HC Deb 21 September 1939 vol 351 cc1092-180

Question again proposed, "That this House do now adjourn."

Mr. Burgin

I was dealing with the number of Royal Ordnance factories and I was asked how many of them were actually in production at present. I have not the information available, but I hope to secure it before I sit down. I hope the House will realise that, when I say six factories have been started since the outbreak of war, it is apparent that they cannot be in production, but it is common knowledge that a great many Royal Ordnance factories are producing. The actual number is of relatively minor importance, but I will endeavour to secure it, and I hope to give the hon. and gallant Gentleman the information for which he asks.

Major Milner

The Government have had the matter in hand for four or five years.

Mr. Burgin

We are not talking of the same thing. The hon. and gallant Gentleman is trying to make party capital—

Major Milner

The right hon. Gentleman has no business to make a remark of that sort. I am entitled in the national interest to draw attention to the fact that his figures are wholly illusory.

Mr. Burgin

I am endeavouring to give information of anything but an illusory character. I am stating that four Royal Ordnance factories were available at the beginning of the defence programme, which is a date well within the period the hon. and gallant Gentleman mentions— much less than five years. Eighteen have been put in hand since then and six have been put in hand since the outbreak of war. There are 28 Royal Ordnance factories owned completely by the nation, and I quote that fact as a justification of the statement that I made earlier that there is a system of national factories. I will endeavour to procure the further details in a few moments.

In dealing with the question of the number of firms with whom orders have already been placed, the House will not overlook such considerations as those that I am about to advance. In peace time the volume of orders to be placed was not big enough to spread over more than a certain field. Some of the orders involved the provision, at Government expense, for Government ownership, of considerable plant, which could only be installed in works with adequate technical staffs to run them. Many firms engaged on their normal civilian trade were not anxious, so long as the demand for their standard articles continued, to swing over from civil trade, with its competitive possibilities, to armament manufacture on a strictly controlled price basis, or in many cases were unable to do so owing to their other contract liabilities. A number of the firms in the last class now, finding themselves with their civilian trade cut off, are in increasing numbers offering to carry out war work, but their plant and their premises are not always capable of instantaneous adaptation to the swing- over, and that process must inevitably involve gradual absorption and gradual adjustment.

Hon. Members who ask that small firms should be utilised and their capacity brought into production are pushing at an open door. Everything possible along those lines is being done, and will continue to be done, and I and those associated with me will welcome contributions from hon. Members and firms up and down the land who bring their capacity to us, but I am sure hon. Members will appreciate the desirability of ascertaining in the first instance whether the firms in question have real manufacturing capacity or knowledge. I am, however, at the same time most anxious not to dissipate effort. The House must bear in mind that it is a lesson learned from experience that too rapid sub-contracting, too extensive distribution, although it ensures in years to come a greater total output, inevitably for the moment slows down actual supplies. It is a very delicate balance that has to be maintained between the desire for immediate production in the first six or 12 months from the outbreak of the war of essentials for instantaneous use against the enemy on the one hand, and the necessity to provide on an enormously extended basis for an even greater further supply of commodities such as, for example, ammunition at a later stage in the war.

I say it is a delicately poised balance in which, of course, the requirements of the War Office must be paramount. It is primarily a question of strategy, primarily a question for the Fighting Services themselves to determine which of the two efforts should have the greater emphasis in the early stages of the war. I say at once that, whatever emphasis is placed on the necessity for immediate and rapid production of certain commodities, I am convinced from experience, and from the history of the Ministry of Munitions in the last war, and from contacts with its great leaders, in particular the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) and my right hon. Friend the First Lord of the Admiralty, with both of whom I have had discussions on these matters, that the second aspect, the production on the widest possible basis of essential munitions, must always have adequate emphasis and must take a very front place in the planning of the Ministry.

As to the best way in which the capacity of the individual smaller shop can best be used, I have great hopes that an area organisation which we have set up, and again of which I will give details in the Official Report, but the main outlines of which are as follows, will help. We have divided the country into 13 districts —I will give the locations and the addresses in the Official Report—each with a nucleus staff, with a trained capable engineer in charge for the purpose of overcoming all local difficulties as regards transport, labour, overlapping of requirements and with a view to ensuring that the whole productive capacity of the country is utilised to the full. Those areas, which conform geographically to the regional boundaries of the Civil Commissioners, have been set up and the officers there will have contact with the local Divisional organisation of the Ministry of Labour and other Ministries and other Government Departments and with industrial organisations. It is only in skeleton form. It will be functioning fully at an early date, and I want that channel of communication fully to be utilised not

Ministry of Supply—Area Organizations.
Title and Abbreviation. Area Officer. Address. Telephone.
1.Northern, (N.) … Engineer Rear-Admiral F. E. Dean, C.B. Collingwood Buildings, Collingwood Street, Newcastle-on-Tyne. Newcastle 20943/4.
2. East and West Riding (E. and W.R.) Engineer Rear-Admiral O. W. Skinner. Queen's Buildings, Queen's Street, Sheffield 1. Sheffield 22884.
3. North Midland (N.M.). Major E. H. Allday … Sherwood Buildings, Sherwood Street, Nottingham. Nottingham 2295.
4. Eastern (E.) (a) … Major C. B. Morris, C.B.E., M.C. 2, Benet Street, Cambridge … —
5. London and South Eastern (L. and S.E.). Major J. A. Scrutton, M.C. Room 289, Ministry of Supply, Adelphi, W.C.2. Gerrard 6933 Ext. 85.
6. Southern (S.) (a) Engineer Captain J. J. Sargent. King Edward Building, Station Road, Reading. Reading 3021.
7. South Western (and Wales) (S.W.). Engineer Rear-AdmiralA. W. McKinlay. Royal London House, Queen Charlotte Street, Bristol. —
8.Wales(b) … … See under 7.
9.Midland (Mid.) … Engineer Rear-Admiral F. S. Carlisle, C.B.E. Council Chambers, 109 Col-more Row, Birmingham 1. Colmore 4052.
10. North Western (N.W.). Engineer Commander A. Young. Picaddilly House, Picaddilly, Manchester. Deansgate 2947.
11. Scotland (and N. Ireland) (Sc). Major Jackson Millar … 141 Bath Street, Glasgow 2 Glasgow, Douglas 2759.
12. South Eastern (S.E.) (b). See under 5.
13. N. Ireland (N.I.) (b ). See under 11.
(a) Will open shortly. (b) To be formed later.

only for settling local difficulties but for drawing the attention of Departments to capacity which has or may become available.

Mr. Ellis Smith

Could the Minister give us a few of the names of those who are going to be in charge?

Mr. Burgin

A number of them are ex-engineer-admirals of the Fleet, men of unquestioned engineering capacity.

Mr. Stokes

But knowing nothing about industry.

Mr. Neil Maclean

Are these committees which are being set up in skeleton form in the different regions for the purpose of accepting requests from small firms in those areas to investigate their plants?

Mr. Burgin

Yes, Sir, they are. I am giving in the Official Report the names, addresses, telephone numbers and details of the organisation for each of the divisions of the country, with the actual boundaries of each of the 13 divisions. I have all the information for which the hon. Member asks. I hope in a moment or two to show him what I regard as one of the most useful functions which these area organisations can do.

Following are the details referred to:

Boundaries of the Area Organization of the Ministry of Supply.
Title and abbreviation of Area. Boundaries.
No.1. Northern (N.) … … … … Northumberland, Durham and the North Riding of Yorkshire.
No.2. East and West Riding (E. & W.R.) … East and West Ridings of Yorkshire and York C.B.
No.3. North Midland (N.M.) … … … The Counties of—Derbyshire, Notts., Lincolnshire, Leicestershire, Rutland, Northants, and Soke of Peterborough.
No.4. Eastern (E.) … … … … The Counties of—Huntingdonshire, Cambridge-shire, Norfolk, Suffolk, (E.& W.), Bedfordshire, Isle of Ely, Essex (less portion in 5 Area), and Herts. (less portion in 5 Area).
No.5. London and South Eastern (L. & S.E.) The County of London—the County of Middlesex and the under mentioned in the four Counties shown below
Essex. Kent. Surrey. Herts.
East Ham. Penge. Croydon. Cheshunt.
West Ham. Erith. Richmond. The Barnets.
Waltham Cross. Bexley. Barnes. Bushey.
Chingford. Crayford. Wimbledon. Watford.
Chigwell. Chislehurst. Kingston-on-Thames.
Dagenham. Orpington. Malden.
Wanstead. Beckenham. Surbiton.
Walthamstow. Bromley. Mitcham.
Ilford. Sutton.
Leyton. Epsom.
Barking. Carshalton.
Merton.
Beddington.
Coulsdon and Purley.
Banstead.
Esher.
No.6. Southern (S.) … … … … The Counties of—Oxfordshire, Bucks, Berks, Hants, Isle of Wight, Surrey (less portion in No. 5 Area) and Dorset (Poole B).
No. 7. South Western (S.W.) (and Wales) … The Counties of—Gloucester, Wilts, Dorset (less Poole), Somerset, Devon, Cornwall, and Wales.
No. 8. Wales … … … … … See under 7.
No. 9. Midland (Mid.) … … … … The Counties of—Shropshire, Stuffs, Warwick, Worcester, Herefordshire.
No. 10. North Western (N.W … … … The Counties of—Cumberland, Westmorland, Lancs and Cheshire,
No. 11. Scotland (Sc.) … … … … All Scotland and Northern Ireland.
No. 12. South Eastern (S.E.) … … … See under No. 5. Includes Kent (less portion in No. 5 Area) Sussex East and West.
No.13. N.Ireland (N.I.) … … … See under No. 11.
Mr. George Griffiths

What about the qualifications of these people?

Mr. Burgin

They are self-evident. I want this area organisation to keep a close eye on the progress of armament orders and to work in liason with the Ministry of Labour on labour questions. I am hopeful that it will be possible from time to time to have on exhibition in each of those centres a number of samples of articles of which almost illimitable quantities will inevitably be required, together with full manufacturing instructions, estimates of quantities and indications as to price. I hope that firms who believe that their organisations although they have not already been brought to our knowledge, are capable of performing one or other of these manufacturing tasks will rapidly get into touch with the area organisation, will have contact, will see for themselves and then, after looking into the problem, including perhaps visits to the works of firms in the area already in production, will make their offer. But without waiting for any of these movements from below to happen, my officers will continue to scour the countryside in their endeavour to obtain additional capacity and the necessary machine tools, whether they be second-hand, whether they be rebuilt, whether they be reconditioned, and to obtain premises and manufacturing capacity. The process is continuing daily and hourly, and some indication of the extent of what is at work in this direction may be gauged from the fact that since the outbreak of war, 18 days ago, orders for further supplies have been placed by my Department exceeding £70,000,000 sterling in value.

Major Milner

Can the right hon. Gentleman say how small firms will know what to tender for?

Mr. Burgin

I have just said that there are to be samples placed in the premises of the organisations and that they are articles of which an illimitable quantity will probably be required. I have in mind the breaking down of composite articles into components, and allowing small firms to manufacture some relatively simple article in almost illimitable quantities, under supervision, of course; and I am in great hopes that by that method a vastly increased total can eventually be secured. This is only one of the methods by which the small firms are to be utilised. Another method would be the grouping of a number of them into some larger organisation.

There are two further topics upon which, in this opening survey, I would wish to comment, and I apologise to the House for the time I am occupying. One is the question of machine tools, and the other is the question of prices, control of prices and prevention of profiteering, matters in which I know the House takes a very keen interest and which are at this moment questions of urgent national importance.

The machine tool industry suffered very adversely in the depression of 1931 onwards. Some firms actually went out of existence. The industry has made great strides since those days, and now makes a very substantial contribution to the nation's economy. There are normally many millions of pounds of machine tools exported every year, and there is an importation into this country also of some millions of pounds sterling. The machine tool industry is to the nation as the tool room is to the factory. Without the tool the factory cannot produce. Without the machine tools the country's production is handicapped.

The expansion of the Army supply problem coincides with the expansion and the development of the Air Force and with certain increases in the Navy, and coming at a time when Civil Defence also comes into the picture there is a combined demand upon the machine tool industry far greater than the entire industry on its normal footing can meet. There must necessarily be considerable expansion of machine tool output, and there must necessarily be purchases from overseas. I deliberately refrain from giving details. The matter is a delicate one, and, in the national interest, does not admit of much in the way of debate, but I would say to the House that I am satisfied that the machine tool industry is making an immense effort to comply with Government requirements, that it is making a most powerful contribution to armament supply, and that I am convinced that the call upon that industry to double and redouble its efforts to meet the demands for armaments which we are making, and which we are bound in the future to have to make, upon them will meet with a willing response.

I turn now to the question of profit, control of prices and profiteering. The idea that an industrialist, a group of manufacturers or an individual, should make an ill-gotten profit out of the necessities of the nation is repugnant, and the House will back the Government in any steps the Government may think fit to take to see that these malpractices and abuses do not occur. The Ministry of Supply is equipped with powers under the Ministry of Supply Act to control prices, to check costs and to limit rises in price throughout the whole realm of armament production. It has in their Raw Material Section set up Controllers for essential commodities. They in their turn have carefully worked out schemes to control the prices of the raw materials, and whilst every effort is made at source, at the time of placing the contract, to prevent an undue profit being made, should, notwithstanding this vigilance, an undue profit accrue, the Armaments Profits Duty is there to take for the benefit of the public the surplus of profit ascertained in accordance with the Finance Act.

I do not need to dwell on the matter to-day, but I want to give to the House an emphatic assurance, just as emphatic as I have given in the realm of supply itself, that prices, costs, profit and profiteering will be scrutinised ceaselessly in the national interest.

There is no single factor of greater importance than that representatives of organised labour should approve the general framework of the expansion scheme. In the last War labour questions affecting munitions supply were largely dealt with by the Ministry of Munitions. This time it is the considered view that it is preferable that the relations of industry and labour should be the concern of my right hon. Friend the Minister of Labour and the recognised machinery of his Department. I announce, therefore, as a matter of Government policy, that it will be my intention and desire throughout the whole programme of munitions supply to request the Minister of Labour to provide the machinery for dealing with labour problems.

It is my conception that the Ministry of Supply has a different function and responsibility in respect of those factories which it controls itself, such as the Royal Ordnance Factories and the factories in respect of which it issues contracts. In the Royal Ordnance Factories, both as regards supply of labour and regulation of labour, the Ministry of Supply are in exactly the same position as any other employer. In the matter of labour supply they will state their demands to the Ministry of Labour and National Service, who will endeavour to supply them. Wages, conditions and disputes, if there must be disputes, will all be handled through the established joint machinery. If further advice were needed the Industrial Relations Department of the Ministry of Labour and National Service will be called in.

In the case of contractors, including factories run on agency terms, where any question of labour supply arises application will be made to the Ministry of Labour, and it will be the business of that Ministry, after verifying the demand, to seek to supply it, and if the Ministry of Labour find themselves unable to fulfil the demand it will be their business to approach the responsible bodies on both sides of the industry concerned and to discuss with them the best means of meeting the situation.

It will in general be desirable for representatives of the Ministry of Supply to be associated in such discussions. Wherever questions of wages, conditions and disputes arise the matter will, in the first place, be handled by the joint negotiating machinery in the trade concerned. In the event of difficulty recourse will again be had to the Industrial Relations Department of the Ministry of Labour. I, personally, have no doubt that by this means maximum attention will be given to all those matters to which hon. Members in all parts of the House rightly attach such capital importance.

In conclusion, I would say that it is my conviction that this will be a war of surprises, a war in which there will never be any leisure, a war in which it will be absolutely essential to have elasticity of mind, great daring of conception and vision, and absolutely no hesitation on the ground of size. This war, as has been the case in other wars, will throw up problems of its own. There will be new inventions, new methods of attack and defence, new weapons and new discoveries, especially in the realms of communications and of chemical manufacture and requirement. How fortunately this country finds itself placed in all those regards. There are the immense chemical industry and the immense electrical and wireless industries, to take only three examples. Let me assure the House that from industry generally, employers and workpeople, the fullest possible co-operation has been given and is being enjoyed. Whether in the Royal Ordnance factories themselves, in the great armament contracting firms, in the main engineering firms that have borne the brunt of the work, or in the smaller contracting firms, I have not personally known of an instance of a hitch between employer and worker, and I know of no instance of retardation or slowing down of production. The reports that I have collected to-day just before coming to the House enable me to say that the flow of raw materials, willingness of workpeople, capacity of firms, and ability of management, are all unstintingly at the service of the State.

I hope this survey will have been of interest. I have been able necessarily only to touch the fringe of the subject but if, with that general picture in their minds, hon. Members will ask their questions, my hon. and gallant Friend the Parliamentary Secretary to the Ministry of Supply will endeavour at the conclusion of the Debate to give satisfactory replies. The country is in a mind for bold endeavour and for resolute action and is prepared both to work and to pay. We must not delay. I am conscious of the tremendous responsibility which the provision of supply involves. A Department like that of Supply must involve organisation, but there has been a transformation of organisation already. I am aware of the limits to my own powers. I ask for the support of the House and the country in the fulfilment of so great a task.

5.3 P.m.

Mr. Arthur Greenwood

I have listened with profound dismay to the speech of the right hon. Gentleman. I think it is perhaps the most unfortunate speech which this House has heard since the beginning of the new Great War. If I understand it aright, the dead hand of officialism is to throttle the national effort. I can see it to-day in this vast mechanism which the right hon. Gentleman is building up. I remember an old friend of mine who crossed the Floor, the late Viscount Snowden, and who described the programme to which he had been pledged and to which he was a party, as bureaucracy gone mad. I have never heard anything so bureaucratic as the machinery which the right hon. Gentleman has outlined to us for discussion. I grieve to say this because, in recent weeks, I have spoken with studied moderation of language; but this is a matter in which we are vitally concerned, and I think, therefore, that I am entitled, on this occasion, to speak somewhat strongly.

