HC Deb 01 February 1940 vol 356 cc1309-438

3.49 p.m.

Mr. Herbert Morrison

I beg to move, That, recognising the vital necessity of planning to the best advantage the resources of the nation for the successful prosecution of the war and for meeting the requirements of the civilian population, this House is of opinion that there should be in the War Cabinet a Minister specially charged with this function. I imagine that, whatever views hon. Members may take with regard to the Motion and the merits of the question raised in it, hon. Members will agree that it is a matter of very great importance and that it is worth while that the House of Commons should have a day's Debate upon it. It is undoubtedly the case—this, I think, is common ground on all sides of the House—that the war of to-day is even more serious in its economic consequences and implications than was the great and important war of 1914–18. The present war involves more considerations of what are known as of a totalitarian character than even the previous war did. We have three first-class arms instead of two, for in addition to the Army, the Royal Navy and what was then relatively speaking only the beginnings of the Royal Air Force, we now have a full and elaborated Air Force as one of the great armed Forces of the Crown. In addition to those three great arms we have Civil Defence, with all its complications and vast ramifications, that has a great deal of repercussion upon the ordinary civil life of the community, and moreover is inevitably costly. We have also the organisation of a more prompt, extensive and intensive economic warfare against the enemy than in the last war. It may be—I do not know, but I should imagine it will be so—if and when all these forces of defence and offence come into operation on a large scale, that the total of the expenditure upon all these services will be greater than it was at the peak in the war of 1914–18.

As a consequence of these much greater economic and financial considerations, the mobilisation and the use of capital, including the price at which loans are raised and the interest rates that are paid, become of greater importance. Finance and its use in general must inevitably he of rather greater significance, and certainly the use, the organisation and the mobilisation of the productive and distributive resources of the country must be of more vital concern to the nation in the prosecution of the war, even more than was the case of the Great War of 1914–18. The organisation and mobilisation of labour, skilled and so-called unskilled, the labour of men and of women, the labour, the abilities and qualities of the technical, the professional and the administrative classes, become of increasingly greater importance. Moreover, the time factor is of great significance in the matter.

There was, I think, a tendency in the public mind in the early stages of the war—perhaps it was a little unwisely encouraged in official quarters—to assume that time was on our side without qualification, and that all we had to do was to sit back and hold tight and the war would be won. There have been correctives in official statements on that point and I think the House will agree that the time factor is only on our side if we make use of it properly. It is vital that the time factor should be examined objectively and properly. Moreover, the House, the country and indeed the world in general will agree that any needless addition of a single day to the continuance of the war would be a misfortune for our country and for the world. Victory we must have, but the sooner victory comes the better it will be for everybody concerned.

Germany has taken another and perhaps an extreme view of the mobilisation of its economic resources. Undoubtedly the Nazi Government for years past have with vigour, intensity, and even tyrannical unscrupulousness, mobilised all their economic resources in preparation for war, and that mobilisation continues during the war period itself. None of us in this House, I hope, is a devotee of the Nazi faith or Nazi tyranny; none of us wishes the Government in our country to be carried on in the spirit of tyranny and oppression in the way that it is carried on in Germany. When it comes to the efficiency of public administration and of the organisation of the nation, whether for peace or for war, I do not believe British democracy need be less efficient than Nazi tyrrany and dictatorship are. On the contrary, it is my belief that, properly handled, properly led, properly managed and organised, British public administration and British democracy can, and indeed I hope will, render a far better account of itself in the prosecution of the war in due time than Nazi tyranny can do. Therefore, I hope there will be no tendency to answer on this point that Germany can do these things because Germany is a dictatorship and that we cannot do these things because we have representative Parliamentary government and because we are a democracy. I do not believe it. I do not think it need be so and I do not think it ought to be so. Democracy is all right so long as democracy is properly organised and led.

Without any wish to make debating points, I submit that in the prosecution of the war and in the economic organisation of the nation which is necessary to that end we should not be inhibited by preconceived ideas as to the maintenance of a particular economic and social order in which we live. We are not debating that issue to-day and I shall not debate it. I freely recognise up to a point that in conditions of war things have been done that are not strictly in accordance with peace-time Conservative principles as to State enterprise and State activity. I appreciate that, but if in the successful prosecution of the war it is a question of maintaining some of the extensive essentials or some of the existing economic and social order, or modifying them, or maintaining certain interests of private people or modifying them, or even suppressing them, I hope Ministers can say that preconceived notions of economic and social affairs will not stop them making the necessary modifications to that end.

