon. Friends, no doubt, would say it is too generous. Might we ask the Chancellor of the Duchy of Lancaster, who is now to act as chairman of the Chief of Staffs Committee, whether that is unreasonable? But there is another way; I am not sure whether it is not a better way. It is the way suggested by the hon. Member for Mossley last night, when he argued clearly that the actual production of Government orders has so enhanced the value of equity shares in those businesses, and that they are so much further enhanced when the businesses receive the help of Government capital, that there ought to be a direct return to the nation at large in a fair share of the profits on those orders and that capital. If you are going to tax the citizens to the hilt, as is now being proposed, why should you not see that they get some benefit from profits inuring to any businesses to which orders are given? I shall be glad to know whether the Government are prepared to adopt that suggestion.

I will just quote one other example. I referred to it last Friday week when dealing with the Consumers' Council Bill. I mention it now in view of the great need for seeing that we are not mulcted by private firms when we deal with air-raid precautions. Just as the Government have been pushed over on different points by public opinion when they were reluctant to act, so I believe the Lord Privy Seal will eventually be pushed into having provision made for proper deep shelters against high explosive bombardment. When that happens, it is quite clear that cement will be one of the materials most largely consumed. What a story is the story of cement. I have been a member of the Government's own Building Materials Committee, which was set up to check prices. In fact, the Prime Minister himself appointed me in 1923. I have been on the committee ever since, and I have watched the position with great care. In 1925 or 1926 I signed the report to the then Minister of Health, now the Secretary for Air, in regard to excessive profits which were being made on cement. The position then was—I cannot quote too many details, unfortunately they are marked "Private and confidential"—that the Minister of Health instead of publishing the report, made an arrangement by which the price of cement was reduced by a shilling a ton in some cases and two shillings in others. Within 15 months they had increased the price all round by 3s. a ton.

We had another inquiry into the industry in 1938, and after a great deal of pressure and examination of the facts we signed the report, I think, in the second or third week of December, and presented it to the Minister of Health. It has never seen the light of day, and it is now the middle of February. Why should that not be published? Unless we are going to get a proper check upon things of that kind, what is going to be the cost of air-raid precautions? We are proposing to spend £51,000,000 under the White Paper in the current year upon air-raid precautions, and judging by the manner in which the Government are handling it, there can be no end to the way that that expenditure will mount and the extent to which the public will be exploited.

I want to give the Chancellor of the Duchy time to reply, although I intended to say, as I always do on these occasions, much more than I am able to mention in the time. May I say in conclusion that, while my hon. Friends on this side of the Committee will not vote against the main proposal for the armaments, which are clearly required because of the policy of the Government leading us into the position into which they have led us, we shall be bound to support a token Amendment to express our complete disapproval, first, of the policy which has led us to this situation, and secondly, because of the inadequate check the Government are exercising on behalf of the taxpayer in relation to the spending of the money they are borrowing, and the way in which, therefore, the public are being exploited.

10.23 p.m.

The Chancellor of the Duchy of Lancaster (Mr. W. S. Morrison)

The Committee will understand that at the end of a two days' Debate ranging over a very wide field of subjects it is not perhaps possible for me to answer all the questions that have been put on a great variety of topics, but there will be as regards each of the Defence Services individually and on the other Departments of State whose functions impinge on defence—and they are very numerous nowadays—further opportunities in the course of the Estimates Debates for more detailed examination of matters which are really of departmental rather than of general interest.

I cannot help reflecting on the first part of the speech of the right hon. Gentleman opposite that he is a very difficult man to please. He found in the speech of my right hon. Friend the Prime Minister both complacency and gloom, and it seems to me that, though complacency is a word of abuse which is very often applied to Ministers, it is very seldom that the same person is accused both of complacency and of gloom. The right hon. Gentleman invited me to give figures of the production of aeroplanes and similar materials by comparing production here and in other countries. I am new to this post, but I am not quite as innocent as all that. I do not think that it would be in the public interest to give information of that character.

Mr. Alexander

Does that mean that the right hon. Gentleman is unable to give any assurance that he is narrowing the gap?

Mr. Morrison

I cannot give either figures of production or any figures from which that production could be assessed. It is impossible for me to give the figures of production beyond what is stated in the White Paper, but it should be a source of comfort to hon. Members to know that during the current year the production has more than doubled.

A word in regard to the exordium of the right hon. Gentleman, which appears to be an inevitable one in the speeches of the hon. Gentlemen opposite, when he deals with the topic of foreign affairs. He referred to a statement by the Prime Minister about imposing peace by force, and as some use has been made of this phrase it should be made clear what is meant by it. My right hon. Friend doubted whether the League of Nations could be changed from the peaceful organisation for which it was founded into a body of a military character which would impose its decrees by force. That is the idea which my right hon. Friend mentioned and with which he still disagrees, but it still remains, I am afraid, blatant in most of the arguments used by hon. Members opposite.