The right hon. Gentleman has told us about our ordnance factories. Let me put this to the House as a matter of organisation. Apart from the Government factories, about which I will say a word in a moment, there is only one recognised armaments manufacturer in the country, and that is Vickers Armstrong. There are other firms who are armament makers, such as the English Steel Corporation, Had fields and Beard-mores, who are concerned with highly specialised jobs. I will not go into this matter in detail, because I have no doubt that the details are known generally. That is all right so far as it goes; but the right hon. Gentleman has told us that that organisation, plus Woolwich, which is now vulnerable—which I hope is not disclosing anything to the enemy—has been strengthened by several national factories and that others are in course of construction.

National factories in the last Great War were of enormous importance, from two principal points of view. They had a tremendous influence in breaking down those prices which the expert costing accountants had proved could not be reduced. The effect on the output there was to save this country not scores but hundreds of millions of pounds. They not only served that purpose; they succeeded in breaking through the standardisation which the War Office in the old days thought, and apparently still thinks, is the only standard by which you can carry on production. Those factories simplified processes, broke down processes and made for a simplification at which, prior to the war, those brass-hatted gentlemen of the War Office would never look for one moment. That is good, so far as it goes. There are other resources. The right hon. Gentleman has told us that he will utilise all the resources of the smaller manufacturers, and so on. I suggest to him that the machine which he is building is an attempt to extend the normal war production machine. That is all right within limits, but it does not fill the bill. In the last war, if it had not been for those area munitions committees whose output was tremendous and who mobilised the skill and the knowledge of manufacturers and workpeople in every area in the country, we should have lost the war.

What is the right hon. Gentleman's way of dealing with this situation? He is establishing 13 area organisations, with a trained, capable engineer in charge, even ex-engineer admirals. What will the Yorkshire and Lancashire manufacturers and workpeople say to that? There will be negotiations with the employers, but if the Government think that they can mobilise the industrial power of this nation by 13 ex-admirals I tell them that they have failed upon the outset. I say that, because this matter is tremendously important. It is no good the right hon. Gentleman saying that we are pressing at an open door, and that he wants to use all these resources. There is not one man of any importance who was in the last organisation from 1915–18, and when the Ministry of Munitions came into being, who is really being frankly consulted by the right hon. Gentleman. In recent days I have myself seen people who helped to build that war production-machine, and their services have not been asked for. I do not believe that you can get that massed output, on a scale undreamt of up till now, by utilising the fertile brains of civil servants and the services of engineer ex-admirals. It cannot be done in that kind of way.

I am frankly disappointed that the right hon. Gentleman, although he is open to co-operation, has not taken into council those who did it last time. An ounce of experience is worth a load of theory. His business ought to have been to have called in men who did it in the last war—I can mention names if he likes—to have infused new blood by bringing in young men acquainted with modern requirements and understanding modern developments, and to have tried to mobilise every atom of industrial energy that this country possesses. The right hon. Gentleman's bureaucratic system will not work. It will have to be very seriously revised. I am only saying what other people pointed out before the bad times came in the last Great War. I do not pretend to be any prophet, but I can profit by the experience gained in the last war, and point out the difficulties that are likely to befall unless we harness the willing co-operation of industrial employers and employés.

I do not believe that this can be run or directed from Whitehall. That would be quite impossible. This structure in the country of area committees, with skilled engineers in charge, is, I warn the Government, most likely to break down. I put this in all seriousness. This country will not permit a repetition of the bloody shambles of the last Great War through lack of supplies. Britain will not send her sons to suicide clubs, to be mown down by greater weight of metal; but she will send her sons to fight and to sacrifice if they go with their implements in their hands and their reserves and supplies behind them. I am satisfied that this idea, which broke down in the last war, will break down now. I could take hon. Members to, not scores, but hundreds of shops in the engineering and allied industries where the managers and the charge hands could devise ways and means of doing things which the civil servant would say were utterly impossible. [An Hon. Member: "They have done it."] Yes, they did it in the last Great War.

I come to a matter which I have left to the last, and which I am sorry I have to raise. The right hon. Gentleman left to the last the question of labour. When those words of his are heard outside there will be the deepest disappointment in the ranks of the trade union movement of this country. What were the words he used? He said that the relations of industry and labour—a beautiful distinction, industry and labour—are to be the concern of the Ministry of Labour. The right hon. Gentleman referred to labour problems, and then he spoke of his conception of the Ministry of Supply. That conception is not mine. That conception is not the conception of the Labour movement, without whose help and co-operation this Government cannot stand for another day. I say that emphatically. I have spoken on this matter on two occasions in this House. I am sorry to have to go on and repeat my words, but on the Second Reading of the Compulsory Service Bill I had to get up here and swallow what I had said a few months before. I do not mind taking my words back in public if circumstances change, but I said that if we were going, at this stage of the war, to commit ourselves to wholesale conscription of our young people there were other things which must go with it, and I outlined some of the major problems which have been referred to since but which have not been settled, such as the question of profiteering. We are slowly and majestically approaching the stage when we may have a Bill to deal with the really bad profiteering.

But I also said, and I repeated it last Thursday, that in this matter the organised Labour movement is determined that it shall not be treated as a poor relation. I want the House to understand this. It is not that we are making impossible claims. We want to help, but we can help only if we are treated with dignity and respect. The Labour movement cannot be regarded as a sort of helot class, whose grievances about labour conditions may be settled so that they will make better slaves in munition factories and mines. I ask, as I did last week, that labour, in this problem of production, should be treated on a basis of equality. The Civil Service is one thing, but these vast problems of production, which require experience, skill and adaptibility, can be solved only by people who are themselves in the industry. Therefore, we ask that organised employers and organised labour should, as I said last week, be brought in on the ground floor. The result of my appeal last week has been precisely nothing. There has been no approach whatever to what I might call the proper democratisation of the industrial system.

The right hon. Gentleman said that everybody has co-operated very wel1— employers, trade unionists and so on. That is true, because they are loyal: they want to make no difficulties. But I am bound to say that the more you bring them into the foreground of the picture, the more you give them responsibility, the more you relieve them from ex-engineer Rear-Admirals and give them responsibilities of their own, as was done in the last war, the more that co-operation and service which they are giving will be multiplied. I am sorry to have to speak so strongly—and, as some people may think, perhaps too passionately—but I am uttering a grave warning to the Government. I hope that the warning will be regarded. I ask the Government, before they have have wasted precious time which they can never recover, to realise that days of delay may prolong the war by weeks, and that prolongation of the war by weeks may mean the death of hundreds of thousands of people. I ask the Government, before we waste precious time, to get men of heart and brain and loyalty into the machine for the purposes of production, and work which they understand, with experience and knowledge which they are prepared to bring to the public service—experience and knowledge which the Civil Service, with all its qualities, cannot, in the nature of things, possess. My last reference is that unless these steps are taken, unless this co-operation is sought frankly and fully, public confidence will be under-mined, and the Government will find themselves facing a storm of public criticism which they will be unable to survive.

5.21 p.m.

Sir Percy Harris

The right hon. Gentleman has spoken with great energy and has been severely critical. I do not believe that that will do any harm to the Government; on the contrary, it is a good thing for the House of Commons to show even greater energy and be prepared to plod on in this great task of winning the war. I do not want to under-estimate the great effort which has been made by the nation, industry, labour and the Government in the last few months. This is not the time to rake up old controversies. Probably, as this Department has been in existence only since last April, it has achieved considerable things, but it is a pity that the Government did not show greater vision and did not listen to wise counsels and bring this Department into existence three or four years ago, since when it would have been enabled to accumulate experience and knowledge, and would now have been completely efficient instead of having to learn its lesson.

What we want at the moment is "push and go." There is a feeling in the country that we are not at present pulling our full weight. After making all allowances for the transfer from peace to war, I am convinced, as are many people outside, that we are not yet taking full advantage of our industrial possibilities. This country has great industrial traditions and probably possesses the finest skilled mechanics in the world. Our experience of the last War, during four dreary years, was that, before we had finished, we had to utilise every man and every woman, and every plant in whatever part of the country it may have been. The Prime Minister in his statement yesterday said that we must develop our plans in an orderly way. That is clearly a sound policy, but I am afraid that, just as "Time and tide wait for no man," the Nazis will not wait for our convenience and delay action until we are able to complete our plans in an orderly way. It is said that the theory of our enemy is a quick war. Germany undoubtedly is ready to the last button. They have sacrificed everything and concentrated upon everything in completing their war machine. Our Government must not be complacent, and I hope that that is not the attitude of the right hon. Gentleman. We must speed up our machine and not be too anxious to organise things in an orderly way.

Time is an essential factor. The first six months will probably be the most critical period. I recognise—and the right hon. Gentleman gave evidence of it —that full use has been made of the big industries and factories. But the peculiarity of British industry is that it consists of a thousand and one small factories of all kinds and sizes, spread throughout the length and breadth of the land. Many of the men who run these small factories are most skilled in engineering, and some of the firms, being new, are enterprising and up to date. It is common knowledge that in many areas serious unemployment is growing, particularly in some of the most efficient industrial areas. Unemployment is a wicked waste in peace—time, and it is a more wicked waste in war—time, and nothing will do more to sap the morale of the people than idle men standing at the street corners at a time when we ought to be making the greatest industrial effort.

The right hon. Gentleman referred to the industrial survey that was completed long ago. There is some talk of a census of capacity. I believe that by using existing machinery, you could get a complete industrial survey without much difficulty. There are the Employment Exchanges under the Ministry of Labour where there is an immense amount of information, not only as to the labour available, but as to the industrial capacity of each district. There are the Home Office factory inspectors, the local authorities— the city and borough councils—and, above all, as the right hon. Gentleman the Deputy-Leader of the Opposition said, there are the trade unions whose close co-operation, knowledge and experience are vital if we are to make the best use of our industrial capacity. The normal trade in many industries has been more or less paralysed. Many factories find their ordinary trade, not only abroad, but at home, brought more or less to a standstill. It is common knowledge to every hon. Member that many of our industries and factories are not being used to the full at this time. I have given the right hon. Gentleman one or two examples personally. I have received a very remarkable letter, which is worth quoting, sent to me by the London Chamber of Commerce. This firm writes: We have an up-to-date factory with trained personnel capable of light engineering work, turning and fitting, and also precision work of the highest grade in one particular department. We have for some considerable time past been manufacturing our own electric clock movements and have a trained staff for this purpose who could quite easily be turned over to the production of small turned metal1 parts, repetition work in metal, etc. In our Astronomical Department we are capable of work of the highest precision and accuracy, as is evidenced by the fact that we are makers of the world renowned Synchronome Free Pendulum which measures the time of the world at Greenwich and is also installed in most other observatories all over the world.

Mr. Stokes

Can the hon. Gentleman say how many people that firm employs, so that we may have some sort of an idea?

Sir P. Harris

It is an example of a small firm of highly skilled and trained men. The number they actually employ is 70. That is small compared with some big firms. We think you will agree that it would be a pity that a firm capable of such high precision work and capable of maintaining national prestige in its own particular field should be allowed to disintegrate through the circumstances of the war, particularly when it is so admirably laid out to turn over to production of articles which may be required by His Majesty's Government for supplying the forces in the field. The firm tell me that they wrote three weeks ago to the Ministry of Supply and have received no answer. They have also written to other Departments. I only received their letter this morning. They say: We ought to mention that we ourselves have written to the Ministry of Supply and so far have received no reply whatsoever. That is typical of other firms. There is a screw loose somewhere. It may be, as my right hon. Friend suggests, that there is too much centralisation, too much bureaucracy, too much channel of communication, too many reports before the Minister can be got at. The right hon. Gentleman would do well, before he gets snowed under by a complicated machine, in a very fine building, and a great number of officials, to examine more closely whether he cannot simplify the procedure and get greater and more direct contact with industry throughout the country. He spoke with some natural pride of the fact that he has 6,000 contractors. That may seem a large figure, but when we remember our industrial capacity that number should not impress us much or make us complacent.

I should like to refer to the position of industries in so-called danger zones. I am told that there is a natural reluctance to place large contracts in many of those areas, with the inevitable result that there is unemployment. The Government must make up their mind one way or the other. If they are determined not to give these great industrial districts that happen to be in danger zones, which apply to many parts of the country and not merely to London, they must seriously consider the transferring of plant and labour. Nothing could be more unwise and more foolish than to allow labour and plant to lie aside, when every effort should be made to use the full industrial capacity of the country. It may not be advisable to manufacture munitions in some of these areas, but there are such things as machine tools and similar commodities which could well be produced in these large areas which happen to be called danger zones.

There is an alternative policy. Is it not worth while considering whether industries in these areas should be switched over to the export trades, while in the safer areas firms previously engaged in export trade should switchover to munitions? There might be some difficulty about that, but at a time like this it is the business of the Government to get over difficulties. Manufacturers must realise that the national interests come first. They must not be permitted to allow their selfish interests to come in the way of the successful prosecution of the war. Sections of industry should be persuaded to pool their resources. I understand that in some industries organisations have been got going for that purpose. I say to the right hon. Gentleman that where there is opposition or obstruction to the better organisation of the national resources, then if persuasion fails he should right away make use of the powers with which Parliament has vested him. Compulsion must be used. Nobody likes this kind of machinery in normal times but there must be a realisation of the fact that this is a matter of life and death and that our abstract theories must go to the wall in order to make the most effective use of our national resources. If we are defeated on land, on the sea, or in the air because of the lack of munitions, all the industries of the country will be ruined. Therefore, the right hon. Gentleman would be justified in bringing every pressure on the industries of the country to co-operate with him in switching over our industrial resources from peace production to war production.

I recognise that our exports must be maintained. In the last war a great deal of our success was due to the strength of our credit and our financial position. We must be in the position to pay for our imports. From what I hear from chambers of commerce there is an impression that every obstacle is being placed in the way of manufacturers maintaining their export trade. I recognise that some form of licensing is inevitable in war-time to prevent goods going to the enemy from neutral countries, but, as was the case in the last war, I am told that the machinery is unnecessarily complicated. Before a licence can be obtained the approval of the new Department which has been created for the purpose, the Ministry of Economic Warfare, has to be given, then the approval of the Ministry of Supply and very often the approval of the. Admiralty and the Air Ministry, and then on the top of it the approval of the Overseas Trade Department. It might be well for the various Departments to co-operate in order to simplify their procedure, so that in the great task of utilising the industries of the country for munitions production the export trade should not be unduly handicapped or made difficult. I am glad the right hon. Gentleman recognises that. Many traders have their staffs depleted and undue delay means missing steamers and losing markets. It is vital that the interests of our export trade should not be ignored.

I should like to refer to the statement of the President of the Board of Trade that he has serious intentions of bringing in without delay a Bill to deal with profiteering. It is very difficult to give examples of profiteering when challenged, but it is common knowledge that profiteering is going on. It might be advisable that a list should be published of the prices of certain commodities which the Government consider reasonable. Even more than the question of profiteering, however, is the importance of rapid delivery of supplies. I could give examples of essential weapons in regard to which there is a shortage, but that would be giving information to the enemy. If the statement is challenged, it would be necessary to have a secret Session. There are some commodities to which one could refer, such as blankets. I am told that there are Territorials in camp at the present time who are not able to get supplies of blankets, and I hear from various parts of the country of AR.P. work being immensely held up by shortage of supplies in this respect. Here is a commodity which is essential, and if a Government Department would organise the industry I am satisfied that the demand could be met.

One trouble I am told is that some firms are allowed to keep their export trade at the expense of those firms who are carrying out contracts for the Government. I understand, however, that there is now a highly organised section in the Ministry of Supply dealing with textiles, and I hope that as a result many of the difficulties will be overcome. The right hon. Gentleman must make it clear to traders and manufacturers that they must use their resources. The Government must use its powers to the full, and if there are delinquents, if there are people who are putting their private interests before the interests of the nation, they should be made an example. It would have a very salutary effect. It is criminal to ask men to risk their lives and suffer untold discomforts without the essentials for fighting our battles overseas.

In the last day or two we have been pressing the Government to make better use of voluntary offers for service. The excuse for not accepting these offers is that the equipment is not available. As long as there is a shortage of equipment so long shall we criticise the Minister of Supply. It is the business of the House to keep the Ministry up to the mark. I remember during the last war, when I took my seat after a by-election, that a soldier dropped from the gallery near the clock on to the Floor of the House. It seemed to be a protest against my election, but the real reason for the action was the shortage of steel helmets in the firing line. There were very few steel helmets in the early days of the war. That protest had a salutary effect and before long the needs of the Army were met by the Supply Department. The right hon. Gentleman has the advantage of our experience of the last war. He starts with that great advantage, and if he fails to achieve the purpose for which he was appointed it will be a great responsibility. We wish him well in his big task. We ask him to realise his responsibilities, to exercise his imagination, and above all his courage, and not to be afraid of tackling vested interests when they stand in the way of national needs.

5.43 p.m.