In considering the organisation of the appropriate apparatus for the economic organisation of the war I wish to reduce the matter to as simple terms as I can in relation to the elements of governmental administration. I entirely agree, as do my hon. and right hon. Friends, that in the course of day-to-day economic administration, and indeed administration of any kind, the more we can leave to the unfettered executive administration of the State Departments concerned, and let them go ahead with their job without interference, the better it is. The wider the field for permitting the State Departments to go ahead with their job of administration and do it swiftly, the better it is. The less reference to higher quarters the better. There must be such reference, for reasons that I will proceed to indicate, but the less reference to higher quarters, consistently with the other things that I will enumerate being respected, the better it is, and the more State Departments, subject to that general consideration, can stand on their own feet, go ahead, and give quick decisions, the better it is for the efficiency of government.

But in the making of supreme policy, particularly, I suggest, in the making of supreme economic policy, no less than in the making of supreme military policy, considerations do arise which must be taken into account. The first is that the Departments must act in accordance with general Government and national policy. As long as they do, as long as they are clear, they can go ahead, but if there are doubts about it, if there are issues of policy as to which other Departments concerned or the Government as a whole, or the Prime Minister must be consulted, clearly that must be done. Therefore, over that field it must be the case that Departments must act in accordance with general and national policy. Indeed, that is true over the whole field of Departmental administration. Secondly, there may arise issues—there is nothing wicked or shameful about it—where there will be a divergence of views between one State Department and another. There is nothing criminal about it, there is nothing to be ashamed of about it, because there is no end to the different Ministerial angles brought to bear on a particular problem. But if and when these divergencies occur, there must be either reconciliation or decision, and it is profoundly important, particularly in the prosecution of a war, that the decision should he firm and, above all, as speedy as practicable in the circumstances of the case.

It is vitally important that there should be vested in some person and/or authority a general power, not merely of reconciliation, not merely of co-ordination, but a general power of direction, of decision, and, finally, of drive, and I beg of the House, in considering this problem of Government and public administration, to keep in their minds, not so much the word "co-ordination," not so mach the word "reconciliation," not so much the problem of the settlement of Departmental arguments or disputes, but the vital necessity—I think it is necessary in peace, but it is profoundly necessary in conditions of totalitarian war—of direction, of decision, and of drive. It is true that the final decision, as far as His Majesty's Government are concerned, must rest with the War Cabinet—quite rightly so. The War Cabinet, in turn, is responsible to Parliament, which is the supreme authority of the nation, but it is not enough to say that these things can be settled by Cabinets. The work of Cabinets has to be prepared before documents get to Ministers, and Cabinets themselves need firm leadership and firm guidance.

If that leadership and guidance are to be wise, are to be clear, and are to be firm, the mechanism of the Government and administration below the Cabinet must be such that clear advice and clear recommendation must reach the Cabinet in due course. In short, flocks of sheep, as flocks of sheep, cannot govern; a miscellaneous collection of Ministers, as a miscellaneous collection of Ministers, cannot govern; a large number of civil servants, as a disconnected whole, cannot govern. There must be, in the organisation of democratic government, guidance, clear information, recommendation, and leadership; and, therefore, the organisation below the War Cabinet matters just as much as the War Cabinet itself in that respect.

Let the House consider, as no doubt hon. Members have, the wide variety of State Departments that are concerned with economic affairs. There is the Treasury, which is concerned with vast and important financial matters in relation to both capital and revenue account. I shall come back to the Treasury in due course and have something to say about it, rather on the lines that its present functions, through the Chancellor, are stepping beyond what the Treasury can reasonably be expected to discharge, but I do not wish for a moment, neither do my hon. or right hon. Friends, to under-estimate the vital importance of the functions that the Treasury has to discharge, in times either of peace or of war. Any Government that lowers the status of the Treasury unduly, any Prime Minister who weakens the authority of the Chancellor of the Exchequer, any Government, whether it be Conservative, Liberal, or Labour, that is careless in the handling of finance, is foolish and is asking for trouble. It is vitally important that the Treasury should be a well-informed and powerful State Department. I am only concerned, we are only concerned, that it should be recognised that its training, its functions, its sphere of operations are such that it must not be assumed that the Treasury is the only Department, in the final sense of the term, to determine, not the essential financial, but the economic and commercial, considerations, which are wider and in many respects more complicated than the sheer financial considerations with which the Treasury is, quite properly, concerned. Still, the Treasury is vitally involved in these matters.