The right hon. Gentleman who has just spoken used a colourful expression when he said that the results of the Munich Agreement meant putting this country into bondage for at least three generations. Again, I am forced, in the interests of debate, to confront the right hon. Gentleman with the alternative. If there had been no Munich it would not have been a question of three generations in bondage, it would have been the destruction of one generation and the bondage of perhaps many more than three generations. The right hon. Gentleman also took the point about the possibility of a third alternative policy which means, when we examine it, that we ought to organise certain nations to resist aggression. Again, we must know how far this conception of collective security goes. Does it mean the organisation of these nations to fight a preventive war, or indeed a war of any sort? I have here a pamphlet under the name of the hon. Member for Westhoughton (Mr. Rhys Davies). It shows that at least the party opposite are not unanimous in this view of the problem. The hon. Member makes a comment about the direction or misdirection of foreign policy by the party opposite, and uses this expression.

Some of our people talk as if they would wade through seas of human blood to justify collective security. Let us be clear— That is a very useful phrase— That if the present emasculated League of Nations had been put into operation during the last few years our young men would most probably have had to fight and die in Manchuria, China, Abyssinia, Spain, Austria and Czecho-Slovakia. The right hon. Member for Hillsborough (Mr. Alexander) founded an argument, if I was able to assess it correctly, on a phrase which he addressed to my right hon. Friend the Prime Minister: "You are preparing for the worst." On this phrase he founded a very sinister interpretation as to the future, but I do not think that conclusion follows. I will put it this way: Because we are taking measures of a substantial character for defence it does not in the least mean that we subscribe to one of the worst heresies, namely, the inevitability of war. When the Prime Minister takes with him in the morning his umbrella it means that he is providing himself with a safeguard if it should rain, but he is not prophesying rain.

Mr. Attlee

Why does not the same argument apply when we ask for collective security and the union of nations to stand together?

Mr. Morrison

If collective security is to be carried to the extent of those nations being organised for attack so as to resist the aggressor, and if they are to be prepared to go to war, that seems to me to be a device not for preventing war, but for securing that every succeeding war that may happen shall be on the largest possible scale. If that is not the assumption, and if this organisation is to pro- ceed but to stop short of war, then it seems to me to be nothing but a bluff.

Mr. Alexander

Then how does the right hon. Gentleman justify the position in which this country is now committed to the defence of France from whatever quarter she is attacked, and in which the Government have substituted a dual alliance of two Powers acting together for the collective security of the whole? Surely, that makes the position very much worse.

Mr. Morrison

That is an argument that will not impose on the Committee for a moment. The security of France is of vital interest to this country.

The right hon. Gentleman made a number of remarks on a question which has been very prominent throughout the Debate, namely, what is generally described as profiteering. Let me say at the beginning that the Government welcome the prominence that has been given to this topic in the course of the Debate. We are spending immense sums, and we are calling on our people to make sacrifices to that extent. While we do not grudge what is necessary in the nation's defence, it is our duty to see, as far as we can, that we receive value for every penny that is spent, and in so far as that can be achieved, the purpose of the Government will be satisfied. My right hon. and gallant Friend the Financial Secretary to the Treasury made a speech last night which, I venture to say, put the matter in its proper light, and ought to be sufficiently lucid and cogent to dispose of any idea of there being a lack of control over costing. The right hon. Gentleman mentioned certain cases, and he was courteous enough to give me preliminary notice of one of these last night. It is a long and involved story, and I think that if the right hon. Gentleman were to address himself to the Secretary of State for Air on this case, he would get an explanation at greater length than I could possibly give.

Mr. Alexander

I have done so.

Mr. Morrison

I think that if the right hon. Gentleman followed that course, he would be following the proper course in this matter.

Mr. Alexander

That is no answer.

Mr. Morrison

I say that for this reason. The right hon. Gentleman has detailed a number of transactions with stocks and shares which are of a very involved character, and reports that I have had time to glance at do not make me think that the interpretation which he has placed on these transactions is necessarily the right one——

Mr. S. O. Davies

What is the right one?

Mr. Morrison

—but I should like the matter to be examined in more detail, because I am as anxious as the right hon. Gentleman that there should be no waste of public money in the course of the rearmament campaign.

Mr. Alexander

I have the balance-sheet here.

Mr. Morrison

More than the balance-sheet is needed.

The right hon. Gentleman the Leader of the Opposition opened his remarks with an exordium which is familiar to all of us. He showed how all our troubles against which this immense provision is deemed necessary are due almost entirely to the conduct of every Government of this country except those transient phantoms in which he himself played a distinguished part. The arguments have often been repeated, but they convince no one—except hon. Members opposite. Those arguments may be summed up by the right hon. Gentleman's plea that if only this Government had shown more enthusiasm for disarmament all this would not have happened. I do not know how the right hon. Gentleman measures enthusiasm—whether it is to be assessed by the vehemence of speeches made on behalf of that ideal. I would apply a sterner test to the measure of enthusiasm shown by various nations for the cause of disarmament, and I think the short answer to a charge of any lack of enthusiasm on our part is that we are the only people who have voluntarily disarmed. It is because of that peculiar enthusiasm for disarmament carried out in past years that we are faced with a problem of the gravity which we have to face to-day. As the right hon. Gentleman remarked, this is not a Foreign Office Debate. That is an exordium which has been used once or twice by hon. Members in this Debate. It has generally been a prelude to a discussion of foreign affairs, much as the familiar opening, "I shall not detain the House for a lengthy period," proves sometimes to be the prelude to a speech of some duration.