Mr. Clement Davies

I am sure that the House and the country will welcome the opportunity which has been given to the Minister of Supply to make his statement this afternoon. Although the war has been going for only 18 days there is throughout the country a feeling of uneasiness that we are not getting to grips with the very serious situation which confronts us. It is an entirely different situation from that which confronted us on 4th August, 1914. At that time the war came upon us almost like a thief in the night. Most of us thought that war was unbelievable. We had no experience, we knew not what to prepare for, and for a long time this country went on in much the same old way as it had before. Then came the terrible awakening of 1915, 1916, 1917 and 1918, a bitter experience, which the people of this country has not forgotten. That is not the position to-day. For at least two years, in fact four years, there has been a trepidation, a fear, that one day this calamity would befall us, and for the last 12 months there has been almost the certainty that it would fall. The country has therefore expected preparation for the calamity when it did befall us. It is no good the Minister saying that he has been in office only a short time, as the Chancellor of the Duchy said the other day. The material is there, and the offices have been in existence. It may be that the Minister himself has been responsible for the office for only a short time, but the country expected that preparations would have been made.

The Minister of Supply rightly said that he has been Minister-designate for some months, but he did not shelter himself for one moment behind the short period during which he has been in control. I am sure he will recognise that when criticism comes from any quarter of the House it is not with a desire to criticise him personally, or to render any disservice; it is with a desire to help him. We are all so anxious about this situation that every assistance we can give we want to give. He must not regard criticism as being captious. One thing which was said by the Deputy Leader of the Opposition on the statement made by the Minister, seemed to me to savour rather of bureaucracy. There are too many officials between the actual carrying out of work and the order which maybe given. It is a state of things which I have found in other Ministries. You get the Minister, then the Permanent Secretary, then another civil servant, and then you get to the man who is really responsible for carrying out the business for the production of the goods. He is sometimes four or five removed from the Minister—too far away. If he were nearer he could take his troubles straight to the Minister.

Mr. Burgin

I am sure the hon. and learned Member will allow me to interrupt him for a moment. I may tell him that the Members of the Council are executive members with direct access to the Minister.

Mr. Davies

I think the House will be grateful for the statement I have drawn from the Minister in regard to his Department, but, unfortunately, it is not true of other Departments. What has to be realised is that by trial and error this old country must be in a position to produce enormous quantities in a very short time. The Minister himself realises from his statement that great as was the production in the peak year 1918, the production for which we shall be calling in this war will be infinitely greater. Great as was the effort made by this country during the last years of the late war a bigger effort is in front of us now. The uneasiness to which I have referred is to some extent caused by the fact that a great number of people are at the present moment going out of work. They are anxious to give their services, which are no longer wanted in their own business. Little concerns are closing down, and all these people are on their toes in their anxiety to give some help. How long are we going to wait for the machine to turn round and absorb them? I hope it will not be long, because that production will be wanted, I am afraid, in all too short a time. As I have said, one can talk on this matter only generally.

Another matter to which reference was made by the Minister was prices, and I should like, first of all, to say a few words with regard to profiteering. The whole House welcomed the statement made by the President of the Board of Trade this afternoon that we shall soon have, either by legislation or Order in Council, an adequate and proper method of dealing with profiteering. A profiteer is a person who abuses the position in which the country is placed by the cataclysm which has fallen upon it and takes advantage of the grim need of the people at the present time in order to enrich himself. A more despicable and contemptible person it is difficult to imagine. I realise the difficulty there will be in front of the Board of Trade in devising proper legislation to deal with this. It is difficult to give a precise definition of a profiteer but we all know him and we can all suffer from him. I hope that the penalties which will be inflicted upon him by the new legislation or order will be adequate and efficient.

But this profiteering is not confined to profiteering in the small everyday commodities that are bought in the shops. It is profiteering which will have its effect upon the work of the Minister of Supply. It goes on even in the case of long-term contracts. As soon as the war started, the suppliers of goods on long-term contracts were writing to their buyers and telling them that the terms of the contracts no longer applied. As the House is aware, many suppliers, many wholesalers, make long-term contracts for their goods, six or 12 months ahead. In very few of those contracts is there what we call a war Clause or a force majeure Clause, but a great number of the suppliers have written to their buyers suggesting that prices should be raised. Of course, the buyer has a complete answer in law to the seller, but what is a complete answer in law will not help very often in business, and the buyer, if he is to hope for supplies in future or for a new contract, has no option but to accept the new terms forced upon him by the seller. Then, what happens? It is really a form of blackmail. The bigger the concern, the greater its goodwill, the greater is the danger of refusing to accept the new terms thrust upon it. It dare not risk losing its goodwill, it dare not risk failure to supply its customers throughout the country; and therefore, the greater is the grip of the blackmailer upon the throat of that firm. What then? The price is raised. That again is raised to the next person to whom the goods are sold, and so the pyramid goes on.

On top of this comes the insurance. Everybody now knows about that. I cannot imagine any reputable firm doing what we know is being done up and down the country, that is, adding to the contract price the full amount of the insurance premium as if they were going to hold the stocks for the whole 12 months. Most of them will turn over the stock within a few weeks, and sometimes almost within a week. The more rapidly it is turned over the greater will be their profits, adding all the time to the new price of every stock the full amount of the premium which they paid on the first quantity they bought. That is an iniquitous state of affairs. A great number of companies do not even trouble to calculate the small amount which the insurance premium really costs upon each individual lot as they pass it through, because if they did bother to make the calculation and try to pass it on to the consumer, the amount they would pass on would be so small that there would be no justification for it. Therefore, they absorb the premium and sell at the same figure as before. That is a matter which I understand will be dealt with by the President of the Board of Trade

. Prices are rising at the present time. They are rising for that reason, and because of profiteering. They are rising also on imported goods, and I should like to say a few words on that matter. Undoubtedly, the man who has to replace his stocks will have to charge upon the stock which he is selling now the price which he will have to pay in order to replace the stock, for if the price has gone up he must get sufficient for the stock which he has in hand in order to go out and buy a similar quantity of stock with which to continue his trade. That is not profiteering. There will be instances of that kind, but that is no justification for putting on an increase which no economic position would justify for a moment. I know of some instances where they are trying to salve their consciences by saying that they are not raising the price in this country, but are raising it for export goods only. I know that is happening in the textile industry. The only difference between the cost to-day and the cost a month ago is the fall in sterling, which therefore has made the cotton, in terms of sterling, which they have to buy so much dearer.

Colonel Sir John Shute

Does not my hon. and learned Friend take into consideration the rise in the cost of freights and also the heavy insurance charges that have to be incurred?

Mr. Davies

I was going to refer to them. I referred first to the fall in sterling. The second consideration, on goods which have arrived in this country, is the insurance, but calculating the two together, the amount that is being put on is infinitely higher than those two additional costs—

Sir J. Shute

As I am in the business I definitely and absolutely disagree with the hon. and learned Member. If he makes the calculation, he will find that the increase in the price of cotton in Liverpool is definitely in line with the fall in the dollar a month ago, the extra insurance that has to be paid, and the heavy increase in shipping charges.

Mr. Davies

I do not know in what position the hon. and gallant Gentleman is in the business. I take it he is a seller. I am a buyer, and therefore, I have suffered because of these extra charges that have been made. I have made a most careful calculation of what would be a justifiable increase in the price asked to-day compared with the price asked before 3rd September. They salve their consciences by saying that they are charging that only on export goods, but, as has been pointed out, we want to increase our export trade as much as we can, and he who puts difficulties in the way of increasing the export trade is doing a real disservice to his country. Another excuse that is put forward is that, prior td the outbreak of the war, they were running in Lancashire on a very narrow margin because of the competition that was coming from Central Europe; therefore, they say that now comes the time when, because Central Europe is out of the market, they will raise their price. I call that profiteering. Moreover, much of this business is done on a barter basis. For example, cotton is sent out to West Africa where, in return, we buy food. If you raise the price of that above a true economically justifiable level, very rightly the African has to charge more for the food on that side, and again, it is the public in this country who pays.

I do not see why there should be a rise in prices in this country and I was surprised that the Minister of Supply seemed rather to take it for granted that there should be a rise. There will be an increase in freights, because of the sinking of ships and the fact that fewer ships will be available, but I cannot see why there should be any increase in the price of raw materials bought from abroad, in spite of the fact that the country supplying us will not have the same reason for not profiteering that we have in this country.

I want the House to realise what is happening and I can best illustrate it by an example, not of the kind of materials with which the Minister of Supply is dealing, but of food materials. It must be recognised that Germany— Central Europe— was an enormous buyer of world goods at world prices. She is now out of the market, and can no longer purchase those goods. We in this country are stronger than we ever were, thanks to the assistance which we are getting from the Dominions and Colonies and the fact that we can stand four-square to the enemy. This country was never as strong as it is to-day, and Germany is much weaker than she was in 1914-18. The Germans have not the materials and they have not the stamina that they had in 1914-18. What is more, they have not that stomach for the fight which they had in 1914-18. Therefore, our position being so strong, let us make it unassailable.

I give this illustration. Germany before the war used to buy very large quantities of soya bean oil from Manchukuo. At one time Manchukuo was the only place where the soya bean was grown. America has now become a large producer, but Manchukuo is still the main producer and exporter of this article. For many years, the main importer of these beans and of the oil was Central Europe. We imported a lot, but Germany was the chief importer. For some years, she has been importing that oil on a barter basis, because there was no free exchange available in Germany. She took the oil in return for machinery which she delivered to the Far East. She charged exorbitant prices for the machinery and, therefore, the soya beans, in return, were at such an exorbitant price that nobody else in the world could afford to pay it. It was pointed out to Japan that it was bad business and that she was getting inferior machinery at too high a price, but she decided to go on with this barter business.

What is the position to-day? Germany can no longer send her machinery to Japan and the soya bean oil cannot be sent to Germany. Japan and Manchukuo do not want it. What are they to do with it? It may be said that the neutrals will want it, but what is the position of the neutrals? In all the small countries round Germany, like Switzerland, Belgium, Holland, Denmark and Scandinavia, about one-tenth of the population is under arms and out of production. They are not in the position to buy that they would have been in, if the people were carrying on their ordinary avocations. But the fear of Hitler, the fear of being the next victim, compels them to dig trenches and to man guns lest they should be invaded. They are not in a position to buy. Who remains? There is America. But America is not a buyer of raw material to-day. America is doing her best to be a seller of manufactured articles.

Where is the only buyer of this raw material who can afford to pay cash and goods in return? There is only this country. Why, then, should the Minister of Supply anticipate a rise in prices? With proper management and control there should be no rise in prices in this country. With proper management and control there should be a fall, subject only to the question of freights. [Hon. Members: "And exchange."] And exchange. But that is all the more reason why we should bring a particular drive to bear upon the extension of our export trade and I would like to know what is being done with regard to that. What has been done with regard to the trade that Germany was doing with other countries? What is being done about the South Wales coal which used to go to South America? Germany was deliverings coal there for next to nothing in order to gain that market. Who is seeing to that to-day? Who is seeing to it that the miners of South Wales will be at work where they have not been at work for some time; that mines which have been closed will be reopened; that that trade will flow once again from Wales through the Bristol Channel and down to South America, and that we shall get food in return? Where is the organisation for that? If it is answered that there are exchange difficulties, let us make it a barter business. But there should be no rise in prices.

May I give an instance of the effect of control? The other day the Minister of Food put on a price of Is. 7d. for certain types of butter and Is. 5d. for other types. One of the Is. 5d. types was Dutch. It cannot be sold in this country except at a maximum price of Is. 5d. What happened? The price in Holland fell in order that it might be sold in this country at Is. 5d. Let the House consider what that means. On the border of Holland is Germany. She is in sad need of butter, but she has not the wherewithal to pay for it. She is already in the debt of Holland, and, as she cannot pay her debt, Holland is not going to sell to her on credit. Holland, therefore, prefers to sell at a lower price for the cash which she gets from this country. I say: Control your prices and plan ahead. You had this position before, in 1914, but you lost it because of people fearing a shortage and bidding one against the other, with the result that up would go the price. That was largely for psychological reasons. There may be economic reasons which would drive up prices, but do not allow a psychological reason to upset the whole position. Take your control and exercise it and I have not the slightest doubt about the issue. Production will go on and we need not fear the end of this war.

Mr. A. Edwards

I wish to put a point to the hon. and learned Member without any intention of giving offence. He rather suggested to the Minister of Supply, that the organisation of the Ministry was becoming bureaucratic. It must, of necessity, be so but the hon. and learned Member, I think, was of opinion that there was some difficulty in getting to the Minister. Does he suggest that the Minister should have business men there, and that if business men went in there, they would organise the Department differently? During the last war, I had a great deal to do with several Ministries into which some of the biggest business men in the country had been taken, and I believe the hon. and learned Member himself is connected with a big industry. I found that bureaucracy in Government Departments was pretty much the same as bureaucracy in some of the big industries. There is no use criticising the Minister and the Department unless we can make improvements. Does the hon. and learned Member suggest that the Minister can eliminate all bureaucracy and that big industrialists will be able to help him to simplify the organisation of his Department?

Mr. Davies

The hon. Member will recall that the Minister answered me by saying that under his organisation those people will be in immediate contact with him, and that they will be the people responsible for prices. If that is so, I think he has devised the best system. Unfortunately, as I understand it, that is not the system in other Ministries, but I am glad to get that assurance from the Minister of Supply.

6.10 p.m.

Major Milner

This Debate has already proved its usefulness, and I am sure it must have been of considerable help to the Minister, even though it has been to some extent a critical Debate. The hon. and learned Member for Montgomeryshire (Mr. C. Davies) was very encouraging in some of his remarks in regard to our present position as compared with our position in 1914 and 1918, and I think it ought to go forth to the right hon. Gentleman the Minister of Supply and the Government, that it is the desire of this House, and, I am sure, of the country generally, that so far as possible, having regard to the exigencies of the war situation, our normal industry and particularly our export trade should be kept going. There have been indications in the Press, and one knows from one's own knowledge, that there is some loss of time in obtaining labour and so on, and there are those who would perhaps disregard the normal industry of the country where it is essential that it should be carried on. It is for that reason, among- others, that we now have a Ministry of Supply, in order that our indus- try and our productive power should be so organised as to enable us to carry on both our normal industry and, in particular, our export trade and also provide all the necessaries of war.

Having said that, I am bound to say, as my right hon. Friend on the Front Bench said, that I am seriously disappointed with the statement of the Minister this afternoon. I am not one of those who do not recognise the complexity and the difficulty of the work upon which the right hon. Gentleman is engaged. I do not think any of us who have not been engaged in tremendous administrative tasks of that sort can have any conception of the difficulties which the right hon. Gentleman must of necessity encounter, but at the same time— and the right hon. Gentleman knows that I appreciate and always have appreciated his capacity and his courtesy and those of his Parliamentary Secretary— I must say that it really is not good enough to come here with a number of facile generalisations and a great many high sounding phrases, and not to carry, as I feel he has not carried, at any rate to my mind, the conviction which we hoped he would carry to-day.

I remember a Debate on this subject in which I took part some months ago, and I feel now just as I felt after having heard the Minister for the Co-ordination of Defence then. While it is true that there have been tremendous developments in many directions, and supplies are coming forward at an ever increasing rate, there has not been any serious change in the organisation of industry, and there has not been any substantially better utilisation of the tremendous facilities that we have available in this country. I remember that at that time I pointed out that the Minister for the Co-ordination of Defence showed himself to have very little power, that he was largely a channel of communication, that indeed he was a sprag in the wheel, that there seemed to be no real co-ordination. It is apparent to-day that orders are still being given by the Air Ministry, the Admiralty, or the Army, and I am not clear as to where the exact line of demarcation lies or whether there is such a line. The right hon. Gentleman speaks in one breath of orders that his Ministry give and in another breath of orders that the Services give direct, and we are not told where, if there be such a line, the line of demarcation is. The Minister smiles, and I shall be happy to be put right if I have erred.

Mr. Burgin

I do not want to anticipate the speech which the Parliamentary Secretary will deliver, but I thought I had pointed out that raw materials and machine tools affect all the Services and that priorities affect all the Services, but that otherwise my Ministry is for armament supply.

Major Milner

One must consider when one has read the right hon. Gentleman's speech the exact meaning of what he has now said.

Mr. Lees-Smith

The Minister said that priorities affect all the Services. Am I to understand that the Ministry of Supply would be the authority to determine priorities, say, as between the Army and the Air Force?

The Parliamentary Secretary to the Ministry of Supply (Colonel Llewellin)

There are four different items, if they may be called items, for which there are priority committees. Of those four committees, one deals with raw materials, one with production, one with labour, and one with transport. The two that deal with raw materials and production are both presided over by myself. Every interested Department in the State, civil as well as Service, is represented on that committee. It is there that the executive decisions on priority are taken, and they are registered in a Department which happens to be situated at the Ministry of Supply, the Central Priorities Department, which registers the decisions and provides the secretariat for those committees.

Mr. Lees-Smith

Suppose there is competition for a certain firm between the Air Ministry and the Army. The Minister says that a committee of which he is chairman would make the decision. Does that mean that eventually he would make the decision, or would it be made by a majority of the committee? Is he the only Minister on the committee, and are the other members of the committee merely civil servants? Is his the only authoritative voice, or what is the method by which that decision would be reached?

Colonel Llewellin

The position is that it may be a question of priority or it may be a question of allocation. If there is a new firm being brought in and two Service Departments have a claim on it, it may be that it will be allocated entirely to one Department or between one Department and the other. That has been happening on the Supply Board for a very long time, and the old Supply Committee organisation have now come into the central Priorities Department of the Ministry of Supply. How it has usually been done has been by agreement between the Departments concerned, between senior people, say, between the Controller of the Navy and the Director-General of Munitions Production. Usually they come to agreement. If they did not the whole committee would not be called in a case like that, but I should try to the best of my ability to get a compromise and to arbitrate between them. If it comes to a question of definite priority, it is true that I am the only Minister on the committee; the rest are of high Civil Service standing or members of the council, such as the Controller of the Admiralty or a member of the Air Council or the Director-General of Munitions Production. I should not take a vote on the committee, but I should come to a decision and I would hope that the members of the committee would have some confidence that I should be impartial between them. I should take that decision in what I considered to be the best interests of the Services.