There is the Board of Trade, with its various departments, its Manufactures and Industries Division, concerned, as it is, with import and export licences, and the mere mention of these functions will indicate to hon. Members that in time of war, clearly, the issue of import and export licences must go widely beyond the considerations that obtain in peace-time, for the considerations that obtain in peacetime are trade, in the ordinary sense of the term, but in war other considerations must arise—the interests of the Ministry of Supply, the interests of the Department of Economic Warfare, the interests of other State Departments—and you have to bring in at this point not only the normal winning of trade in the world sense of the term; you have to consider matters of high strategy in relation to the conduct of the war, both for our home requirements and for the purposes of damaging the enemy. Therefore, the Board of Trade becomes a Department of very great importance in relation, not only to trade as trade, but to the conduct of the war both at home and abroad. The Mines Department is an economic Department. It also conducts and has to do with exports as well as internal trade, and, therefore, there are bound to be considerations in the Mines Department that concern other Departments of State.

The Department of Overseas Trade is concerned as to the offensive against German trade. It will be part of its business to gather up all the trade from former German exports that it possibly can. In a way, that is a normal function as against Germany and as against any other country in the world, but the Department of Overseas Trade ought, I presume, now properly be concerned with strategical considerations in relation to the acquisition of German trade. The Ministry of Shipping is obviously a war Department of very great economic im- portance. It has to be concerned with the replacement of the Mercantile Marine, a matter as to which we have been worried and which ought not to be left alone to the Ministry of Shipping, and indeed, it is not being left alone to the Ministry of Shipping. It is concerned with the organisation of labour for the Mercantile Marine, and then it is concerned with all the complicated problems of the allocation of tonnage between this requirement, that requirement, and still another, running over a wide sphere of State Departments. For example, is the tonnage to be used for the importation of arms and sheer military material at a given time, or is it important that the importation of food, the raw materials of the Ministry of Supply or the Ministry of Food, should be given preference? The whole question of priorities is a matter of concern, not only to the Ministry of Shipping, but to the Board of Trade, and so on.

The Ministry of Economic Warfare has relationships, as indeed the Minister explained to the House, with a wide number of State Departments. There is the nice issue as to whether goods should be purchased, not merely because we want them, but to prevent the enemy getting them, at costs which are admittedly above market prices or prices at which they could be purchased elsewhere. The Treasury may say, "No, this is a waste of money." I am not sure whether they did that in the earlier stages of the conduct of the war, but they might say "No," and from a narrow Treasury point of view I can understand the Treasury saying it. That is why you need another big figure in economic affairs, I will not say to resist the Treasury, but to be an element of considerable importance in the Government, in order that these wider and not narrowly financial considerations shall be given their proper weight. Obviously the Department of Economic Warfare is related to the conduct of trade in the wider sense of the term; that is to say, it is concerned, not with conducting it, but with not damaging it, and, therefore, the Board of Trade must have relationships with it.

The Ministry of Transport is not so wide in its external repercussions, but the organisation of all the various forms of transport within the country is really vital to the successful prosecution of the war. If it were the case that particular forms of transport, or big elements of the transport system, were to be damaged, it would be vitally important that other forms of transport or another part of that system should be ready to take part and to replace the damaged portion of the transport system. In this connection, Mr. Ernest Bevin, of the Transport Workers' Union, recently gave to the Institute of Transport an interesting address, which was worthy of study. He has a considerable knowledge of the subject, for his union deals with many forms of transport outside the railway service. He said, in the course of that address: In view of the fact that we have had the good fortune not to have had aerial attacks, it is not yet too late for the Government to step in and establish a really co-ordinated authority, representative of all forms of transport, so ensuring that if one form is damaged, the other sections can immediately be utilised and come to the assistance of the nation. Mr. Bevin added that that desirable situation does not exist at the moment, and I think it will be generally agreed that that is a vital principle. The Government may have gone on the principle that it can be left to the Ministry of Transport as a purely Departmental matter, but I suggest to the House that it is a matter of such vital importance that there should be a Minister in such a position of authority that if the Ministry of Transport did not take that matter in hand effectively, he would have the right to go to them and say, "You must do it; it has got to be taken in hand, and it has got to be put right."