The questions of co-ordination are those to which it is my particular duty to refer. The first point consisted of a series of questions put to me by the right hon. Gentleman the Leader of the Opposition, the general purport of which was to inquire whether or not events happening in the field of foreign politics or any other political movements or forces were reviewed sufficiently intimately from day to day to enable defence dispositions and foreign policy to be accurately assessed. That is a most pertinent question, because it would not be a good defence organisation which was so constructed that it remained static upon one set of assumptions in a moving world. I think I can answer the right hon. Gentleman by describing something of the mechanism that is actually involved. At the end of paragraph 47 of the White Paper of 1936 it was explained that there was a Joint Planning Committee which consisted of the Director of Planning of each of the three Services, and that that committee was to be supplemented by officers who had been trained in the Imperial Defence College. At that college there is an opportunity for those who are trained there to consider not only the needs of their own Services, but the wider problems of imperial strategy and the problems of other Defence Services as well. It was stated in the White Paper that those officers' main duties would be on collective plans prepared by the Joint Planning Committee for submission to the Chiefs of Staff Committee. Here is an instance of collective planning going on as part of the. day-to-day work of the three Defence Departments, and I can assure the Committee that the Chiefs of Staff Committee and the Joint Planning Committee are not bodies which meet occasionally just to submit reports of general academic interest. They are, in fact, joint staffs spending their lives in working out joint and collective plans. The right hon. Gentleman asked, How is foreign policy related to this mechanism? One part of the answer is that all major defence plans or appreciations by the Chiefs of Staff are based on a political background provided by the Foreign Office and approved by the Committee of Imperial Defence as a whole before the Chiefs of Staff get to work on it. But that is only part of the story, because these plans after approval by the Chiefs of Staff Committee come before the Committee of Imperial Defence, of which the Foreign Secretary is a member, and that gives an opportunity for ensuring that foreign policy and defence are very intimately related. Furthermore, it is a very common practice for the Foreign Secretary to ask the Chiefs of Staff for their technical advice on some point or other that arises in connection with the day-to-day political problems of his Department. That is how co-ordination is carried on in that second category.

Mr. Attlee

I did not ask any questions about the mechanism. We have had reams of evidence about that. I asked whether as a matter of fact not the foreign policy but the changes in the world situation during the past year had in actual fact affected the plans and the distribution of our forces and the allocations of material to different Services.

Mr. Morrison

The answer is a most emphatic affirmative. The point I wanted to make clear is that this was no isolated proceeding, but that a continuous process of review goes on the whole time, and of course the arrangements are instantly brought into harmony with any change in the situation. Perhaps I may be permitted to say with what pleasure I heard my hon. and gallant Friend the Member for Hertford (Sir M. Sueter) refer to the work in this Department of my right hon. Friend the present Secretary of State for the Dominions. Perhaps he will permit me, as one who has been struggling in the past weeks, and is still struggling, to overtake the work done in that Department, to say how an examination of that work does reveal the immense value of what has been done by my right hon. Friend. Very often it is difficult for a Defence Minister to use facts which would justify him completely, but when those facts do come out it will be seen how complete is the vindication of my right hon. Friend and that his work has been of enduring value to this country.

The hon. Member for Bishop Auckland (Mr. Dalton) and some other hon. Members have made reference to the appointment of the new Minister for the Co-ordination of Defence. The hon. Member for Bishop Auckland tried to make the worst of both worlds in regard to my Noble Friend by depicting him in almost the same breath as one who, from his long association with the Admiralty, would have a bias towards Admiralty interests and was yet so inexperienced in the other Services that he would, to use his own expressive phrase, "be bluffed and hustled by the other Departments." My only comment is that the Prime Minister reminded us this afternoon that my Noble Friend has had immense experience in the actual co-ordination of departmental services in the Admiralty, and that should dispose of the first allegation. As to the second point of criticism, anyone who knows my Noble Friend and can imagine that he can be bluffed or hustled by the other Departments is imagining something so comic that even a Scotsman can see a part of the joke.