Mr. Lees-Smith

Suppose one of the Departments do not accept the decision, I presume that it would go up to the Cabinet?

Colonel Llewellin

There is a Ministerial Committee of the Cabinet on which, apart from the Ministers likely to be concerned, there is the Minister for the Co-ordination of Defence and the Lord Privy Seal. It is a Ministerial Committee, and naturally I cannot dictate to the First Lord of the Admiralty, or the Secretary of State for Air, or the Secretary of State for War, or anybody else. If a Department disagrees with my decision, it can appeal to that Committee.

Major Milner

I am obliged for the explanation which the hon. and gallant Gentleman has given and the modesty with which he has spoken. We wish him well in what still appears to me to be a somewhat complicated and unenviable task. He has given a valuable piece of information. I was speaking about the question of demarcation, and I now understand that, generally speaking, the Minister of Supply controls raw materials and other matters, and has a special responsibility for supplies for the Army, while the Air Force and Admiralty are still at liberty, perhaps a limited liberty, to order for themselves, except so far as raw materials are concerned, and that the right hon. Gentleman has no function in regard to the Air Force and Admiralty. That does not seem to me to constitute what I thought was to be the complete, all-inclusive and all-powerful function of the Minister of Supply. There may be some better explanation of the position which we shall have later on.

In a Debate of this sort each one of us can have only a very partial view of the subject of supplies for the armed Forces. I have always taken an interest in this matter and I have formed my opinions from such information as I pick up in my constituency and Leeds generally. I am bound to say that I have not been satisfied that the facilities in that city— and I have no doubt that similar circumstances apply to other cities— are being taken full advantage of by the Minister of Supply. Some time ago the Minister received a deputation of Members of Parliament and representatives of the Chamber of Commerce. He received it very courteously and was helpful in every way. He encouraged the formation of a local committee whose responsibility was to be a channel of communication and whose representations would be acted upon by the Minister. I have not thought it right to communicate with the chairman of the committee because I do not wish to involve him in any difficulty with the Minister, but I have no doubt that, as I know has been done on previous occasions, particulars of facilities available and of firms who could do the work have been furnished again to the right hon. Gentleman. Firms have themselves repeatedly applied for work.

I have from time to time passed information to the Minister as to firms which desired work and were in a position to do it. All that sort of information, in my experience, seems to go in at one end of the Ministry, but very little or nothing seems to come out at the other end. That is one of the most serious complaints I have against the Ministry. It applies particularly to small firms. I recognise that to-day, for the first time so far as I know, the right hon. Gentleman has put forward a plan, on which I congratulate him, which will serve a useful purpose and enable the facilities of these firms to be made use of. I was glad to hear the right hon. Gentleman refer to the question of grouping, because I recognise that there are difficulties in dealing with small isolated firms. If the Ministry had long ago tackled this problem of grouping, as has been done by the Ministry of Transport, these facilties might to-day be rendering good results. Now the right hon. Gentleman has to bring that scheme into fruition and it may take a long time.

Another point to which reference was made by the hon. Member for South-West Bethnal Green (Sir P. Harris) is the difficulty and delay in obtaining replies to correspondence and inquiries from the Ministry. This may perhaps appear to be a small point, but it is a serious one and I am having continual complaints of that kind. For example, some time ago the Ministry desired tenders for an order. A sample was sent for by a certain firm. There was a fortnight in which to put in their tender. Notwithstanding several letters and telephone messages, the sample was not forthcoming until several days after the date by which the tender had to be put in. Obviously business cannot be carried on these lines and the Minister must see to it that correspondence and inquiries, particularly in matters of that sort, are dealt with promptly. My correspondent says: If this sort of thing is symptomatic of the whole organisation, heaven help us. I am not suggesting that it is symptomatic, but is a matter to which I would direct the right hon. Gentleman's serious attention.

Mr. Burgin

Will the hon. and gallant Gentleman give me particulars of that case afterwards, for I should like the opportunity of looking into it?

Major Milner

Yes, Sir. The country feels considerable anxiety as to the provision of shells and material. I had some experience in the last war and I do not want the things that I heard said in France, and the events that happened, and the terrible losses that we suffered in those days by reason of the lack of shells, to happen again. I should have liked to ask how many divisions we could put into the field fully equipped, but I imagine that the right hon. Gentleman would not reply. Perhaps the right hon. Gentleman might give me information privately. I am frankly afraid of the answer that I should be likely to get. I notice, incidentally, that the right hon. Gentleman remarked upon the comment in the newspapers as to the equipment of those forces that have already passed over to France. He did not also call attention to the French comment, which was that they were agreeably surprised at the equipment of the British forces because they had anticipated that, owing to our lack of equipment, they might themselves have had to equip our forces. That appeared in the newspapers, so that it is public property. It is rather a significant commentary, giving, as it does, the opinion at any rate of some portion of the French Press as to doubts about the way in which our forces might be equipped.

What I am afraid of is that, whilst the right hon. Gentleman has told us a rather complicated story, he has not yet got a complete and adequate system operating in his Department. I know a little about supplies of one sort and another. In the early days of the last Great War I purchased and equipped a Territorial division with a large part of their horses, transport, saddlery and so forth within six days—between 4th and 10th August, 1914, and for many months I was responsible for supplies for between 30,000 and 60,000 troops, and I know something of the difficulties of the business. The first essential, which the right hon. Gentleman has not mentioned, and which I am not at all sure he can tell us he has acquired, is a programme. Has he a precise programme of what is required? Does he know precisely, to the last screw and the last bolt, what he requires for the armed forces during the next three, six, nine or twelve months?

Mr. Burgin

May I point this out to the House in order to avoid misconception? I am the manufacturer who manufactures the orders that the customer places. It is the customer who makes up his mind what is wanted and places his order. My business is to organise the production and to make good the supplies for orders that are placed.

Major Milner

Yes, but how can the right hon. Gentleman organise production unless he knows for some time ahead precisely what is required in every detail? Since he puts it that way, has he received from every Service Department a precise requisition, or programme, or order, of what they require for the next three, six, nine or12 months? That is a precise question to which I ask the Parliamentary Secretary to give me a precise answer. If that is so, I presume, from what he says, that he is relating, at every stage of the procedure, the facilities available for production to there quisitions or the demands that he is receiving from the Service Departments. I understand that the right hon. Gentleman dissents. So he is not in any way relating production to what is required?

Mr. Burgin

I think I must either have spoken too quickly or perhaps tried to communicate too much information to the House in one statement. I was at pains to say that, whilst the function of the Ministry of Supply was to fulfil orders, it was quite clear that, once war broke out, the whole lessons of experience showed that, as there was a time lag between putting in hand the potential and getting production, the Ministry could not wait for orders but had to survey the potential on the widest possible basis. When the hon. and gallant Gentleman comes to read the statement carefully, he will find that I said that, whilst we have to take notice of the actual things we are ordered to do at once, we have not stopped but we have planned on the widest possible basis for the greatest possible output for the entire duration of the war.

Major Milner

I am obliged to the right hon. Gentleman. We have elucidated that. He is really not only working to a programme but is anticipating that programme. Am I right in that? I will not labour the question but it seems clear that he is working precisely to a programme furnished by the Service Departments, or is anticipating that programme and ordering more in quantity than is at the moment required. Perhaps the Parliamentary Secretary will elucidate that.

One other point. The Ministry, and every Service Department so far as I can see, are wherever possible dealing with the main contractors and instructing them to give out sub-contracts where necessary. That can be carried too far. The Ministry ought to have some control and some hold and some right of decision as to sub-contractors, because the considerations which cause a main contractor to give a sub-contract to a sub-contractor are not necessarily the same considerations that would apply in the national interest were the Minister himself giving out the contract. It seems to me to savour of the Minister shifting his responsibility on to the contractor rather than carrying it out himself. The Minister has satisfactorily dealt with the question of the small firm but it will, of course, necessitate very knowledgeable, technical and capable handling of the scheme that he has put forward, with the Rear-Admirals and others at the head of it, if it is going to be successful. I have said what I have to say because I am sure this vital matter of supplies should have the closest possible attention. This war in my view will be largely one of mechanics, or of machinery, rather than of men. It is because I feel the great necessity for the most complete organisation of supplies, in the matter of engineering in particular, that I have thought it right to make the remarks that I have made.

6.40 p.m.

Mr. Higgs

I have listened intently to the Minister's speech and to the criticisms of it, and all I can say to the critics is that they have expected the Minister to do an enormous amount in the period of a fortnight. He has outlined his policy in an admirable speech, and now it has to be carried out. The Minister himself cannot carry it out. He has to get the co-operation of the manufacturers and of; he has the co-operation of the country. He has the advantage of experience in the last war. The enemy has a similar advantage, but the Minister has the advantage of the 100 per cent. support of this country, whereas I believe the enemy has not such an advantage. In my opinion the Minister appears to be exercising control with a minimum amount of interference with industry. He is not following the example of the Minister of Agriculture in regard to fish or of another Minister in regard to the control of hotels. As far as I can see his attitude is to allow those manufacturing specialised machines which he knows will be wanted in unlimited quantities —drilling machines, lathes, pumps, and so forth —to continue to manufacture those machines in which they are specialists. It is on that principle that he is going to get the maximum result from his organisation.

I understand that he does not intend to control establishments in the way they were controlled during the last War. There seems to be some opinion abroad that firms have to receive certificates before they can proceed with the particular contracts. I understand that, generally speaking, no priority certificates have so far been issued. I think it would be advisable if the Minister would confirm that ordinary manufacturers who are on work of importance can continue manufacturing without interference at the present moment. When priority has been settled will be the time to demand the priority certificates. I can assure the Minister that there is a misunderstanding in industry on this matter at the moment.

Regarding the competition for deliveries, a matter which has already been referred to, I would tell the Minister that things are not quite so clear in that respect. Firms have contracts from the Ministry of Supply, from the Admiralty and from the Air Ministry. In the eyes of the Minister they may be contracts of relatively small value, but it is causing inconvenience to firms to have three Departments worrying them. Would it not be possible for arrangements to be made under which the Departments can be co-ordinated under the Minister of Supply and get priority from him only? No man can serve two masters, let alone three. I would also bring to the Minister's attention the question of suspended contracts and the position of sub-contractors, referring particularly to the motor industry. That is one industry which is being reorganized more extensively, probably, than any other industry in the country. In that industry they produce generally a specified number, and thereafter meet the season's requirements. Unfortunately, we are just in the middle of the season's requirements and deliveries have been suspended. No further information is being given. I should like to ask who is liable? Further, who is to undertake the storage of the finished parts? The storage problem is one of considerable magnitude. Works are littered with component parts and they will have to be moved for the manufacture of other components, and the question of storage is one of considerable concern to the firms. We shall have to get those works turned over to war purposes, but I think some latitude should be given to firms to finish off a certain number of the cars which no doubt will be wanted before the conclusion of the war.

The right hon. Member for Wakefield (Mr. Greenwood) criticised the action of the Minister in appointing ex-Admirals. As far as I can see he is not appointing ex-Admirals to go into works and to tell firms what they are to make and how they are to make it. He is appointing those ex-Admirals to be more or less in the position of chairmen of the area committees, and I do not think a better type of man could be found for that particular job. If it were a question of putting Army men into the factories to inspect them and tell them what they were to do and how they were to do it, such a procedure would be absolutely wrong, but in an administrative capacity those appointed are undoubtedly the right men. I have some information of what the Minister is doing in Birmingham. I believe he is co-operating with the Engineering Employers' Federation and with other organisations. Who know better what to do than the men who are at present running the industry? The Minister is getting those men to do it through other men, and I do not see why the right hon. Member for Wakefield should have been so critical on that point. There is an immense potential war production untapped in Birmingham and other manufacturing centres. In a recent speech the Minister rightly said that he was hurrying forward the construction of factories and plant, but I think that before rushing at that work it would be desirable that he should get subcontractors at work on the components to which he has referred.

With regard to the export trade in this country, we have no preponderance of man-power and therefore we must have a preponderance of materials. Foreign exchange is of paramount importance to our success in this war. Obviously our foreign assets are limited. They will have to be supplemented by exports.

The Minister recently issued a pamphlet, the Control of Iron and Steel Order, No. 1938. In that pamphlet he does not give any priority at all to export materials, but we shall really have to have it. Our exports can now be increased at the expense of Germany in particular countries, especially South America, South Africa and North Africa. When he is issuing these priorities I hope that he will include that very important section of our industry, the export trade. The hon. Member for South-West Bethnal Green (Sir P. Harris) suggested switching over industry in vulnerable areas to the export trade. That is just the very thing we must not do. That is switching industries over on paper; it is not switching them over in reality. We have to get the job done and we are willing to get the job done, but that sort of thing would be detrimental to our future and to our success in this war.

I should like to inform the Minister that the insurance premium is being added to existing pre-war contracts in many cases. I do not know whether he is aware of the fact, but I think it is a procedure which should not be encouraged, and that the Minister should express his opinion about it. Regarding the rise in prices, the Minister said we have to face a rise in prices but were going to limit it to the minimum. Some hon. Members seem to think there has been no rise in the costs of manufacture. Let me mention one or two items. There is the A.R.P. expenditure. It may be said that that is a small proportion of a firm's expenses, but I would refer anyone who criticises it to the cost of the blackout. The lighting of premises artificially is costing as much as the insurance premium which has to be paid on stock. Works have to be lighted artificially all day. That is one minor point. Then there is the competition for skilled labour, due to the shortage of it. If the official rate has not gone up, believe me the actual rate has increased owing to the competition for these men.

The overseas exchanges have already increased the prices of raw commodities. Staff changes cannot be dealt with. We are all losing men every day and having to replace them at a higher rate or to accept an inferior quality of man. All these matters add to the cost of production. The Bank rate has increased and those firms who have overdrafts have to pay more money for their accommodation. In the aggregate all these things add to the expense. We have to accept this rise in prices, which we have to keep to a minimum. I would again congratulate the Minister on his admirable speech and assure him that he has not only the co-operation of this House and of the manufacturers and workers, but the whole nation behind him.

6.51 p.m.

Mr. Stokes

Listening to the speech of the Minister to-day, two things crossed my mind. The first was that there would be a chuckle of delight in the Nazi camp to-night when the speech was telegraphed over there. Secondly, it seemed to me that the Minister did not really tell us anything, because his speech seemed a simple lecture on the organisation of a Ministry of Supply without informing us very much about what was actually being done. I am criticising without casting any reflections on the personal qualities of the Minister, but it seems to me, as a practical engineer, that the Ministry of Supply is a practical engineer's job and that we ought to have that kind of Minister put in charge.

I would join with the Deputy-Leader of the Opposition in protesting against this ridiculous super-bureaucracy which is being placed over us. In all our local areas we have employers' federations and trade union organisations and they could all be got together to-morrow. Probably they could even find their own staff from their own members, and they would be far more capable of making the best use of the local manufactures than any body of rear-admirals or other bureaucrats which can be pushed over us. The Minister gave me a nasty moment—perhaps I misunderstood what he said, and, if so, I hope that the Parliamentary Secretary will clear it up when he speaks—when he made mention of the fact that certain explosives and guns might be slow in coming forth because they took 12 months to manufacture. I may have misunderstood his words, but I hope that he meant that all that was considered necessary for our supplies was ordered a year ago and that he was only talking about what other increases might become necessary; but the way he put it over made me feel that somebody may have forgotten a year ago what are some of the essentials when you are fighting a war.

I have one or two practical proposals to make. I looked forward to hearing from the Minister some kind of reference to an organisation or board of invention and research, to which reference has been made before in this House. On a previous occasion it was promised that something would be done in that direction. Like other people in the engineering industry, I suppose I am almost overwhelmed with new inventions, some of them perfectly fantastic and some of them possible, but there is no organisation, so far as I know, free and able at the present time, with time on their hands, to take up these inventions and see if any practical use can be made of them; If the organisation exist —

Mr. Burgin

Will the hon. Member allow me to tell him the answer at once to that point? There is the director of Scientific Research with a staff of something like 100 of the most eminent scientists, working under the Ministry all the time.

Mr. Stokes

I am glad to know that, and I will despatch to this authority those inventions which I have. The next point is whether there should not be some simplification of tendering. This may not apply so much to the Ministry of War but it certainly applies to the other Departments. There is an infernal amount of delay and of unnecessary work, due to the fact that a large number of firms are asked to investigate and tender for the same new products. Everybody has a limited number of technical experts. A case came to my notice only two days ago in which an inquiry was put out for goods which could not possibly be worth more than £12,000. It was sent to tour or five firms and it would take two competent technical men of each firm at least a fortnight to investigate it. The time has gone when we should waste our efforts in that way. The right thing to do is to invite a particular firm to tender for that work, make them quote a firm price for the goods and, when they have delivered them, make them give a certificate of the profit they have earned and render back to the Treasury any profit made over an agreed amount.

Mr. Benjamin Smith

The hon. Member would eliminate all competition among small firms?

Mr. Stokes

Yes, on such orders most certainly. I would eliminate all competition—if you followed a proper rule of having profits properly certified. I suggest that the ridiculous methods which the Government have so far taken to control profits are no use at all, because it is easy for any manufacturer to pass the baby on.