The Ministry of Labour and National Service is very much involved in the provision and organisation of man-power, not only manual labour, but technical and professional labour as well. The Ministry of Supply is a vast economic organisation, which, however, unfortunately, is still incomplete and is still substantially buying only for the War Office. That seems to be absurd. Unfortunately, the Government have gone on the line that people shall be taken from the trades and industries which they have been running and be transferred to the Departments, to be the big noises in the running of those industries. That seems to be, in the most elementary sense, wrong and contrary to the principles of good public administra- tion. There is no doubt that the economic direction of His Majesty's Government is far from being what it ought to be.

The Ministry of Agriculture and Fisheries is one Department concerned. It may have to meet such an issue as that of whether the War Office, for example, or the Air Ministry, is to drop down all of a sudden and seize large quantities of very precious agricultural land, or whether it should be asked to go somewhere else. Who settles such a question as that? Has the Minister of Agriculture the right to argue? It is not sufficient to be able to argue, because the soldiers are there, and that is the end of it. It is a matter of considerable importance that that sort of thing should be considered in a responsible way. Then there is the question of the home production or the importation of food. That matter was amply debated last week. I do not want to go over the ground again, but I suggest that the result of that Debate indicated that all was not well with the organisation of our food supplies. That point also covers the Ministry of Food, to which I will refer later. There are other Departments perhaps less directly concerned. Obviously there are the three Service Departments, the War Office, the Admiralty and the Air Ministry; there are Civil Defence, the Dominions, the Colonies, the Foreign Office—in regard to all international repercussions—and, of course, there are the statutory economic undertakings attached to the various State Departments.

I do not know what is going on in the minds of Ministers on this point, but I imagine they may be disposed to say, "The right hon. Gentleman opposite has proved that there is such an extensive field of economic interest in the Government, and that it percolates into such a vast majority of the State Departments, that you are bound to leave the matter to the War Cabinet, to deal with it direct." That is to say, that no Minister can have such a wide field of authority as to cover so many State Departments. That is an obvious point: it occurred to me when I was preparing my speech; but I do not think that that argument would he properly and firmly based. I would, first, say that His Majesty's Government have not accepted the argument themselves, because they have not acted on the principle that economics are so big that the War Cabinet must deal with them direct and keep all the strings in their own hands; the Government have three instruments of economic co-ordination, of sorts, under the War Cabinet. But apart from the fact that the Government within limitations— I think, very imperfect limitations—have already engaged in some form of co-ordination, and have thereby admitted the essentials of the case that I am making, and that they therefore leave only the argument as to what is the appropriate form of co-ordination, it is also the case that, precisely because of the vastness, the complexity and the difficulty of all these economic matters, any Cabinet would need special and responsible guidance in this vital sphere.

I hope the Government will think again. The predictions are that our Motion will be resisted, but, even at this late stage, I hope the Government will think again. I feel certain that this will be done sooner or later in the course of the war. We had been over similar territory for years past before the war broke out. There were similar discussions in relation to Defence, to which my right hon. Friend the Leader of the Opposition, notably, made contributions. The case was argued and reargued and the then Prime Minister (Mr. Baldwin), after resisting for years, ultimately set up the Ministry for the Co-ordination of Defence. We are not satisfied with that Ministry by any means, but he did set it up. The same thing was done over Civil Defence. There such a scheme is working to a considerable extent, but over a much less complicated field than the field of economic organisation; and the Minister of Home Security discharges those functions. We were resisted also, and so were my right hon. Friend the Leader of the Liberal party and his friends, when we urged year after year that there should be a Ministry of Supply.

Mr. Boothby

Conservative Members as well.

Mr. Morrison

Quite right; there was pressure from all parts of the House. It was resisted for a long period, and finally the Ministry was given—incompletely, unfortunately; but it was given. Is the right hon. Gentleman the Prime Minister to-day going to say "No," feeling in his conscience, or his heart, or wherever he keeps those feelings—he indicates that he is keeping them in his brain, which I agree is not a bad place—that in six or 12 or 18 months he will do the thing that he is not going to do to-day? If that is so, may I suggest to him, with respect, that if he has got to the point, as I believe he has, of feeling that sooner or later he has to do this thing, why should he not make a virtue of necessity, and do it straight off? If, on the other hand, he says, "I will not do it to-day, and I never will do it; I will go down with my Government before I will do it," that I respect as a real fighting line. But I do not believe that he will do that. I believe that he will say that if and when it becomes expedient to do what the Opposition want him to do, he will do it. If that is so, I earnestly beg the Prime Minister to realise that now is the appointed hour.