There is no doubt that there is need continuously for co-ordination in defence, and if any one wants a reason for it the Debate which we are just concluding provides an admirable example, because so many suggestions have been put forward that if they were all accepted together and there was no process of selection the expenditure involved would be stupendous. The hon. and gallant Member for Central Wandsworth (Colonel Nathan) suggested an expenditure of £500,000,000 on the purchase and storage of commodities. The hon. Member for West Leeds (Mr. V. Adams) wanted a large Army of 750,000 or 1,000,000 men. If one takes all the suggestions made in this Debate alone, it will be seen that if the defence of this country is to be brought within any measurable compass as regards expenditure the need for co-ordination is very great.

I would refer next to the constructive suggestions, if I may so call them, of the right hon. Gentleman. He wants, of course, a Ministry of Defence, and several hon. Members have expressed views to the same effect, but if one examines the problem one finds that it is very difficult. Where are you to say that a Department is not connected with defence? Defence in these days does not end with the three service Departments. It includes, as we are discovering now, Civil Defence; it even includes questions relating to shipping, which come under the Board of Trade, and the conclusion which I would offer to the Committee is that Ministerial responsibility for the whole field of defence cannot be concentrated at a Ministerial level lower than that of the Prime Minister and the Cabinet as a whole. That was the view taken when the Committee of Imperial Defence was created with the Prime Minister as permanent Chairman.

The next question that has been raised is that of a Ministry of Supply, which we have heard discussed very often. The right hon. Gentleman the Leader of the Opposition raised it and it has often been raised by my right hon. Friend the Member for Epping (Mr. Churchill). The right hon. Gentleman the Leader of the Opposition made the statement that service Ministers had not been able to grapple with supply. I should have thought myself, that the expenditure foreshadowed in this White Paper for this and the ensuing year, showed that, as far as the purchase of warlike stores is concerned, the supply branches of the service Departments were grappling with this very large problem and doing it successfully. I should have thought that this expenditure would be sufficient to indicate that there is no lack of power in the service Departments to equip themselves and that they have the capacity, as soon as preliminary questions of stores designs, and so forth, have been settled. There are other matters connected with the question of a Ministry of Supply into which I need not go at length, because they are familiar to the Committee. The reasons against it, at the present stage, have frequently been stated. We are now engaged in this immense programme. It has been greatly accelerated by means of co-operation between employers and employed in the industries concerned and we believe that at this time it is better to trust to co-operation than to compulsion and that a switch-over at this moment would mean a check and a delay which we do not want to see.

Mr. Churchill

Who has urged compulsion in this matter?

Mr. Morrison

If there is no compulsion at all, then it merely means transferring Ministerial responsibility without compulsory powers, and that means removing the present supply Departments from their present chiefs, and putting them under another Minister, a process which is bound to absorb to some degree—I think a greater degree than is often realised—the energies of the officers concerned and to delay production. But it is sometimes said, "You will need this Ministry in time of war and you should make provision in time of peace so as not to have to make it at the outset of war." The answer to that depends, in the first place, upon what kind of war it is, and, in the second place, the time taken to transfer will be greatly affected by the completeness or otherwise of the plans made to transfer in time of peace. All I would say is that if and when it is found necessary to have a Ministry of Supply we shall have it, which no doubt will be a great pleasure to my right hon. Friend the Member for Epping who has contested so strongly for it in the past. But a change-over at this time would be deleterious rather than beneficial. That is the view which was stated by my right hon. Friend the other day, and there is no change at the moment. My right hon. Friend the Member for Epping opened somewhat scoldingly in his reference to the atritude of my right hon. Friend the Prime Minister to the League of Nations. But, at any rate, my right hon. Friend speedily got rid of any ill-humour, and I thank him for the kindly reference he made to myself and to these problems. My right hon. Friend has raised some very large questions about the part the Army should play if we should unhappily ever be engaged in a Continental war. Let me say at once that the Government fully agree with him that once involved in war we could not proceed upon the principle of limited liability. All our resources would have to be thrown in, and the only question which would arise would We how most effectively they could be used. That point therefore is not open to doubt.

What we have now to consider is the preparation to be made for the initial stage of a war, and my right hon. Friend devoted some attention to the thesis that our contacts with the French should be as intimate as possible. I have no difficulty in giving him the assurance for which he asks, namely that the conversations already begun between our respective staffs are being continued and will naturally cover the respective roles of the different services in the first stages of such a war. We do not contemplate the accumulation of reserves or of war potential in peace time on a scale comparable with that which prevailed in the later stages of the Great War. No doubt the Secretary of State for War will have more to say on this subject when he introduces his Estimates. I would only add that from the point of view of co-ordination we intend our plan to be consistent and complete—men, material, munitions and war potential all to take their appropriate place in relation to each other.

I have been asked questions about various other matters. One of them was with regard to raw materials, and I can only say that a great deal of work has been done in securing reserves of essential commodities. There were also a lot of questions connected with civilian defence, but I think it is the general desire of this Committee that we should for this important subject have two days next week, and for that reason I will defer these questions in the meantime. A good deal has been said as to how essential it is to have unity of feeling in the country and unity behind a common policy. I am sure no one could doubt how wise that is. The only thing is that some of those who are constantly urging unity seem to imply that such unity can only be had upon the policies which they themselves advocate, and it is a curious thing that some of the greatest advocates of a policy which every one could follow belong themselves to some of the smallest minorities in this House. While we have the support of the people we believe that the policy we are putting forward has the assent of the greatest number of our people.