That brings me to the nauseating business of profiteering about which something has been said to-day. Labour is now bound hand and foot, but the manufacturer is still free to go off with the swag, and it is time that proper steps were taken to deal with that matter. I would call the attention of the Minister to a matter to which I referred before in this House, and that is in relation to the mountings of the Bofors gun. It was a case where the sub-contractor was asked to quote and was told by the main contractor that the price was too low and that he must put it up by 50 per cent. when he would have an order. I got rather howled at from the other side of the House for not mentioning the names of the people concerned, but I refused to do so. I am glad to say that the manufacturer very patriotically came forward and furnished the Minister with the necessary information, but I have yet to learn that anything was done to deal with that case. I hope that the Minister will tell us something about it. Another matter is that of the Militia camps. I suppose they are going on being built, but, so far as I know, from investigations I have made, nothing has been done—

Colonel Llewellin

I can clear up some misapprehension on that point. We do not do any of the hutting or housing for any of the three Services. Militia camps do not come under the Ministry of Supply but under the War Office.

Mr. Stokes

At any rate, it is a good opportunity for pointing out that the Militia camps cost £166 per militiaman while the L.C.C. White City permanent buildings cost only £159 per head. There is something serious to be done in looking into that matter at once.

Mr. Higgs

Am I right in understanding the hon. Member to say that these camps cost £166 per head?

Mr. Stokes

Perfectly correct. If the hon. Member cares to have the figures I will let him have them afterwards. I have a bagful of them outside. If the hon. Member cares to look at them I will let him have the particulars. I have done my best to render information to the Department concerned, but although I have written again and again I have had no satisfactory answer from the Minister of War. I am not clear whether the Minister now deals with Air Ministry contracts.

Colonel Llewellin

The hon. Member addressed the question to me. We do nothing with regard to the placing of Air Ministry contracts for airframes or engines. We are concerned with guns, rifles and munitions but not with aeroplanes.

Mr. Stokes

You have nothing to do with aerodromes and so forth?

Colonel Llewellin

No, Sir.

Mr. Stokes

That cuts my speech even shorter. I submit that the moment has now arrived when it is in the public interest that the Minister should disclose prices. One of our difficulties on this side of the House has been that when we bring up cases of what we believe to be profiteering and demand from the Minister what the contract price was, it is always said not to be in the public interest that we should be told. That is appalling humbug anyway, and I suggest that the time has now arrived when we ought to be told when we want to know what contract prices are.

With regard to exports, I must pay a tribute—perhaps the only one I can— to the Minister. He has given me his personal assurance that on no account will the export trade be interfered with, and I am bound to say that, whatever has been the experience of others, my export trade has not been interrupted in any way by the Ministry of Supply, nor have we had any difficulty in getting the supplies we need. Is this not the moment, at a time when we need the maximum goods at the minimum cost, and when we need to stimulate export trade to the utmost, to abolish tariffs and other restrictions on trade?

I come to the question of war risks insurance. That is having a most appalling effect. I have brought down a selection of the letters which have come to me— about one-fifth of the total number I have received —and they show that the extra charge imposed varies from about 200 per cent. to about 800 per cent. above what it ought to be. That is going to upset the Ministry of Supply. I would submit to the Minister that perhaps it would be a good thing to urge the Government to drop the scheme altogether. It has only been made an excuse for price-raising all round. The public do not understand what is happening. I had a bill for 8s. 4d. put into my hand yesterday, on which the retailer had added 10 per cent., which was equivalent to an excess rate of about 1,100 per cent. more for that particular article than was really necessary. It would be far cheaper for the Government themselves to carry the risk, which has to be carried in the end by the working people. In conclusion, the Minister visualised an ever-increasing demand for all these goods, which are utterly useless except for taking human life. He did not seem to think that there would be any difficulty in providing the wherewithal for obtaining them. I hope that when the strife is over, he, and the Government, whoever they may be, will remember that, and that it will be possible to provide for all the human needs of our people with the same facility.

7.3 p.m.

Mr. Amery

I would like to draw attention to a matter of considerable importance, affecting the work of the right hon. Gentleman's Department, although the actual decision rests with the Cabinet. That is the danger of raising the cost of supplies to ourselves by competitive buying in the United States and at other sources of supply. In the last War prices of goods supplied to ourselves and our Allies were raised disastrously as a result of competitive buying between different Government Departments and different Allied Governments. I understand that at the last meeting between the Prime Minister and M. Daladier it was decided that the two nations should act as one in the field of strategy. It is no less important that we should act as one in the field of supply. The question of supply, particularly in the United States, whether it extends to munitions or only to raw materials, should not be in the hands of a number of minor representatives of different services, or even of different Governments, but the whole business of supply for all the services of this country, and, if you can arrange it, for the services of the Dominions and France, should be centralised in a single organisation, at the head of which there should be as authoritative and capable a business man as the Government can find. I am sure that that would make a great deal of difference in the cost of the war.

I would just say a word on another aspect of supply, where, again, the administration may be in my right hon. Friend's hands, but the question of policy affects the Ministry of Economic Warfare, the Foreign Office and other Government Departments. That is the question of securing supplies from countries which would otherwise supply Germany. This is a question not only of what we need but of what Germany needs and we can deprive her of. It is going to be an essential element in the strategy of this war that we should be able to buy things away from Germany at better prices than she can pay, and, in return for better export goods, get things which might otherwise go to Germany. That might mean in some cases paying for supplies at prices which otherwise we should not pay, but in these days considerations of pure business must give way to considerations of strategy. I was told the other day of some important article of which we might have secured a considerable supply from a certain neutral neighbour of Germany, and the Treasury vetoed it on the ground that the article was already available in sufficient quantity in this country. That was a wrong attitude to adopt. It might well pay us to buy supplies, even if we have to store them right through the war, or even if we have to throw them into the sea.

The question of supplies, especially from countries which Germany can get at, is, of course, linked inevitably with the question of exports to those countries, and it may become of immense importance, not only as my hon. Friend the Member for West Birmingham (Mr. Higgs) suggested, that everything should be done to keep our general export trade as efficient as possible, but that we should take special measures to help, even to subsidise, our export trade in special markets where it is essential to us to undersell Germany. This is a question on which policy should not be governed by normal ideas of trade. I am in agreement with those who have spoken of the necessity for giving freedom to business men, but policy has to be decided on higher considerations than business interest. We have to decide which exports and which countries have to be favoured, apart from the general question of keeping our export trade alive. I fully realise that this is a matter on which my right hon. Friend can contribute, but on which the decision, as it affects a number of Departments, rests with the Cabinet. I am a little sorry that a War Cabinet containing so many administrative Members should not have a few more members free for co-ordinating policy where, as in this instance, the activities of different Departments are concerned.

There is one other thing that I would like to say on the subject of prices, which is vital, not only to the whole conduct of the war, but to the maintenance of the unity of the nation itself. Unless the nation as a whole feels that this business is being conducted on fair lines, and that nobody is taking an unfair advantage of the national emergency, we shall weaken the unity, which is our greatest strength to-day, and perhaps the greatest contrast between us and our opponents. We had a very helpful and satisfactory statement from my right hon. Friend the President of the Board of Trade this afternoon. I am sure he will do everything he can to prevent minor and unnecessary causes of increased prices being used as a stalking-horse by one interest after another to pile on additional costs.

The only positive suggestion that I would like to make, through my right hon. Friend, to the President of the Board of Trade is that it might be helpful to him to set up in his Ministry an advisory committee of business men to which these matters could be referred and to which the distributors might come if they thought that they had been unfairly made the victims of unnecessary increases of price by manufacturers, and so on. Equally, it is important that the conclusions of the Board of Trade in this matter should reach the public effectively through the Ministry of Information. It is very essential that where, for instance, prices are inevitably raised by the effect of the exchange or other causes, the public should understand that, and not attribute it to profiteering. It is also important that the public should know, over a considerable range of articles which may not be actually controlled, what is a reasonable price so that they may have some protection individually against the retailer.

This whole question of prices is going to be vital, and it can only be tackled, if it is tackled, right along the whole line from primary producer to manufacturer, and right through to the small retailer; and so too along the whole chain of production, through wages, salaries and profits. Unless every link of the chain is controlled there will not be a sense of fairness nor any real restriction upon that vicious circle of rising prices, rising wages, and rising profits, in which the profiteer always finds his opportunity. If this is to be a long war, we shall only get through it, on the one hand, by high taxation, and, on the other hand, by keeping down prices as long and as firmly as we can. I earnestly commend the whole of that aspect of the question not only to the right hon. Gentleman, who car; tackle only one aspect of it, but to the Government as a whole.

7.14 p.m.

Colonel Wedgwood

We have had a Debate to-day on a matter of vital interest to this country not only as far as success in the war is concerned, but for our economic life. We have had a series of admirable and informative speeches. I wish that every one of those speeches had been listened to by the Cabinet. We have been debating now for nearly four hours on this really vital question, and we have not had a Member of the Cabinet present. Where is the Prime Minister, who is supposed to be leading this country; where is the First Lord of the Admiralty, who, after all, is vitally interested in this matter and has had experience of the munitions office in the last war; and where are these people who have decorative posts and no jobs — they are called posts without portfolios? Why a re the country and this House being treated in this way by the War Cabinet on a vital issue? Here we are fighting for democracy, and the House has been treated to-day with contempt. The speeches have been useful, and even that Cabinet might have learned something from them. The fact we have learned is that we shall never get on with this war until we change this Cabinet and put in charge of the affairs of this country people who want to get something well done. The Minister himself read out, at enormous speed so that nobody could follow him, the statement he had prepared for the Press and which might per- fectly well have been circulated to this House as a White Paper, so that he might then have spoken on the question in the Debate.

Here we have the two vital issues being discussed to-day—how we can maintain our Army at the front, and how we can maintain our manufactures in the rear. These two things are dependent absolutely upon the Ministry of Supply.

If I may touch on profiteering, let me say that I believe there is no way of preventing profiteering, particularly in a time of rising prices, no possible way, and most of the suggestions for stopping profiteering would only result in an increased army of buraeaucrats making the life of the manufacturers intolerable and adding enormously to the expenses of running the country. There is one way, and one way only, of stopping profiteering, and that is by Government factories. We are still without the Government factories which we ought to have for the making of munitions, and which we had at the end of the last war. That way of stopping profiteering is the best. It gives you a standard, and prevents excessive prices being asked and the contracts being changed for continually further rising cost of the raw materials. I do not think that it is possible, by any machinery which the right hon. Gentleman the Member for Sparkbrook (Mr. Amery) suggests, to prevent profiteering. After all, we call it profiteering, but it is making the best of your own position, and in a world of rising price sit is almost inevitable that it should be so. The best way of preventing profiteering is by publicity, by publicly denouncing the man who has profiteered. I do not believe it possible to make a case that you can prove in the law courts. That involves so much trouble that nobody will be prosecuted. The only way is to point out the man who, in time of war, is being a bad citizen. It would be a far bigger punishment than any you could get in a court of law.

Apart from the fact that the speech of the right hon. Gentleman did not give us much hope of a really energetic start with the provision of Government factories, nearly every speech in this Debate has referred to the vital importance of our export trade. I would only add that when we are making contracts, whether in competition or without, when we are trying to carry through the war, the vital thing is to keep the £ from falling to prevent inflation. You cannot carry on in your manufacturing industries if there is inflation and the £ is falling down. The only way to prevent the falling is to keep up your exports, so that you have the means of paying for your imports without pledging your credit and reducing the value of the £. I wish the right hon. Gentleman would realise that every pound's worth of goods we send abroad means the power to buy from abroad the food and the munitions which we can get more cheaply from those countries than we can produce them ourselves. Otherwise we should not import them. The manufacturers for export in this country are just as much working for the safety of the country by exporting goods as if they were manufacturing shells for service of the armed forces.

The right hon. Gentleman's Department is dealing with priority. In questions and answers we have heard how the priority scheme is to be worked, but those questions and answers seem to deal principally with the Air Force, the Army and the Navy. It is equally important to have someone on the committee representing the point of view of the export producers. Exports are even more vital, because they are the normal form of manufacture which we are carrying on at the present time. We can buy munitions, guns and aeroplanes abroad with the goods which we normally export. That is a much more economical way of obtaining your armaments. At the same time, the export trade keeps the £ stable. In the last war it did not matter. We pegged the exchange at the beginning and nobody discovered till the end of the war what inflation meant. This time, however, people know. They are watching carefully and are anxious to know what the Budget is going to be, what sterling is going to be, and they are saying to themselves: "Can I get rid of sterling? What will sterling be tomorrow? "The nervousness about the position of sterling is a feature that did not exist in the last war, and if we are to prevent it we must keep up our export trade so as to keep the £ solid.

One thing which the right hon. Gentleman can do is to see that the export trade gets priority. Another thing that he can do in the interests of the export trade is to see that it is not penalised unnecessarily by new taxes, which might just as well be taxes levied on the munitions industries themselves. You put on to the manufacturers for the export trade the new heavy insurance tax. In spite of what some hon. Members have said, it is a very heavy tax, twice as heavy in most cases as was the Excess Profits Duty. It is not insurance but a tax, because it does not depend upon the risks incurred by any particular factory or shop. It is a tax levied on the export trade and on the costs to the consumer. In this new taxation the Government have not observed that it gets at the heart of the export trade and makes it more difficult to keep up the £. The right hon. Gentleman might well point out to the Chancellor of the Exchequer that fixing artificially the £ sterling at 4.03 dollars when the actual rate is 3.70 dollars means an extra 7½ per cent. on all the exports from this country into America. It means a tax on the exports which we manufacture here, send to America, and a bonus on imports from America to the same amount of 7½ per cent. You are giving a bonus on imports and are putting a penalising tax on exports, simply by fixing artificially high the exchange between sterling and the dollar, that means a penalising tax upon exports at a time when we need exports above all.

A further thing which I think the right hon. Gentleman must have observed is that as long as we have this colossal waste of money on air-raid precautions we shall increase the burden on our manufacturers. It is not so much Government money as local authorities' money. It is an additional burden, an overwhelming burden on the rates, which falls upon industry and prevents our exports from keeping up to their proper level. If German trade is to drop into our lap, then we must find our place again as the manufacturers and suppliers of the world; but that chance is being destroyed by the waste of money on air-raid precautions, the expense put on manufacturers to provide shelters and the shutting down of factories when there is an air-raid warning. A stand still of one hour in the day time in this country costs about £8,000,000 if everybody ceases work for that hour because of that air-raid warning. All these things are a burden on manufacturers for the foreign market and sales overseas, and also the manufacturers of munitions.

If we are to normalise and secure economy in the manufacture of our war stores and if we are to secure economies in the manufacture of goods from over seas, we must have expenditure of that sort curtailed, and the taxes must be levied in a way that will not penalise our trade, that is if we are to keep up sterling to its normal level. Instead of an increase in Income Tax, I would put a tax upon land values. I do not know whether it is possible for the right hon. Gentleman to convey to the War Cabinet the unanimous feeling that has been displayed in the House to-day as to the vital importance of keeping up our ex port trade. I hope that feeling will be translated into the giving of instructions to the Priority Committee to consider the provision of machinery and supplies for the production of goods for overseas as important as the supply of the things necessary for munitions.

The welfare and prosperity of the country and its safety in war depend upon our keeping up the £ and the prevention of extravagance. Then we can leave it to the Navy to secure us from the submarine danger to our overseas trade. Let us keep the home front solid, with the £ looking the dollar in the face, which it can do only if our exports go up and if we stop wasteful expenditure, caused by panic about air raids, which probably we shall never see in London. We are spending at the rate of £1,000,000 a week on air raid wardens and people who are standing by and doing nothing. The country cannot possibly carry that burden and its trade at the same time. I ask the right hon. Gentleman to use his influence with the Chancellor of the Exchequer and with the Home Secretary to stop these two dangers—the penalisation of the export trade and the strangling of our war effort by extravagance in our defensive preparations, which are not made for winning the war but for cooling the excited and terrified nerves of a lot of old women.

7.31 p.m.

Sir Henry Morris-Jones

I should not intervene in this Debate, in which so many experts have spoken on matters about which they know so much, were it not for the fact that I promised my constituents that I would bring before the House one particular aspect of the situation which affects my area. I listened to the speech of the Minister with very great interest. I take the view which has been expressed in regard to speeches which are read, but, after all, the speech of the Minister of Supply was one of very great moment covering large and important matters of supply, and I think that in the circumstances the right hon. Gentleman can be excused for having something like a prepared speech. We know that he is quite capable of delivering a speech without the preparation which he showed he had made to day. I hope also that the right hon. Gentleman will convey to the Members of the War Cabinet the views which have been expressed in the Debate. We cannot expect the Members of the War Cabinet to be constantly sitting on the Front Bench. Their attention must be concentrated on the conduct of the war. We have to be reasonable, and I think that in the present circumstances a little indulgence can be allowed to Ministers.

The matter which I want to raise affects the future position of the motor industry. I am not going to deal with the question of motor manufacture. Some of the manufacturing centres have been turned over to important war work. But there is no question that the motor in dustry, owing to the rationing of petrol which will come into force in the next two days, will come to a standstill in this country. The question of motor manufacture, of motor supply and equipment, and the supply of petrol, will come to an almost complete standstill, and it will affect the lives of millions of people and hundreds of millions of money. The point I want to raise is this. What is going to happen to the large garages throughout the country and repair shops in safe areas like parts of North Wales and the Western coast, which have at the present time in the aggregate a large number of skilled labour, mechanically trained who are threatened in a few days to be turned on to the scrapheap of unemployment? I hope that the right hon. Gentleman and his Department have already taken steps so as to be able to make use of these garages in various parts of the country for war work at once. Many of them have written to me saying that they have sufficient knowledge of the repair of aero engines and equipment in connection with aerodromes and the repair of all forms of motor transport in the Army, the Air Force and other Government Departments. I want to appeal to my hon. and gallant Friend the Parliamentary Secretary to make use of this knowledge and capacity, because if not it will mean serious unemployment and a reduction of the productive Capacity of the State.