Let us examine the existing machinery of administration. There was an excellent article by a correspondent in the "Times" last Saturday which I think everyone will agree faithfully describes, as far as we know, the existing economic organisation behind Ministers. We are indebted to that article. Remember what we are after. We are after not only coordination, not only the reconciliation of disputes, but direction, decision, leadership in this vast and important field. I ask the House, in the light of that, to listen to this short description. The writer points out that there is the Committee of Economic Survey. That is a committee of economists. Lord Stamp is the chairman. I am not going to say much more about Lord Stamp; my unfortunate noble friend has been discussed enough in the House as it is. He has great qualities of ability and public spirit. I do not believe he has the time, and I am not sure that mentally and psychologically he is the right man, for the job which is to be done. After all, I started from Manchester on the London Midland and Scottish Railway at 5.30 p.m. last Saturday, I was due at Euston at 9.55 that night, and I arrived at 5 the next morning. I want to know, was it Lord Stamp's duty to be looking after the Chancellor of the Exchequer and giving him advice, or was it his duty to be pulling that railway out of its exceptional difficulties? I do not know. There is a humorous aspect about this, as hon. Members realise, but there is a serious aspect. Where was the mind of Lord Stamp in that critical situation? The mind of Lord Stamp should be either on the running of his railway or on the duty of advising the Government.

Lord Stamp has the assistance of Professor Clay, an economist of reputation, and Mr. H. D. Henderson, another economist of reputation; and there is an officer, Mr. Francis Hemming, who is the Civil Service link. That is not an organisation of executive government, and of direction, decision and drive. It is an ad hoc body, which deals with problems which it takes up ad hoc or which may incidentally come to it ad hoc. It is useful, but you cannot run a war in an economic sense with an economic survey which considers economic problems which come to it ad hoc or which it happens to pick up ad hoc. I remember another body which was known as the Economic Advisory Committee. That is not the kind of thing which is required.

There is, then, the Civil Servants' Committee. Lord Stamp, again, is the chairman. This is a committee of prominent civil servants—and, given Lord Stamp, I think he is the right man to be chairman—plus the members of the Economic Survey. That cannot be a body of decision, or direction, or drive, for it is the business of civil servants to take orders, and not to give them. I admit that they have a big voice in the shaping of the orders that are given them—everybody who has been a Minister knows that; it is right in a way that that should be so—but they are not in a position to take firm decisions on questions of government and political policy; and, therefore, they can be only a consultative body. Finally there is the committee of Ministers. I understand that Lord Stamp can, and sometimes does, attend this body. The Chancellor of the Exchequer is the chairman, and Ministers attend according to the business that is being considered. That is the machine. This gentleman who wrote for the "Times," and who gave a remarkably impartial account, thought that he must have a peroration; and this is what he says. Remember he is a sympathetic writer, who certainly did not want to be troublesome. He finishes in this way. It is a very short finish; the Chancellor could not grumble about its length: The Chancellor of the Exchequer has then to bring the various proposals and recommendations, or, rather, such of them as cannot be dealt with by the committee on its own responsibility, before the War Cabinet. He adds: What happens to them there is outside the scope of this article. It must be remembered that the War Cabinet, as at present constituted, contains four members occupied with the military side of the war and only one having anything to do with the economic site, and that even he, as Chancellor of the Exchequer, is necessarily more preoccupied with financial than with economic considerations. The two are not always the same. That is a friendly observer making an objective summary of this economic organisation. The poor fellow thinks that he has to finish somehow, and it is a perfectly natural and fair finish. That is the machine, and I hope that I have explained it fairly as I think it exists. No doubt Ministers will improve the description later on, but that is how the machine seems to work.