Mr. Gallacher

Far from it.

Mr. Morrison

I am grateful for the hon. Member's intervention. It shows how right I am about minorities.

I would like to say this in conclusion, that the whole Committee must have felt a high degree of sympathy and admiration for the speeches that have been made in all parts of the Committee deploring the expenditure which is the subject of our discussion to-night. I remember that the hon. Member for South Shields (Mr. Ede) was good enough to put some considerations before me, and to express the hope that they would find an answering chord in my mind. I must confess that they do. But when the hon. Member spoke in sincere terms about this request that we are making to the Committee to-night being a defeat of what we fought for in the War, I am bound to say that I do not agree. What we fought for was, I think, a peaceful and just society in Europe and the world wherein all its peoples might go about their innocent affairs without fear of violence. I suppose we all expressed that view to ourselves, according as our vernaculars differed, and we hoped that we might be able at length to say of Europe, as the prophet said: Violence shall no more be heard in thy land, wasting nor destruction within thy borders. There has been no defeat of that greater hope, because it is entirely unconquerable. It is the spiritual stuff of which all civilisation is made. What has been disappointed has been the belief, hitherto cherished in many quarters, that this cause could be advanced by unilateral disarmament, and that is a very much smaller and less fundamental matter. I remember the late Tom Shaw, whose loss we all deplore, saying in the House from this Box in May, 1931, speaking for the party opposite: I believed 10 years ago that, provided someone set an example, that example would be immediately followed. In my opinion the example was definitely shown, but the result did not come, and I cannot shut my eyes to the facts of life because I hold a beautiful theory that ought to work but does not.

Mr. Alexander

What was that?

Mr. Wedgwood Benn

Notes for speakers.

Mr. Morrison

I can give the right hon. Gentleman the reference in the Official Report. My comment on that would be that, if the theory to which reference has been made does not work, there is no reason why we should give up the struggle. My right hon. Friend the Prime Minister has given the world a very

splendid lead in this respect, and I am convinced that the Government, in its determination to use the full resources of its people to secure peace, has behind it, not only the people of this country, but millions of ordinary men and women in every corner of the world.

10.59 p.m.

Mr. Garro Jones

In all the long reply which has been given—[Interruption]— the right hon. Gentleman has made no reference to the profiteering to which attention was drawn by my right hon. Friend the Member for Hillsborough (Mr. Alexander). [Hon. Members:''Divide!"] There is one thing that is more amazing even than that, and that is that, the greater the majority in the House, the greater the intolerance they show. [Hon. Members: "Divide!"] I have been sitting through this Debate all day, and have failed to hear any reference to that subject in the speech which has just been made. [Hon. Members: "Divide!"] I have here evidence which, if you dared to listen to it, would refute the argument of the Prime Minister that there has been no profiteering. If every hon. Member in the House would read the report of this Committee, he would not believe the statements which have been made from the Front Bench.

The Parliamentary Secretary to the Treasury (Captain Margesson) rose in his place, and claimed to move, "That the Question be now put."

Question put accordingly, "That the words proposed to be left out stand part of the Question."

The Committee divided: Ayes, 310; Noes, 127.