7.37 P.m.

Mr. E. Smith

As I have listened to the Debate I have thought of the position of the men we represent in this Chamber. We are in a war. We are proud to belong to this country, and we want the people of this country to have a Government worthy of them and this great country. This country has led the world in the development of constitutional government. We have had men like Gladstone and Disraeli. Our own movement has produced great people who have been the admiration of the whole world, and, therefore, we want this campaign, this war, to be conducted in a way worthy of this great country. Therefore we cannot speak of this problem in the complacent way which hon. Members of the House have been speaking to-day. As I have listened to the Debate I have been wondering who is going to manufacture these munitions. Who was responsible for the great munition output in the last war? It was the men we represent, and yet hardly a word has been said in the Debate to-day about the class to which we are proud to belong, and who will have to pull the country through. As I have sat here one question has arisen in my mind. I do not know much about legal affairs but I do know something about the problems which legal men have been considering this afternoon. It is clear to me that some hon. Members who have spoken understand this problem as little as I understand legal problems.

The hon. and learned Member for Montgomery (Mr. C. Davies) said in a somewhat supercilious way, that we could only talk generally. I want to remind the hon. and learned Member that the situation is too serious, the problems we are considering too urgent, to allow us to talk in the general way he did this afternoon. In the remarks which I shall address to the House, I want to examine the problem in a critical, objective manner in order that I may place on record my experiences and views for the consideration of the Minister and the Department generally. The hon. and learned Member for Montgomery spoke critically of the Ministry, but he did not make any constructive proposals; he talked merely in a general critical way. In ordinary times that may be all right, but the serious situation which confronts us now calls for experienced people who are not only used to talking and to theory, but are capable of translating theoretical ideas into practical realities. We know only too well that we require a machine, and this afternoon the Minister outlined how the machine is to be constructed; but, that being done, the question that arises is whether the machine will function? Is it in competent hands? That is the problem to which I want to address myself.

I want to make clear that the criticism of hon. Members on this side is bound to grow, because we are seriously disturbed by the complacent manner in which the Government have handled the situation up to the present. We are not speaking to-day in any factious spirit; we are speaking because we are concerned for our people. When my right hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood) — who is a friend not only in the sense generally understood in this House, but a real friend—spoke in a critical way about the expenditure on air-raid pre cautions, I could not help feeling that that expenditure cannot be too great, that the lives of our people are worth saving, and that, consequently, there must be a maximum amount of expenditure on air-raid precautions in order that our people shall not have to face what the Polish and Spanish people have faced already.

There are one or two considerations which I want to bring to the attention of the Minister. First of all, hon. Members on this side, and especially the working-class section of our party, want to profit by their past experience. We want to avoid an episode of the kind which we passed through and for which we paid so dearly in 1914. We want the most efficient organisation. Yesterday, the Prime Minister and my right hon. Friend the Member for Wakefield (Mr. Greenwood) paid a great tribute to Polish bravery. But bravery is not enough, for unless it is backed up with superior power it does not lead to the results which the bravery of the people deserves. It is because we are so proud of our people, it is because we realise that if there is to be any future for humanity our people have to win this struggle, that we are concerned about the present situation and want the most efficient organisation so that we may secure the maximum results in the minimum time. The other night I was reading the War Memoirs of the right hon. Gentle man the Member for Carnarvon Boroughs (Mr. Lloyd George). When I came to those pages—pages which I wish every right hon. and hon. Member would re read—in which the right hon. Gentleman deals with the fiasco of the organisation of national service in the last war, I began to think of a good deal of the criticism that has been made during the past few years. I hope that we are not going to have a repetition of that fiasco. The right hon. Member for Carnarvon Boroughs wrote: Lord Kitchener observed, 'No man in the Cabinet has disappointed me as much as Runciman.' According to that book, Runciman had given an undertaking to Lord Kitchener that he would accept responsibility for the organisation of supply in the engineering industry, and Lord Kitchener went on to say to the right hon. Member for Carnarvon Boroughs: He undertook to organise the engineering industry, and it was a complete failure. Are there any Lord Runcimans in the Cabinet at the present time? Are there any Lord Runcimans behind the scenes who are not handling this machine in the competent way in which we desire it to be handled? I am addressing my remarks particularly to the Minister, and I want him to understand that 1 am not speaking only within the narrow limits of his responsibility, but about the Cabinet responsibility in this issue, for I am convinced that the Minister has not got the responsibility and power which he ought to have if he is to get the best out of this organisation. It is for the purpose of bringing this out into the open that I want to make these observations. The right hon. Gentleman the Member for Carnarvon Boroughs wrote in his book: We were at war, and every hour counted. I remember the leisurely and even dawdling way in which the Coalition had been pieced together. As I watch some Members of the Cabinet and some of the Under-Secretaries, the leisurely and dawdling way in which they are going about their duties and business, I am reminded of the remarks of Lord Kitchener and the right hon. Member for Carnarvon Boroughs. I know it can be said that in many cases bustle does not mean business, but anybody who has had an opportunity of moving among men of all grades and social standing, any one who has been engaged in large-scale industry in this country, has an idea, from the demeanour of a person and the way in which he goes about his daily business, how he is carrying out the duties he has undertaken. Therefore, the first question I want to put to the Minister and to the Cabinet is whether we are going to avoid a repetition of all that which lies behind the remarks made by the right hon. Member for Carnarvon Boroughs in his War Memoirs.

I know the engineering industry of this country. No one in the House knows the engineering industry better than my hon. Friends on these benches. We say that the engineering industry can be organised, if the various units are organised, to supply the goods in the minimum time. We know the engineering workers, and we say unhesitatingly that they are among the finest craftsmen in the world. I beg the Minister and the Government to give the engineering workers of this country no cause for reasonable grievances. If they are to be treated in the way in which some people are apt to treat them, if they are to be treated in the way in which they have been treated at certain times, it will tend to create friction, and there will not be that confidence and respect which we on this side desire to exist. We do not want a situation to arise that will give cause for legitimate and reasonable grievances. Our men do not want mollycoddling—they have never been used to that—but they require reasonable treatment and they require that their representatives in the work shops, outside, and in this House, should have an opportunity of stating the case for the organised people who will be responsible for producing the supplies for which the Minister has accepted responsibility.

That brings me to this point. During the past week or two, an agreement has been concluded as a result of negotiations between the Amalgamated Engineering Union and the national association of the engineering employers. That agreement is now being carried out in the localities. Anyone who knows the industry, knows that that agreement, in itself, is a revolution. A few months ago no one would have thought it possible for the employers and the union to conclude an agreement of that character. Yet the Prime Minister has not said a word in regard to that agreement. No member of the Cabinet, no Member of the House, has paid a tribute to the engineering unions and employers for having made that agreement. I served for six months on a committee which considered this problem. That committee was composed not of legal people, but of practical people representing all grades in the engineering industry—manufacturers, administrators, managerial staffs and the practical men who do the work.

In the publication "Labour and Defence" there is a clear statement of policy on the basis of which I desire to put certain questions to the Minister. Is the Minister satisfied that he has selected a sufficient number of experienced specialists to whom he can, with confidence, relegate responsibility? Is he satisfied that he will be kept well informed of the changing conditions and the changing needs of the situation? Is he satisfied that his machinery will function with such efficiency that he will know, from week to week and from day to day, the needs of the situation? I have no confidence in the average retired member of the naval or military forces. I see them sitting all round me and I have heard them, and what I have heard gives me little confidence that they can carry this matter through in the way that is required at the present time. Most of these men are already retired. Surely, what we want in these days are young men with a reasonable amount of experience, who can devote the maximum of energy to this business. It will mean working nearly 24 hours a day if we are to get the best out of the machinery which is being set up now.

Is the Minister also satisfied that he has appointed reliable liaison officers, who will watch events directly on the spot, where the campaign is taking place, and who can, where required, learn the lessons of what is going on and report to him and to the policy committee and to the research committee and to the designs department, in order to enable us to keep in the fore front and to keep pace with the changing conditions and developments which are bound to take place in modern warfare. We all remember the development of the tank in the last war. We remember how it gave prestige to Britain and increased the moral of our men in France when the tanks went over at Cambrai. We remember the development of the convoy system and the new idea of the paravane. When one reads Hitler's threats of what he will do in certain eventualities, one would expect some spokesman of the Cabinet to reply in the same way and to state that research has been carried to such a point in this country that it is only a matter of time before the world gets certain surprises with regard to dealing with certain war weapons—surprises for which the world is not bargaining.

Knowing the spirit of our people at this time, we want a Government and a House of Commons, including our own party, which will be worthy of that spirit and all it means. That is why we cannot enter into this discussion in the complacent way in which some hon. and learned Members have done. We feel that the Government have entered into this war in too languorous a manner and it is our duty—it is particularly the duty of Members on this side—to put forward constructive and objective ideas and criticism in order to shake this Government out of the complacency which they appear to be adopting. May I remind the House of another passage from the writings of the right hon. Gentleman the Member for Carnarvon Boroughs—and I wish that this could be printed in bold type. He says: I have been a pretty hard worker all my life. But I never worked harder than during the period when I was carying through the organisation of our munition supplies …not even during my Premiership. That is the attitude we want the Cabinet to adopt now. We are convinced that is not the attitude which the Cabinet is adopting and it is because of that fact that we speak in this way. There is another question which I would put to the Minister. Has the whole process of re search, design, specification, planning, contracts, production, progressing, inspection, test and delivery now been made the responsibility of the Ministry of Supply? If not, why not? Is it the case that service personnel is still in charge of experimental and research establishment? Is it the fact that the Department of the Director-General of Munitions Production consists of service personnel? Why are there not two shifts on all factories that are being built at present for war purposes? I know that the building of aircraft factories is not the direct responsibility of the Minister, but I ask why are there not two shifts on the building of all factories for war purposes. The Minister indicated the personnel of the Munitions Council. I would be the first to admit that Sir Harold Brown is capable and competent and has the confidence of the industry and understands his busi0ness, but I canot say the same of the supply council in general. I do not want to carry that point too far at this stage, but we shall watch developments and hope that our suspicions will not be con-finned by events in the coming weeks. I wish to quote an extract from the proceedings of the Royal Commission on the Private Manufacture of Arms. Mr. McKinnon Wood was being cross-examined by the chairman. He was head of the Aero-Dynamics Research Department from 1919 to 1934 and these are his conclusions, which ought to go upon record: One has, to my mind, a rather large number of competing drawing offices, and I have felt for a long time that the industry would be improved by a reduction of the number of units.…It seems to me that the essential thing for rapid expansion is a centralised control. If we accept that, it leads us to the question of the need for setting up of a Ministry of Munitions which will co-ordinate the supply to all the Services. In my view, the Minister of Supply should be Minister of Munitions with power to co-ordinate and to produce for all the Services, everything that is required.

My conclusions on this aspect of the problem are—and I am not speaking for myself, but after consultation with a number of representatives of the men and of big-scale industry in various parts of the country—that the supply service, to be efficient, must have command over all the services of supply, beginning with de sign and ending with delivery to the Ser vice of the complete and tested equipment. It may be mentioned as a matter of history, that for many months the supply services of the Ministry of Munitions were seriously handicapped, because they had to wait on design and specification at the beginning and upon inspection and testing at the end, until these Departments were incorporated in the Ministry of Munitions. It is impossible to plan output and delivery on an adequate scale, according to a time-table, unless all these services are linked up with the Supply Ministry. The Minister said that 28 national factories had been set up and that six more were to be built.

Mr. Burgin

No; 28 is the total, including the six that have been put in hand since the beginning of the war.

Mr. Smith

I know that several of these national factories are being run as efficiently as it is possible for factories to be run, and that the production is a credit to all who have had any responsibility for managing or for producing in any of those factories. There is one factory in particular, but I shall not mention its name, because although some of us have not been legally trained, we know better than to do that in this House, knowing how the OFFICIAL REPORT is read in Ger many from day to day. I have never forgotten going on a deputation' to Germany in 1936, pleading for a more generous treatment of trade union representatives and other people, and having to meet a certain civil servant in Berlin, who gave orders to one of his under secretaries to bring out copies of the Official Report, and how he could quote from those copies what certain hon. Members had said in this House. There fore, although this is a democratic assembly, it behoves us to be most careful how we mention certain things, seeing that we are trying to unite the people of this country and to conduct ourselves in a responsible manner, in order that not one life shall be unnecessarily spent in the campaign in which we are engaged.

I was saying that I know one factory in particular that is under national control, being run by the State, and if only production in this country were run in the same way and on the same lines, it would bring about the same atmosphere, which enables the maximum output to be obtained from the men as a result of the maximum amount of consultation with them, and which gives the men confidence in the management, with the result that you have a healthy atmosphere without any quibbling at all. I am pleading for more of these factories. I know of no way of helping the spirit of our people better than by giving them confidence that there will be no profiteering in armaments on this occasion. That brings me to the words of a distinguished civil servant who had a great experience in the last war. There is a book in the Library, which any hon. Member can take down, called "Experiments in State Control," written by Mr. E. M. Lloyd, and in that book he writes: In the national factories established by the Ministry of Munitions instructions were given for careful cost accounts to be kept. By this means it was possible to ascertain with great exactness the cost of production, and to compare costs in the different factories item for item. The Minister has a great responsibility. I know that he recognises that, and I am hoping that the example that has already been set in these State factories will be followed. There is no fear of bureaucracy in these factories. These men are practical men who have been used to accepting responsibility, and any one who is used to accepting the responsibility of management, owing to the competitive drive which this social system produces, knows that men have not got to be bureaucrats in industry to obtain the men capable of giving the maximum output in the minimum time. Therefore, there is no fear that these men, who have not been brought up just "talkie talkie," cannot be made responsible. Again I want to quote the evidence of the Royal Commission. The Chairman was putting questions to Major-General Sir Stanley von Donop and said to him: You have held the appointments of Professor of Artillery… Superintendent of Experiments … Secretary of the Ordnance Committee… Master-General of the Ordnance? Sir Stanley replied in the affirmative, and the Chairman asked him a number of other questions, to which he replied, talking about armament factories: The only reason they could not do it was that they found almost every other country in the world demanding machinery from America. They could not get the machinery to do it, and that was why they failed. I want to ask the Minister whether the future supplies of machine tools will be sufficient to meet our demands. Are we well prepared for repairs and replacements? There was a shortage of labour, and especially of skilled labour, in the last war, and the question that I want to put to the Minister is whether we are sure that we have safeguarded that on this occasion, because I am sure that we have not, and I want to produce proof of that. Sir Stanley von Donop went on to refer to delays in delivery of machinery, due firstly to the fact that the whole world was calling for machinery, especially from America. … Are we taking steps to organise the maxi mum production of machine tools from the Dominions, from the Colonies, and from Eire? I know of no greater need, so far as the political situation in this country is concerned, than to take steps to improve the feeling between the whole of the Dominions, the Colonies, and Eire, and, therefore, it is essential that we should take steps of this character to help us in other respects. The Minister stressed the importance of jigs, tools, and gauges, and these will be more important than the average Member of this House realises. There will be enormous wastage in modern warfare, and that will demand adequate maintenance staffs and an adequate supply of spare parts. In order to reduce to a minimum the time spent on repairs and fitting spare parts, it will be necessary to have the jigs, gauges, and tools more accurate than ever they have been in the past. Yet we are allowing pattern makers, tool fitters and instrument makers to go into the Army at 25 years of age. Every newspaper contains advertisements for tool fitters, instrument makers, pattern makers and highly skilled men of that kind, yet the Government are allowing men of 25 years of age to go into the Army.

The Minister is not directly responsible for this, but he is responsible for supply and he cannot obtain it unless he has the men to produce the supply. The War Cabinet issued a statement a few days ago stressing the importance of the export trade. I agree that it is most important to maintain the export trade because it will enable us to maintain economic stability. This war may develop into a war of attrition, and economic stability and the export trade will become import ant factors. Yet young men of 19 to 23, who would be the skilled craftsmen of one, two and three years ahead will be allowed to go into the Army as they were in the last war.

The Ministry of Munitions became very efficient in the last war but only after three years. We do not want a repetition of that experience. We say that the only efficient organisation is a Ministry of Munitions which should be set up as soon as possible. We recall the complacent manner in which the Prime Minister replied to a question on this subject last week. We hope that the lives of our men will not be sacrificed as they were from 1914 to 1916. We cannot afford it. Lives are too precious. The struggle in which we are engaed is too important. The whole future of humanity is wrapped up in this struggle. Therefore, we want an efficient organisation in order that our men can go out and display the same bravery which they have displayed in the past, the same bravery as the Poles have displayed, but with this difference, that they will be armed better than the other people and harnessed to the most efficient supplies in order that they can deal with the most ruthless and unscrupulous people ever thrown up in the world's history.

Is the Minister satisfied that we are taking adequate steps to plan and organise the volume of assistance which will be required? This war means life or death to our nation, and we on this side, representing the freedom of the people of this country, are confident that the spirit of our people can be organised to an efficient machine so that, come what may, they will pull through in a way that is worthy of this country. The whole Empire has rallied to our support and nothing should be allowed to stand in the way of welding together the British Common wealth of Nations—all those nations that stand for the good of the future of humanity. It is because we have these ideals at heart that we are pleading for more vigour and more life in the Cabinet, in the Government and in the House of Commons, in order that the Government and the House can be worthy of the people we represent.