What is all this based upon? It is based upon two doctrines of government, one that it is nice to have a sieve through which things can pass, and the other that co-ordination is always a good thing. I do not know so much about the sieve, which does not sound too attractive, but, speaking for myself, if there is one word in the English language in the administration of public affairs with which I am utterly sickened and disgusted, it is the word "co-ordination." We have three—or are there two?—co-ordinating Ministers—War, Defence, and Civil Defence, and the Chancellor. If we have many more we shall need a co-ordinator of the co-ordinators. It is not only the Conservative party which in the past has suffered from the use of this word; we have suffered from it too. Co-ordination has its uses, but it is no substitute for government, for decision, drive or direction. The machinery that Ministers have got is machinery of discussion, consultation, and mediation, and not machinery of executive government.

The Chancellor of the Exchequer is the chairman, and I agree that the Minister they have got is about as near as any to the natural position of that job as things are, unless it be the President of the Board of Trade. But it is wrong that the Chancellor of the Exchequer should be chairman. I am not going to discuss, tempting as it is, the personality of the Chancellor of the Exchequer. He is not above the battle in these things. If the Minister for Economic Warfare wants to buy mineral oil or whatever it is, the Chancellor of the Exchequer is not above the battle, because if it is x pounds or shillings per ton more than American oil obviously he has a bias. It is an economic matter as to whether it will be in the interests of the nation in the prosecution of the war that we should buy that oil. Moreover, the experiences and traditions of the Treasury, which properly are financial, are not the experiences and traditions required for this particular purpose. What is the Chancellor of the Exchequer doing? I do not believe that he is leading this Committee. I am not talking about dictating to it, but leading it. He is an outstanding man, and by virtue of his office and by his experience and training he is the man to lead his office, but I suggest that he is the conciliator, the honest broker, in this office. He is not the executive, and he has not even a clear-cut position. He listens to their arguments and, like a well-trained lawyer and an impartial man, he sometimes may say: "A fifty-fifty compromise will settle it. Think about it again, adjourn it," and so on. That is not what is wanted. Decision, drive and direction are what are needed.

The second and third organs are bodies of hard-pressed men with heavy departmental duties. I can imagine these meetings of Ministers. I went to some in my short Ministerial experience and so did some of my hon. and right hon. Friends. You come with tiredness to a committee atfer a heavy day in the Department. You read the documents, as you have done, talk about it, with civil servants around doing their best for you but not necessarily trained for the particular job of giving advice to that committee. All of you, and you know it, are wanting to get back to your own job, where you are master of ceremonies once more, when the talking is finished, so that you can get on with your own job. You cannot govern by committees of Ministers, and it cannot be done by the application of methods of this kind. Therefore, you are bound to get a compromise between rival views on the basis that some Minister has to get something out of it in order to preserve his self-respect. You need a Minister with knowledge and advice who is not necessarily concerned with making a compromise, but who can in exceptional cases go and say, "With respect, you are all wrong, every Minister is wrong, every one of these civil servants is wrong." It is the difference between the art of compromise and conciliation and the art of decision according to the actual facts given by skilled advisers and supported in the end by the Minister's own decision. I do not say that a Minister would go every time and say, "You are all wrong." He would not last long if he did that, but I am saying that if such an occasion arises he should do that. It is the difference between the Chancellor of the Exchequer functioning as compromiser and conciliator and a Minister who has to give decisions subject in the end to the War Cabinet.

The Prime Minister (Mr. Chamberlain)

He is to be subject to the War Cabinet?

Mr. Morrison

Certainly, and indeed to the Prime Minister. The right hon. Gentleman need not get worried that we are doing away with him. All that I am claiming at this moment is that the Minister must have as much right of guidance, decision and leadership as in his sphere has the Chancellor of the Exchequer, and he should be subject to the decision of the Cabinet, the Prime Minister or other superior bodies. Behind the present organisation there is no adequate staff—and consequently no adequate objective documentation—to give advice. I suggest that it is the machinery of co-ordination and not the machinery of decision.

I would like to give a number of illustrations as indicating that things are not right in the machine as to the conduct of economic policy in this war. I will just run through them. Some of these things are being put right, but they really ought never to have got wrong. There is rationing. I understand that the administrative preparations for rationing were made by 1st January, 1938. The machine was ready. Then the social pressure came. I do not believe that it was so much a question of trade pressure, as of social pressure, and rationing was prevented in spite of the energetic activities of my right hon. Friend the Member for Hillsborough (Mr. Alexander). It was not done, but was postponed. The margin of safety was lowered, and the "Times" said that we used in four months the sugar that ought to have lasted five months. Meanwhile, the Sugar Duty came and put up the price from 40 per cent. to 50 per cent. There was war insurance, the rise in commodity prices began, gas and electricity prices went up, and wages demands began. It is no good grumbling about wages demands if the cost of living is continually going up. Therefore, there was a rise in the level of costs, and the spiral was begun. Later on we had the rationing of butter and of bacon, and now there is to be a Treasury subsidy to steady prices, and so on.