Division No. 39.] AYES. [11.4 p.m.
Acland, R. T. D. (Barnstaple) Beamish, Rear-Admiral T. P. H. Burgin, Rt. Hon. E. L.
Acland-Troyte, Lt.-Col. G. J. Baauchamp, Sir B. C. Butler, Rt. Hon. R. A.
Agnew, Lieut.-Comdr. P. G. Beaumont, Hon. R. E. B. (Partsm'[...]) Campbell, Sir E. T.
Albery, Sir Irving Beechman, N. A. Cartland, J. R. H.
Allen, Lt.-Col. Sir W. J. (Armagh) Beit, Sir A. L. Cary, R. A.
Amery, Rt. Han. L. C. M. S. Bernays, R. H. Castlereagh, Viscount
Anderson, Sir A. Garrett (C. of Ldn.) Blaker, Sir R. Cayzer, Sir C. W. (City of Chester)
Anderson, Rt. Hn. Sir J. (So'h Univ's) Bossom, A. C. Cayzer, Sir H. R. (Portsmouth, S.)
Anstruther-Gray, W. J. Boulton, W. W. Cazalet, Thelma (Islington, E.)
Apsley, Lord Bower, Comdr. R. T. Cazalet, Capt. V. A. (Chippenham)
Aske, Sir R. W. Boyce, H. Leslie Chamberlain, Rt. Hn. N. (Edgb't'[...]n)
Astor, Major Hon. J. J. (Dover) Bracken, B. Channon, H.
Astor, Viscountess Plymouth, Sutton) Brass, Sir W. Chapman, A. (Rutherglen)
Astor, Hon. W. W. (Fulham, E.) Briscoe, Capt. R. G. Christie, J. A.
Baldwin-Webb, Col. J. Broadbridge, Sir G. T. Churchill, Rt. Hon. Winston S.
Balfour, G. (Hampstead) Brooks, H. (Lawisham, W.) Clarke, Colonel R. S. (E. Grinstead)
Balfour, Capt. H. H. (Isle of Thanet) Brown, Brig.-Cen. H. G. (Newbury) Clarry, Sir Reginald
Balniel, Lord Bull, B. B. Clydesdale, Marquess of
Barrie, Sir C. C. Bullock, Capt. M. Cobb, Captain E. C. (Preston)
Colman, N. C. D. Holdsworth, H. Rawson, Sir Cooper
Colville, Rt. Hon. John Holmes, J. S. Rayner, Major R. H.
Conant, Captain R. J. E. Hopkinson, A. Reed, A. C. (Exeter)
Cook, Sir T. R. A. M. (Norfolk, N.) Horsbrugh, Florence Reed, Sir H. S. (Aylesbury)
Cook, J. D. (Hammersmith, S.) Howitt, Dr. A. B. Reid, Sir D. D. (Down)
Cooper, Rt. Hn. T. M. (E'nburgh, W.) Hudson, Capt. A. U. M. (Hack., N.) Reid, J. S. C. (Hillhead)
Courthope, Col. Rt. Hon. Sir G. L. Hume, Sir G. H. Rickards, G. W. (Skipton)
Cox, H. B. Trevor Hunter, T. Roberts, W. (Cumberland, N.)
Critchley, A. Hurd, Sir P. A. Robinson, J. R. (Blackpool)
Croft, Brig.-Gen. Sir H. Page Hutchinson, G. C. Ropner, Colonel L.
Crooke, Sir J. Smedley James, Wing-Commander A. W. H. Rosbotham, Sir T.
Cross, R. H. Jones, Sir G. W. H. (S'k N'w'gt'n) Ross Taylor, W. (Woodbridge)
Crossley, A. C. Jones, Sir H. Haydn (Merioneth) Royds, Admiral Sir P. M. R.
Crowder. J. F. E. Keeling, E. H. Ruggles-Brise, Colonel Sir E. A.
Cruddas. Col. B. Kerr, J. Graham (Scottish Univs.) Salmon, Sir I.
Culverwell, C. T. Keyes, Admiral of the Fleet Sir R. Salter, Sir J. Arthur (Oxford U.)
Davidson, Viscountess Kimball, L. Samuel, M. R. A.
Davies, C. (Montgomery) Knox, Major-General Sir A. W. F. Sandeman, Sir N. S.
Davies, Major Sir G. F. (Yeovil) Lamb, Sir J. Q. Sandys, E. D.
De Chair, S. S. Lancaster, Captain C. G. Sassoon, Rt. Hon. Sir P.
De la Bere, R. Law, Sir A. J. (High Peak) Scott, Lord William
Denman, Hon. R. D. Law, R. K. (Hull, S.W.) Seely, Sir H. M
Danville. Alfred Lees-Jones, J. Selley, H. R.
Despencer-Robertson, Major J. A. F Leigh, Sir J. Shakespeare, G. H.
Doland, G. F. Leighton, Major B. E. P. Shaw, Captain W. T. (Forfar)
Donner, P. W. Lennox-Boyd, A. T. L. Shepperson, Sir E. W.
Dorman-Smith, Col. Rt. Hon. Sir R. H. Liddall, W. S. Shute, Colonel Sir J. J.
Dower, Lieut.-Col. A. V. G. Lindsay, K. M. Simon, Rt. Hon. Sir J. A.
Drewe, C. Little, Sir E. Graham- Smiles, Lieut-Colonel Sir W. D.
Duckworth, Arthur (Shrewsbury) Lloyd, G. W. Smith, Brasewell (Dulwich)
Dugdale, Captain T. L. Loftus, P. C. Smith, Sir Louie (Hallam)
Duncan, J. A. L. Lyons, A. M. Smith, Sir R. W. (Aberdeen)