8.15 p.m.

Mr. Magnay

I am sure that the hon. Member for Stoke (Mr. E. Smith) will allow me to say that he and his Friends are not the only representatives of the working classes in this House. I represent 78,000 people, over 90 per cent. Of whom are working-class people, and I am proud of the fact, being of that class myself. I am the only one of my stock who did not go into a factory. I had among my near relations seven foremen and managers, and I was told that be cause I would not go into a factory I would be a 30s. a week clerk. If I had gone into a factory I should probably not have been standing here, because of the fewer opportunities which boys had 50 years ago. There are Members of Parliament on this side like me who take pride in the fact that they are of working-class stock and that they represent a free people who freely elected them here. In my case it was to represent what was considered the strongest Labour constituency in England.

When the hon. Member talks of the complacency of Members on this side and of responsible Ministers, I suppose he would say the same of Sutcliffe and Hutton when they go in first for York shire because they do not make a fuss, knowing very well that they can deal with any bowling they have to meet. Anybody who did not know the elements of cricket would think that these men were complacent as they walked without fuss to the wicket, took their centre, and prepared to punish the bowling from whatever source it came. Hustle and bustle are not attributes of efficiency. It is easy for Members of the Opposition to say, without any justification, that be cause a man knows where he is going and knows how to do his job he is complacent. A man who is fussy and allows his papers to be all over his desk is not a good man at his job. A man whose desk is tidy and who, in a complacent sort of way, puts them in their dockets and knows where they are when he wants them, is the competent man and can do his job in the shortest time. I am certain it is the same with factories. My father, who was a blacksmith, used to say that there were some men whose faces were black after only half an hour, as if they had been in the factory all day, but that the best smiths were the men who could keep their faces clean all day. Such men were complacent about their jobs and that was because they could do them properly.

I wish to make some observations which I am sure are present in the mind of the right hon. Gentleman about the trading estate at Gateshead. The Government have expended there a capital of £2,500,000 plus Nuffield and Treasury grants. On the average I should say that a considerable number of these factories have been established about 12 months. In other words they are infant industries, and in a state of emergency such as this they are naturally very nervous about the drying up of orders from private sources. I know that the Government are not averse from helping these industries, but I suggest that they should be given every opportunity of being nursed, so that a job which is difficult for old-established industries of many years standing should not be made impossible for them. I think the small industries should be given every consideration—small factories run by men and their families, which are very competent in sub-contract work. This last week a firm wrote to me to see if they could do anything in a certain kind of work. I suggested that they should go to a larger factory in their neighbourhood and see if they could do it. I was glad to be informed on Saturday morning by both factories that it had been managed. I think that co-ordination in sub-contract work by small factories working for larger ones in the same neighbourhood could be easily and well done and with the greatest economy.

I thank the responsible parties in the Ministry for doing what they have done in the last few months. I had six letters last Wednesday and Thursday about work for these factories on the trading estate and I am glad to say that I managed to get something for four of them. That is my happy experience. But I want it put on record that these factories should be nursed because of the huge capital expenditure recently incurred from Government sources and the fact that they must not be allowed to go "phut." They have been helped hitherto and it is only common sense that they should be helped, and I appeal to the Minister to see that that is done.

8.24 p.m.

Mr. A. Edwards

I wish to congratulate the Minister on making a very wide, detailed and helpful survey of his De partment. I am certainly not going to criticise him personally, but he would not expect that there would be no criticism of his Department. That is our purpose in being here, to point out ways in which we think it should be improved or things that ought to be looked into. I was interested in one matter raised by the right hon. Gentleman the Member for Sparkbrook (Mr. Amery), which will be come a more vital one as we go along. That was his proposal that the Government would have to watch the purchases of raw materials from sources which now supply Germany. It is going to be very important. The right hon. Gentleman suggested that we should have to con sider even paying high prices. Germany has been doing it for some time in these markets—paying prices which are not economic. We may have to pay un economic prices for these things and, in turn, we shall make some exchanges which will help to finance that and there may be a net loss on balance. The important fact to consider is, as the Minister said, that he is going to pay world prices for raw materials. We shall have to watch that what he pays for that purpose does not become the world price which our merchants will demand. I hope he will keep that in mind and give an assurance that world price will not be governed by that factor.

There is the question of supplies of all kinds of material from America. I presume we are going to be enormous purchasers from America. Already on the Stock Exchange there is gambling on the prospects of an enormous profit, and certain stocks are mounting sky high. I hope we have a sound organisation in America dealing with whatever purchases we have to make there. We have the almost unanimous sympathy of America and some very good work should be put in to see that we do not have to pay too much. The Minister said he was only purchasing for certain Departments.[Interruption.] I felt sure that we should not be in a position where Departments were going out in dependently and buying the same materials. What the right hon. Gentle man said rather led us to suppose that that was the case. There is the question of clothing supplies and Lord Woolton, who is in charge of it. Another committee was appointed quite recently with Sir Henry Price and Sir Montague Burton on it. Is that the same committee?

Mr. Burgin

No. That is the Committee dealing with the making up of clothing. Lord Woolton will be the Director-General of army clothing, equipment and stores. The other is a committee which deals with the production of the made-up garment.

Mr. Edwards

I understand that Lord Woolton is also controlling this committee. I was discussing the matter with certain manufacturers in Leeds and I was a little concerned about the powers of people in positions of this kind. We hope they will exercise them discreetly and get the best terms for the Government so that there will be no profiteering. But I was told that Lord Woolton, or his representative, who was presiding at the conference, had insisted on buying the goods at an uneconomic price. The people showed me their costs and the price the Government said they must supply them at. They assured me there was going to be no profit whatever. That is not the kind of dictatorship that we want in these Departments. I hope the Minister will look into the case. When I tell him it was Leeds Wholesale Manufacturers he will be able to track it down. Lord Woolton will probably have a different view of the conference, but it is not good for trade. That is as bad as going to the other extreme. What I disliked was that, when they insisted that they could not afford to manufacture the goods, they were told, as it was put to me, in a rather arrogant manner, "You know the powers I have. If you do not do this I can step in and make them myself." That may be a useful power, and I believe he has that power in an extreme case. But it is not the kind of thing to use at the beginning of your negotiations with people of that kind. I hope there is no truth in it but the statement was made to me, with a feeling of grievance, that they were being pushed into a position which was not going to be helpful to anyone at all. I should like to ask whether these district commissioners, the ex-admirals who have been referred to—of course, a man is not necessarily incompetent because he has a rank in one of the Services—are drawing a State pension or a sort of half-pay, or whatever they get and an additional salary. That is probably one of the things that will cause bad feeling among certain critics.

The Minister said everyone who has a factory and is in a position to produce any of the innumerable things which will be required is to have an opportunity to do so—to keep the factories going, I think he said. Presumably it will be at an economic price; but an economic price for a large and efficient factory will not necessarily be an economic price for a manufacturer with a small factory. Still, those small factories will be useful and there will be hundreds of them which will be glad to do these jobs, but cannot get them at the moment. Just outside my constituency there is a small but very efficient factory. The firm offered their services to one Department and received in reply a very curt note. It did not say, "We are sorry that we cannot give you any orders at the present time, but we take a note of your offer if an opportunity should arise in the future." The note just said, "Sorry we cannot utilise your services." That sort of thing is no good. That firm was rather discouraged, because they had thought that in this emergency their factory would have some thing to do. What they manufacture is an article of clothing, and there may have been some particular difficulty in that case. I asked an official about it, and he said the factory was not big enough. I do not think that is necessarily a good reason for turning the firm down abruptly when they offer their services. These little factories may be very valuable before we get far in this campaign.

I should like to know how the Minister proposes to fix economic prices. The hon. Member for Stoke (Mr. E. Smith) mentioned the matter of machine tools. On several occasions he has referred to these particular manufacturers. Not so very long ago they refused to produce their costs to the Government. I should like to know whether anything has been done about that. Are there to be fair costings, so that these manufacturers are not allowed a perpetuation of their abnormal profits, exorbitant profits for many years to come. I hope that we shall have an assurance that they have been brought to heel and have allowed the Government to see their costs, and that the Government will allow only a reasonable profit.

Another case I should like to mention is that of a small firm in my constituency. They are not a manufacturing concern but a firm of electrical contractors, one of the most efficient in the whole country.

They are financially sound and have more men working for them than any other electrical contractors within 40 miles, but the Government will not give them a direct contract because they do not happen to be on the list. This big concern has to take sub-contracts from firms much smaller than itself. It has asked to be put on the official list, but there is a lot of messing about with those silly people in the Department, and it cannot get on the list. When there were some very important jobs going the district commissioner, who is a soldier, told this firm who had been refused contracts because they were not on the list "Get on with the job, never mind Whitehall." The firm did get on with the job, and they did the job—against all the rules of Whitehall. Fortunately for the country, the job is completed. Fortunately, there are a sufficient number of people in the Services with enough good sense to ignore Whitehall when there is a real emergency. It is a pity that someone cannot be chased off and these silly regulations broken down. This most efficient company might have lost their men—pinched from them by some less efficient company.

I may not get replies to all these points to-night but they will be on record, and I know that the Minister is always good enough to give us his assurance in these matters. He spoke about profiteering. He said, "If they get away with exhorbitant profits we catch them on the N.D.C." I do not think that that is good enough. I know that the Minister is right and that he will catch them, but I hope that he will not take it easy because he has a sort of control. We know people who paid 80 per cent. excess profits in the last war, and yet made fabulous profits. That sort of thing puts up the cost of things all round. The Minister could make it understood right at the be- ginning that to catch them on the N.D.C. is not good enough.

The Secretary of State for Air defended himself on this question of profiteering in a most remarkable way and I hope that the Minister of Supply will not stand for that sort of thing. The Secretary of State justified exhorbitant profits made in the last year or two by aeroplane manufacturers by saying that they had suffered losses in previous years. That is not honest dealing. I lost money in my business for 10 years and I have written it off. My costings to-day cannot include my lost dividends over the last 10 years. I hope that the Minister is a better man than that and will not stand for such things. Only this week I had occasion to take up the question of the inflation of shipping shares. It is not serious yet, but people are beginning to see a prospect of enormous profit in that direction and the shares are going up. I hope that the Minister will issue a warning to the investing public that it would be unsafe for them to pay very high prices for shipping shares, because the Government are not going to allow profiteering. On a previous occasion the Prime Minister gave a similar warning when he said: I want to give a warning right here to the investing public that it will be unwise of them to invest in armament shares in the hope of making fabulous profits. I hope that the Government will give a warning that the investing public will be unwise to put its money into these industries in the hope of profiteering.

I have one last word to say to the Minister. I do not criticise him for choosing ex-admirals or ex-captains. We must get the most competent men wherever we can find them, but it is a pity that the Government have gone out of their way not to get into their organisation representatives of working people. Perhaps they could not get them at first hand, but they should get a certain number of important key men in the engineering industry. These are not the men who sit at the desks and ring the bells for other people. The right hon. Gentleman knows that to be true, as a Minister. He has to get a lot of his information from Tom, Dick and Harry, and when he makes a speech in this House it is upon information supplied to him by various people in the Department. It would be invaluable for the Minister to have around him in his organisation practical men from the works. In the last war I was responsible for running works. I had some engineering knowledge and some know ledge of production and I was working in the works. Somebody has said that rushing around smartly is no proof of accomplishing anything and that a man sitting at a desk may be doing vitally important work. The Minister should have around him men who know from the inside the running of factories, practical engineering men, who have had experience of running large-scale engineering plants. I could name a dozen men in this country who have worked their way up into responsible positions and who know engineering works inside out. That is the type of man I mean. I do not mean men of the type of the hon. Member for Ipswich (Mr. Stokes). He rings the bell. He has on his staff some men from whom he can get knowledge of the real facts. I would like to feel that the Minister had around him not only men with titles and high-sounding names, but men whom he could call in for in formation on costings and other matters of that sort. It is a pity that he did not say something about his collaboration with the Labour forces of this country; otherwise, he gave us a very valuable survey of the Department at the head of which he has been for only a very short time.

8.41 p.m.

Mr. Sexton

We have heard from my hon. Friend the Member for Stoke (Mr. E. Smith) some account of the muddles of the last war. In the face of those muddles, everyone will hope that we have an efficient Minister. This Ministry of Supply has an immense task, because of the diversity of its activities and the tremendous consequences of its success or failure. To a very great extent, it can be said that on the functioning of the Ministry of Supply will depend the ultimate shattering of the anti-democratic forces arrayed against this country. The terrifying ordeal of war is the alternative to suppression of liberty in this country. The Minister has a hard job. For one thing, his position is new and everything that is new has to go through various experiments before it will function. He had the arranging of his staff—a difficult thing to do, as everyone who has had to organise a new staff knows. Then his Ministry covers a wide field—a far wider field than that covered by the Ministry of Munitions in the last war. Finally, this machine of his had, unfortunately, to begin functioning in war time. There have been tremendous developments since the Minister was Minister-designate. The greatest development has been the development of war, which interposed just as he was finding his feet. Modern mechanical development is bound to in- crease tremendously the responsibilities of the Ministry of Supply. Upon this Ministry, I repeat, depends largely the successful carrying on of this war, so the responsibility that rests on the Department and on the Minister is a tremendous one. If the Minister can say, "Well begun is half done," we on this side shall not be too critical of his efforts.

I have not heard any reference in this Debate to one of the essential commodities for which the Ministry is responsible, but the right hon. Gentleman and I had a short conversation about it some time ago. That commodity is calcium carbide. In March, 1936, the Government realised their responsibility in regard to the manufacture of calcium carbide, because the present Lord Chancellor, who was then Minister for the Co-ordination of Defence, said that the Government had not lost sight of the importance of ensuring supplies of calcium carbide, both in peace and in war. It is, indeed, an essential commodity. In the first place, it is the basis of calcium cyanamide, which is the fundamental of nitric acid; and, as we all know, that is the absolute basis of high explosives. We do not want a repetition of the Great War, especially of the first year or two, when the cry went up from the trenches, "Send us shells; send us. munitions."

To a large extent, the production of calcium carbide will govern the quantity of high explosives that we shall be able to send overseas or to use at home. Calcium carbide is the source of acetylene, and the oxy-acetylene flame is very largely used in the welding of aero plane wings and the welding of machinery. Calcium carbide can be used as a nitrogenous fertiliser. The Government have recognised during the last year or two that the fertility of the soil is of paramount importance. They have made grants to farmers for the supply of lime and basic slag, which are slow acting fertilisers, but nitrolene, which is a pro duct of calcium carbide, is a quick-acting fertiliser and would be of great use now when stable manure is so scarce. It is a really quick acting manure, and such an important commodity required by this nation ought to be manufactured at home, and the Minister has the power to do it. Every ounce of it that we use is imported. In 1935 over 1,000,000 cwts. valued at over £600,000 were imported, and in 1936 a similar quantity was imported.

For four years at various times Members on this side of the House and Members opposite have urged upon the Government to get on with the home production of calcium carbide. There have been squabbles as to whether it should be manufactured here or there, but the job should be started at once. There is no reason for this country, especially in a time of critical danger, to rely upon the imports of calcium carbide. The elements from which it is made are abundant at home and of excellent quality. I refer to the coal and the lime stone. In my division both these com modities are next door neighbours, requiring no cost of transport. There is carboniferous limestone 30 or 40 feet thick with no covering on the top. I could take the right hon. Gentleman to a quarry which could be started to-morrow which has been standing idle for 20 years or more. It is beautiful stuff, 98 per cent. of it being calcium carbonate, very nearly approaching calcium carbide itself. Not only have we probably the best limestone in the world, but we have also Durham coal, which is also famous in the world. The power that could be used to manufacture calcium carbide has always been a debatable point. It has been said that to make calcium carbide efficiently from the coal and the limestone you must have hydro-electricity. We have falling water in the division that I represent; one of the biggest waterfalls in the country is situated in the middle of it. That power could be harnessed, but it would take three years to produce calcium carbide if you had to harness water for hydro-electricity. The alternative is to use thermal electricity by steam, when you could get production in at least a year.

Over and above that, we have miners and limestone quarrymen in the immediate neighbourhood unemployed. The men are waiting to tackle the job. The materials are there. Now, we have a Minister of Supply, and I hope he will get to work, if not in my division, at any rate in some part of the country. It is too dangerous to be left undone. The Minister has the powers, and I hope he will exercise them. We should not be dependent upon imports at this critical time. The right hon. Gentleman will be able to control the price of the material far better if he makes it than if he imports it. He will also save the risk of importation of this vital substance. He will thereby set free ships to bring food or other commodities to the country. I do beg of him to take action. He promised that he would look into the matter, and I know that he will do so. I ask him to give the most favourable consideration to the manufacture of this most important commodity.

8.51 p.m.

Colonel Llewellin

The Debate has ranged over a considerable field, and if in winding up I omit to answer some particular point I hope that the hon. Member concerned will forgive me.

Mr. A. Edwards

You have two hours.

Colonel Llewellin

I should not like to worry the House with a two hours speech at the end of the Debate. I will deal first with the point raised by the horn Member for Barnard Castle (Mr. Sexton). I can assure him that the Government are well aware of the importance of calcium carbide and that if it becomes necessary we shall certainly set up an industry in this country. The House and the country may rest assured that at the moment we have a large store of that material in the country.

The Debate was started by the right hon. Member for Wakefield (Mr. Greenwood). I think his first complaint was that the organisation set up was too bureaucratic. I do not think that is the case. To the new organisation we are bringing in business men from outside, people like engineer admirals and business men who I am sure would be the last people who would wish to be regarded as bureaucrats. We are bringing a fresh kind of business experience into the Ministry and are strengthening it by the selection of men of experience in industry.