Dunglass, Lord Mabane, W. (Huddersfield) Smithers, Sir W.
Eastwood, J. F. MacAndrew, Colonel Sir C. G. Snadden, W. MoN.
Eckersley, P. T. MacDonald, Sir Murdoch (Inverness) Somervell, Rt. Hon. Sir Donald
Elliot, Rt. Hon. W. E. Macdonald, Cap). P. (Isle of Wight) Southby, Commander Sir A. R. J.
Ellis, Sir G. MoEwen, Capt. J. H. F. Spears, Brigadier-General E. L.
Elliston, Capt. G. S. MoKie, J. H. Spans. W. P.
Emery, J. F. Macmillan, H. (Stockton-on-Tees) Stewart, J. Henderson (Fife, E.)
Emmott, C. E. G. C. Macnamara, Lieut.-Colonel J. R. J. Stewart, William J. (Belfast, S.)
Emrys-Evans, P. V. Macquisten, F. A. Stourton, Major Hon. J. J.
Entwistle, Sir C. F. Maitland, Sir Adam Strauss, H. G. (Norwich)
Errington, E. Makins, Brigadier-General Sir Ernest Strickland, Captain W. F.
Erskine-Hill, A. G. Mander, G. le M. Stuart, Hon. J. (Moray and Nairn)
Evans, D. O. (Cardigan) Manningham-Buller, Sir M. Sueter, Rear-Admiral Sir M. F.
Everard, Sir William Lindsay Margesson, Capt. Rt. Hon. H. D. R. Suteliffe, H.
Fildes, Sir H. Markham, S. F. Tasker, Sir R. I.
Findlay, Sir E. Marsden, Commander A. Taylor, Vice-Adm. E. A. (Padd., S.)
Fleming, E. L. Mason, Lt.-Col. Hon. G. K. M. Thomas, J. P. L.
Foot, D. M. Maxwell, Hon. S. A. Thorneycroft, G. E. P.
Fax, Sir G. W. G. Mayhew, Lt.-Col. J. Titchfield, Marquess
Fremantle, Sir F. E. Medlicott, F. Tauche, G. C.
Furness, S. N. Meller, Sir R. J. (Mitcham) Train, Sir J.
Fyfe, D. P. M. Meller, Sir J. S. P. (Tamworth) Tree, A. R. L. F.
George, Major G. Lloyd (Pembroke) Mills, Major J. D. (New Forest) Tufnell, Lieut.-Commander R. L.
George, Megan Lloyd (Anglesey) Mitchell, Sir W. Lane (Streatham) Turton, R. H.
Gilmour, Lt.-Col. Rt. Hon. Sir J. Moore, Lieut.-Col. Sir T. C. R. Wakefield, W. W.
Gluckstein, L. H. Moore-Brabazon, Lt.-Col. J. T. C. Walker-Smith, Sir J.
Glyn, Major Sir R. G. C. Moreing, A. C. Wallace, Capt. Rt. Hon. Euan
Gower, Sir R. V. Morgan, R, H. (Worcester, Stourbridge) Wand, Lieut.-Col. Sir A. L. (Hull)
Graham, Captain A. C. (Wirral) Morris, J. P. (Salford, N.) Wardlaw-Milne, Sir J. S.
Grant-Ferris, R. Morris-Jones, Sir Henry Warrender, Sir V.
Greene, W. P. C. (Worcester) Morrison, G. A. (Scottish Univ's.) Waterhouse, Captain C.
Gretton, Col. Rt. Hon. J. Morrison, Rt. Hon. W. S. (Cirancester) Watt, Major G. S. Harvie
Gridley, Sir A. B. Muirhead, Lt.-Col. A. J. Wayland, Sir W. A.
Griffith, F. Kingsley (M'ddl'sbro, W.) Munro, P. Walls, Sir Sydney
Grlgg, Sir E. W. M. Nail, Sir J. White, H. Graham
Guest, Lieut.-Colonel H. (Drake) Nicolson, Hon. H. G. Whiteley, Major J. P. (Buckingham)
Guest, Hon. I. (Brecon and Radnor) O'Connor, Sir Terence J. Wickham, Lt.-Col. E. T. R.
Guest, Maj. Hon. O. (C'mb'rw'll, N.W.) O'Neill, Rt. Hon. Sir Hugh Williams, C. (Torquay)
Guinness, T. L. E. B. Palmer, G. E. H. Williams, H. G. (Croydon, S.)
Hambro, A. V. Patrick. C. M. Willoughby do Eresby, Lord
Hammersley, S. S. Peake, O. Wilson, Lt.-Col. Sir A. T. (Hitchin)
Hannah, I. C. Perkins, W. R. D. Winterton, Rt. Hon. Earl
Harris, Sir P. A. Peters, Dr. S. J. Wise, A. R.
Harvey, Sir G. Petherisk, M. Womersley, Sir W. J.
Haslam, Sir J. (Bolton) Pickthorn, K. W. M. Wood, Hon. C. I. C.
Heilgers, Captain F. F. A. Pilkington, R. Wood, Rt. Hon. Sir Kingsley
Hely-Hutchinson, M. R. Ponsonby, Col. C. E. Wragg, H.
Heneage, Lieut.-Colonel A. P. Pownall, Lt.-Col. Sir Assheton Wright, Wing-Commander J. A. C.
Hepburn, P. G. T. B[...] Radford, E. A. Young, A. S. L. (Partick)
Herbert, A. P. (Oxford U.) Raikes, H. V. A. M.
Herbert, Major J. A. (Monmouth) Ramsbotham, H. TELLERS FOR THE AYES.—
Higgs, W. F. Ramsdon, Sir E. Captain Hope and Lieut.-Colonel
Hoare, Rt. Hon. Sir S. Rankin, Sir R. Kerr.
Hogg, Hon. Q. McG. Rathbone, Eleanor (English Univ's.)
NOES.
Adams, D. M. (Popler, S.) Guest, Dr. L. H. (Istington, N.) Parker, J.
Adamson, Jennie L. (Dartford) Hall, G. H. (Aberdare) Parkinson J. A.
Alexander, Rt. Hon. A. V. (H'lsbr.) Hall, J. H. (Whiteshapel) Pearson, A.
Ammon, C. G. Hardie, Agnes Pethick-Lawrence, Rt. Hon. F. W.
Anderson, F. (Whitshaven) Hayday, A. Poole, C. C.
Attlee, Rt. Hon. C. R. Henderson, A. (Kingswinford) Price, M. P.
Banfield, J. W. Henderson, J. (Ardwick) Pritt, D. N.
Barnes, A. J. Hills, A. (Pontefrast) Quibell, O. J. K.
Batey, J. Hollins, A. Richards, R. (Wrexham)
Burn, Rt. Hon. W. W. Hopkin, D. Ritson, J.
Benson, G. Jagger, J Robinson, W. A. (St. Halens)
Bavan, A. Jenkins, A. (Poatypool) Sanders, W. S.
Broad, F. A. Jenkins, Sir W. (Neath) Sexton, T. M.
Bromfield, W. John, W. Shinwell, E.
Brawn, C. (Mansfield) Johnston, Rt. Hon. T. Silkin, L.
Buchanan, G. Jones, A. C. (Shipley) Silverman, S. S.
Burke, W. A. Kennedy, Rt. Hon. T. Simpson, F. B.
Cape, T. Kirby, B. V. Smith, Ben (Rotherhithe)
Charlston. H. C. Kirkwood, D. Smith, E. (Stoke)
Chater, D. Lathan, G. Smith, T. (Normanton)
Cluse, W. S. Lawson, J. J. Sorensen, R. W.
Cocks, F. S. Leash, W. Stephen, C.
Collindridge, F. Leonard, W. Stokes, R. R.
Cripps, Hon. Sir Stafford Leslie, J. R. Strauss. G. R. (Lambeth, N.)
Daggar, G. Logan, D. G. Summerskill Dr. Edith
Davidson, J. J. (Maryhill) Lunn, W. Taylor, R. J. (Morpeth)
Davies, S. O. (Merthyr) Macdonald, G. (Ince) Thurtle, E.
Day, H. McEntee, V. La T. Tinker, J. J.
Dobbie, W. McGhee, H. G. Tomlinson, G.
Dunn, E. (Rothar Valley) Maclean, N. Viant, S. P
Edwards, A. (Middlesbrough E.) MacNeill Weir, L. Walkden, A. G.
Edwards, Sir C. (Bedwellty) Mainwaring, W. H. Watkins, F. C.
Fletcher, Lt.-Comdr. R. T. H. Marklew, E. Watson, W. MeL.
Frankel, D. Marshall, F. Westwood, J.
Gallacher, W. Maxton, J. Whiteley, W. (Blaydon)
Gardner, B. W. Milner, Major J. Wilkinson, Ellen
Garro Jones, G. M. Montague, F. Williams, E. J. (Ogmore)
Graham. D. M. (Hamilton) Morrison, Rt. Hon. H. (Hackney, S.) Williams, T. (Don Valley)
Green, W. H. (Deptford) Morrison, R. C. (Tottenham, N.) Windsor, W. (Hull, C.)
Greenwood, Rt. Hon. A. Muff, G. Woods, G. S. (Finsbury)
Griffiths, G. A. (Hemsworth) Nathan, Colonel H. L. Young, Sir R. (Newton)
Griffiths, J. (Llanelly) Noel-Baker, P. J.
Groves, T. E. Paling, W. TELLERS FOR THE NOES.—
Mr. Mathers and Mr. Adamson.

Question, "That the Question be now put," put, and agreed to.

Main Question put.

The Committee proceeded to a Division.

The CHAIRMAN stated that he thought the Ayes had it; and, on his decision being challenged, it appeared to him that the Division was unnecessarily claimed, and he accordingly called upon the Members who supported and who challenged his decision successively to rise in their places, and he declared that the Ayes had it, five Members only who challenged his decision having stood, up.

Resolved,

"That it is expedient to amend the Defence Loans Act, 1937, so as—

  1. (1) to increase to eight hundred million pounds the limit on the aggregate amount of the sums which may be issued out of the Consolidated Fund under Sub-section (1) of Section one; and
  2. (2) to include in the expression 'Defence Services' the following civil services, namely, Air-Raid Precautionary Services and grants-in-aid of the Essential Commodities Reserves Fund:"

Resolution to be reported upon Thursday; Committee to sit again upon Thursday.

The remaining Orders were read, and postponed.