The next point that the right hon. Gentleman dealt with, and other speakers have referred to, is the function of the area organisers. I think they did not quite understand what that function is. What is being set up in each of the 13 areas corresponding with the areas of the regional commissioners is this particular kind of area organisation. The names of the persons who have been appointed by the Ministry will be published in the OFFICIAL REPORT. We hope that we shall also get representatives of the other Service Departments. These are only a kind of nucleus. What that nucleus has to do is to watch production and to direct it. It will see where production is being held up and will make an immediate report to the Ministry. If production can not be hurried up on the spot steps will then be taken so that some part of the production may be placed elsewhere. A second function is to look out for new manufacturing capacity which has so far not been allocated, surveyed or tapped. In doing that I hope that we shall be able to set up in the areas advisory committees consisting not only of business men in the areas but representative of labour working in the areas. If they will come in and give us the benefit of their experience on the advisory committees it will be most helpful to the organisation. Nobody will welcome it more than my right hon. Friend the Minister of Supply, who has authorised me to say that it will be his endeavour to bring representative and experienced work-people on these advisory committees if they will consent to serve.

Mr. Lees-Smith

Is it intended that labour and the employing element shall be equal in numbers and status?

Colonel Llewellin

Yes. These are to be advisory committees, and in the case of desiring new capacity they will advise us as to the places and shops which are more likely to be able to supply the means. We want all the help we can get. We do not want to go to one side. We want to get all the best advice we can in the area, and if representative working people will come in and help us on these committees they will do so on a complete equality.

Mr. F, Anderson

The point is whether the arrangements include iron ore and commodities of that description.

Colonel Llewellin

No, I am dealing with the area organisation which comes under the Director-General of Munitions Production. They are quite distinct from iron and steel control or non-ferrous metal control, which come under their own organisation. What we want is to get 1he greatest help we can from both sides of industry in this new and colossal task of finding all the productive capacity we shall require for the programme which is before us. The hon. Member for Stoke (Mr. E. Smith) paid a well deserved tribute to Sir Harold Brown. The names of the Engineer Rear-Admirals have been largely submitted by him. I believe we shall get extremely good service from these gentlemen.

Sir P. Harris

Does that mean that only Engineer Rear-Admirals are qualified for these posts? Can the hon. and gallant Member draw these regional officers from a larger field?

Colonel Llewellin

They are drawn from a larger field, but these Rear-Admirals have been mentioned in the Debate. One of the mistakes made in the last war was to draw too many people out of productive industry, and we do not want to make that mistake again. Where a skilled engineer is doing his greatest task for the country at the present time is by working in his particular industry and not by sitting outside of it as a mere organiser. We do not want to draw people from productive industry.

Mr. Stokes

Does the hon. and gallant Member realise that these gentlemen, however skilful they may be in their own profession, know absolutely nothing about industry?

Colonel Llewellin

I do not think the hon. Member should jump to that conclusion.

Mr. Stokes

Would you put me in charge of a battleship?

Colonel Llewellin

I was rather amused when an hon. Member told the hon. Member for Ipswich (Mr. Stokes) that he knew nothing about engineering. We have selected for these jobs people who know something about engineering. What we want is engineering capacity, and people who can tell us how an engineering job is progressing. We do not want financiers and people of that sort. The hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) said that the industrial survey ought to have been completed. We have surveyed over 9,000 different firms in the country, and we have them to look to now. A great deal of that capacity has not been allocated so far, but no doubt it will be in the very near future. I am sorry that no reply was received to some letter, but certainly I can say that if any particular cases are sent to my right hon. Friend, he will willingly inquire into them, and, of course, if hon. Members will send them to me, so as not to place on the Minister rather lesser matters of that sort, I will inquire into them.

Sir P. Harris

I did not raise one particular point as such, but quoted it as an example. There is an impression among a great number of firms that the Government have not much use for the smaller engineering firms. What we want is an assurance from the Government that where a firm is efficient and up to date, the fact that it is a small firm will not in any way handicap it in its consideration for a claim to orders that are going.

Colonel Llewellin

I will deal with that matter in a moment, but I was dealing with the point that no reply was received to one or two letters. I am sorry if that has happened, but hon. Members, will realise that the Ministry has been expanding at a tremendous rate and that there has been a tremendous pressure of letters. Many firms were quite content to carry on their ordinary business while it lasted, and are now offering their services to the Ministry of Supply. They may be needed, and the letters ought to have been answered. Let it be clearly said about small firms that if those firms have the necessary technical knowledge and the equipment, we intend to use them, but it is no good a small man with a way-side garage, with half a lathe and a few spanners and things of that sort, thinking that he can contribute very much to the munitions production of this country. Where there is a good, sound firm with proper technical knowledge, we intend as soon as we can, in one of the ways that my right hon. Friend has indicated, to make use of that firm. Of course, it will be easier to do so in the case of firms equipped for metal work rather than those equipped for woodwork, of which, of course, there is not as much needed in this war. In the last war, the frames of the aeroplanes were mostly wooden, but this time they are metal frames, and probably wooden frames would not stand up to the tremendous speed and the dive-bombing speed of modern aircraft. There is not the same opportunity for wood working firms, but for the metal working small firms, there is certainly a great deal, and we shall be able to employ a very substantial number of them The hon. Member asked a question about blankets. Although in regard to many things it would be quite wrong of me, as the House will realise, to give numbers, that is not the case with blankets and I can tell the House that we are getting blankets delivered at the pre sent moment at the rate of about 1,000,000 a month on the Ministry of Supply orders. That is the justification for the reappointment of Lord Woolton, to whose energy the tremendous flow in the supply of blankets and clothing is so largely due.

Mr. Tomlinson

Has the Minister nothing to say about the workers who produce them?

Mr. E. Smith

Yes, what about the weavers of the blankets?

Colonel Llewellin

I was merely giving a return, and of course I gladly pay tribute to the workers who have woven the articles and even, if I may do so, to the sheep from whose backs the material originally came. The hon. and learned Member for Montgomery (Mr. C. Davies) asked what was being done for the export trade and several other hon. Members expressed anxiety that we should keep our export trade going. It is obviously important that we should do so, and in our letter to the steel controller there is a paragraph indicating that he is to give special consideration to supplies of steel for firms whose goods are to be sold abroad. We want to keep our export trade going to the greatest extent that we can. In some cases, of course, such as that of machine tools, we cannot allow any to go abroad at the present moment, but in cases where we do not want the goods for national needs, manufacturers ought to go on making goods for the export trade, realising themselves and telling their men that they are doing just as good war work by producing goods for the export trade, as by making shells and things of that sort. The hon. and gallant Member for South-East Leeds (Major Milner) was one of those who dealt with the export trade and he also asked what was the line of demarcation in regard to the Ministry's work. I think that point was explained to him at the time by my right hon. Friend. We do not provide the ships or the guns for the Navy, nor the aeroplanes for the Air Force. We provide common user articles such as bombs, machine guns and rifles for all three Services.

Colonel Wedgwood

"Common user" articles?

Colonel Llewellin

Yes, articles for common use by all Services.

Mr. David Adams

Does it include any thing in connection with the Mercantile Marine?

Colonel Llewellin

No, we do not do any shipbuilding. But there is this important consideration. I think the hon. Member for Barnard Castle answered the hon. Member for Stoke when he said that the Ministry of Supply had more powers than the Ministry of Munitions. It is, actually, only a difference in name and there would be no good in the Ministry calling itself the Ministry of Munitions. We should not get any more powers by doing so and we have, at this moment, one power which the Ministry of Munitions never possessed in the last war: we have control of all raw materials, which means that we start with a pretty good control at the basis of every productive activity in the country. We have that power and that is the only way in which we could enter into supplies for the building of merchant vessels which, of course, is primarily a matter for the Board of Trade. The hon. and gallant Member for South-East Leeds also complained that a lot went into the Ministry but nothing came out. I think my right hon. Friend gave him his answer in his opening speech. No less than£70,000,000 worth of orders have come out of the Ministry of Supply since the war started.

The hon. Member for West Birmingham (Mr. Higgs) made, if I may say so, a very helpful speech, and referred to the question of priorities. I think it wants impressing upon everyone in this country that they have not got to wait to carry out an order until they get a priority number. We are sending out a letter now to a very large number of manufacturing firms, because I regret to say that although we had it announced on the wireless, and although it has been on the tape and in the newspapers, people will continuously write in asking for a priority number. In some cases I am afraid it may be that they do not want to take the order or something like that, but in many cases it is a real misapprehension, and they think that priority numbers are important. If we were to introduce priority numbers now, I think we should make the transition too abrupt and that we should cause considerable dislocation of work on existing orders. We want to be very careful before settling priorities. We started the last war with the slogan "Business as usual," and it seems to me that—it is only my own personal opinion—we have gone too far to the other extreme at the beginning of this war. It would be absurd to issue a priority number if you had in a factory half-completed goods which, with a few more weeks' work on them, could go abroad and bring back the exchange that you want, goods which would be put completely out of gear by the too early issue of a priority certificate.

You have the basis to go on of this allocation of capacity. That has been made, and that will help us in the initial stages. We shall bring priority certificates in only when we find that there is not enough production capacity or raw materials, whichever it may be, available to fill the whole of the demand. At the moment we are not doing that, because at the moment we have enough of almost everything to carry on with and enough production capacity for our needs. I hope, therefore, that hon. Members will assist us in this matter, if they find any body writing in for a priority number, and say to them, "Go ahead with your work as you are doing it, and when the Government want you to give priority to anything, you can rest assured that the priority certificate will be given." The hon. Member for Ipswich (Mr. Stokes) said that he hoped there would be a simplification of tendering, and I can assure him that that is now going to be done. We shall continue to want value for money, of course, but we are going to simplify the process.

Mr. Stokes

May I have an answer to my question with regard to the Bofors gun?

Colonel Llewellin

I have not got any body here to advise me about the Bofors gun. I should like to discuss it with the hon. Member if he would like to discuss it with me, but at the moment I am not in a position, as he will appreciate, to reply to a technical matter and a matter of controversy such as that.

Mr. Stokes

It is not a matter of controversy at all, and the Minister knows all about it and has been sitting here all day.

Mr. Burgin

I looked into the allegations to which the hon. Member referred, and I had the manufacturer down to see me. He asked for time to make investigations before anything further took place, and I am awaiting a communication from the manufacturer.

Mr. Stokes

That is two months ago now.

Mr. Burgin

Yes, and I am still awaiting the communication from the manufacturer, who was not prepared to answer the allegations at the time.

Mr. Stokes

May I suggest that at the next meeting I should be present, with the manufacturer?

Colonel Llewellin

I was about to refer to what my right hon. Friend the Member for Sparkbrook (Mr. Amery) said. We have very much in mind to control—and we are making arrangements to do it—any purchases we may be able to make in Canada or elsewhere so that there is no competition. There will certainly be no inter-departmental com petition and we are making suitable arrangements with the French also. With regard to buying from countries from which Germany can buy, that matter is also very present in the mind of the Government. The hon. Member for Stoke asked whether we were going to avoid a repetition of 1914–16. I can tell him straight away that that is the main endeavour of us all at the Ministry of Supply. He asked whether we had any specialists and whether they will keep us informed, and the answer is "Yes." We have not at the moment appointed any body to be liaison officers at the front, although it is a matter which will now be considered, I think it would be unwise to have people permanently there. It will be wiser for people to go from time to time to see how things they have designed are working under service conditions.

The hon. Member asked whether we were doing two shifts on all our new factories. We have had difficulty in getting sufficient bricklayers and carpenters in one or two places and we are making the best endeavours to get them there. I believe that the Ministry of Labour has now succeeded, with the willing co-operation of the trade unions concerned, and that work can now go much faster on these factories. The hon. Member asked whether we had complete control from design to delivery, and the answer is "Yes." He asked about apprentices. It is true that when the Military Training Act was passed it was difficult to draw any line with regard to exemptions, for once we began to make exceptions it would have been difficult to know where to stop. Under that Measure, therefore, a certain number of men were doing military training in the Militia who had been three to five years apprentices at some of the Royal Ordnance Factories. It was absurd, when these fellows were almost fully skilled, to let them go on training in the Army when we shall be crying out for skilled men in the near future. The House will be glad to hear that we have made an agreement with the War Office so that these men will be returned to the Royal Ordnance Factories as soon as may be.

Mr. E. Smith

That is a very wise decision, especially in view of our past experience, but, in view of the necessity of maintaining the export trade, particularly of turbine and diesel engines and that kind of thing, and the need for in creased production for the Ministry of Supply, will the Minister consider applying this decision to establishments generally?

Colonel Llewellin

The Ministry of Labour are doing a general comb-out of those who have been called up and are in reserved trades. They are starting on that at once, because the whole point of the National Service Register was to see that people were kept in jobs that were essential. That is more a matter for the Ministry of Labour than for ourselves, but we are anxious that they should do it. I have informed the House what we have been able to arrange on our own with the War Office with regard to our apprentices. The hon. Member for Gateshead (Mr. Magnay) talked about the trading estates and small firms. I have dealt with the small firms already and the firms on the trading estates will also, of course, be borne in mind if we have any work that they can do.

The hon. Member for East Middles brough (Mr. A. Edwards) asked that the world market price should not be governed by any exceptional sales. It certainly will not be. He asked whether the small firms would be given an economic price. They will be offered work at a price which we hope will be a reasonable one, and, if they can do it at that price, they will accept the work. It may be that later, if we have to go to a wider field, we may have to alter the price, but at the start I think we should offer it all at the same price.

Mr. A. Edwards

That would effectively shut out the very small men. At the outset it is useless to think that the very small man is going to be able to produce at the price that you have already fixed for the very big jobs. It could not be done.

Colonel Llewellin

At any rate, it will probably be based on that. In time we may have to make some alteration in the price, but I think it wise in the country's interest to get the goods as cheaply as we can, and the best firms will probably produce them at the least cost. We shall go to those firms first. I believe that most of the bigger places are bigger because they have shown more efficiency in management and can produce the stuff by mass production which some of these little firms, although efficient in their small way, are not able to do. I think I have answered the main questions which have been put to me to the best of my ability, but there is one thing I want to do, although my hon. Friend the Member for Gateshead did it also, and that is to relieve the House of any idea which may be at the back of their minds that either my right hon. Friend or myself or any of those who work with us is complacent. We realise that there is an immense task before us. My right hon. Friend and I have in common this qualification, if no other, for the job: he was at the front at the beginning of the last war as an infantryman and I was there as a gunner, and we were both out at a time when there was a shortage of shells in France. I do not know which is the worse position to be in, that of the infantry man who is being shelled and asks his gunner for help and cannot get it, or the equally unenviable position of the gunner who is asked to give help and who has no shells to fire back when he knows that his own friends are being fired upon. We have had that experience in our respective spheres, and one thing which both my right hon. Friend and I are determined to ensure, if it is humanly possible, is that that state of affairs shall not recur this time.

9.27 p.m.

Mr. Anderson

I should like to ask one question about control. Take the example of copper from among two or three cases with which I have had to deal recently. Whatever is made from copper, we do not take any control of it at all. I am referring to surgical instruments, into the making of which copper enters. Local authorities are responsible for ordering surgical instruments, and the maker of those instruments says "Copper is controlled, and if I want copper wire I am unable to get it for the purpose of completing surgical instruments." As far as I see it there is a lack of control over the commodity throughout all operations, and I ask for co-ordination at all stages. Local authorities place big orders for instruments which are required on the civil side of their work and will be wanted for the wounded who may be brought to this country. There are many other commodities in a like case and I have simply mentioned copper as an instance. Just as he is co-ordinating so far as private enterprise is concerned there should be some co-ordination so far as local authorities are concerned.

Colonel Llewellin

As I have said earlier, I am chairman both of the Raw Materials and Production Priority Sub-Committees. If it comes down to the issue of priority certificates, the priority goes all the way down to the raw material. It would be absurd to give it to the instrument and not to continue the priority down to the raw material which is necessary to the making of the instrument. If the local authorities find difficulty in placing their orders, their channel of approach to the Priority Sub-Committee is through the Ministry of Health if they are local authorities in this country and through the Scottish Office if they are in Scotland.

Mr. Anderson

I feel that this is a very important point and I hope I may be excused for pressing it. I want it to be understood that these surgical instruments are made by private enterprise for the local authorities and that it is the private enterprise concerns that order the raw materials for the making of the instruments. The local authorities give the orders direct thought the agents, in respect of the surgical instruments. If the maker of the instruments wants copper wire, we are told by the Minister's own Department that the copper wire is not controlled, and that therefore nothing can be done, in the circumstances. I was told only a few hours ago something to that effect by the Ministry of Supply. In no critical sense I ask these questions; I know that some faults cannot be seen until they arise. but I feel that there is the need for consideration to be given to the local authorities in the various health services which they run so that these services can be properly equipped against the time when they may be needed.

Colonel Llewellin

I am not certain about the copper wire. Of course copper is controlled, but I will certainly see what the position is in regard to copper wire. The general position is just the same. However little important an article is, it does not need to be ordered by a local authority to get that preference. If it is a thing which a local authority thinks ought to get a preference the matter is taken up with the Ministry and representations are made to the priority sub committee. That is the system, which ought to work. If there is any difficulty I hope that the hon. Member will tell the local authority concerned to make representations to the Ministry of Health.

Question, "That this House do now adjourn," put, and agreed to.

Adjourned accordingly at Twenty-eight Minutes before Ten o'Clock until Tuesday next, 26th September, pursuant to the Resolution of the House this day