Why was not a clear economic policy evolved? Why do we move step by step from mistake to wisdom, and from wisdom to mistake, and take up things as they come along? That is not the way to win a great war. We jump from one problem to another in an illogical and erratic way. In employment there is clearly something wrong when we have nearly a million and a half people unemployed, with numbers of professional and technical people in a tragic position because they have no unemployment benefit. We had statements by the Lord Privy Seal at the beginning of the war advising the country to spend and "business as usual," and later we had the Chancellor of the Exchequer saying, "Do not spend, but save." There ought not to be these confusions. We have suffered a great deal from pre-war economic policies. In regard to shipping, for example, we now find that we have not got enough, and before the war we were closing down the avenues of ship production. It was much the same with regard to iron and steel, and last week we had the story of feeding-stuffs which indicates that things have not been right in that direction since the war. There is the same slowness in decision which is not necessarily the fault of individual Ministers but is, I suggest, the fault of the machinery itself. Such machinery is hound to be slow in operation with all these stages of preparation.

We suggest the appointment of a Minister of War Economy who should have a seat in the War Cabinet. He should have, not necessarily a large, but a high-powered. skilled and expert staff, and he should deal with such matters as those which I have indicated in the course of this speech. There should he, as I have said, direct, swift and autonomous admin- istration by the Departments of all purely departmental matters and of all other matters in pursuance of settled Government policy. Matters requiring more general consideration should be referred to the Minister of War Economy, who should give decisions, after inter-departmental consultation where necessary, and without it where it is not. The Minister of War Economy should have power to call for any matter to be submitted to Kan, and in big cases, in matters of high policy, clearly Cabinet decision should be taken, but he ought to go to the Cabinet with his recommendations as to what ought to be done. A body of policy should be built up so that the Departments could go on with their administration and new problems also could be considered in their stride and considered upon their merits.

When this war is ended we shall all he faced with very grave economic problems. Such a Minister ought to have these problems in mind in the course of his work. It is right and proper that his mind should be mainly concerned with the prosecution of the war to-day, but it is also right that his mind should be considering the relationship of what he is doing to-day with the economic problems which will affect the country at tie end of the war. The matter with which we are dealing is not one of party politics. I think that the House will agree that I have not dealt with it in a party spirit, but that I have tried to deal with it as a matter of good government and public administration, without rancour, and without personal attack or even party attack.

I ask, therefore, that in discussing this matter we should all try to avoid scoring mere debating points. We must win this war as quickly as we can, and win it we must. Moreover, there are moral repercussions to good and efficient government. People feel happier when they know the Government is working with precision, speed and exactitude. People are worried and public morale is likely to weaken if they feel that things are not moving with speed and precision. We believe that the proposal we are making to-day will be for the good of the country, and the administration, in the prosecution of the war, and I trust it will be given fair and complete consideration by the Members of this House and His Majesty's Ministers.

4.47 P.m.

Sir Archibald Sinclair

I rise, not in any spirit of party pugnacity, but from independent conviction, to support the Motion which has been moved with so much eloquence and force by the right hon. Gentleman the Member for South Hackney (Mr. H. Morrison). It is because he has dealt so widely and comprehensively with the whole field of debate, and because I know there are a great many other hon. Members who want to take part in the discussion, that I want to come straight to the vital point in this controversy—the necessity for an enormous expansion in our export trade. I see in the newspapers, which are often wrong and, I hope, wrong in this case, that the Prime Minister is going to ask the House to reject this Motion and that he is going to rely very largely on statistics for the export trade during November and December, that is, going to compare them with previous months and years. I will not bandy figures with the right hon. Gentleman, because we all know how figures can be employed in Debates of this kind, but let me say that I hope he is not going to use those comparisons which the present Secretary of State for War used so often when he was President of the Board of Trade—I mean comparisons with 1914. I say, not for the first time, that comparisons of that kind are not only irrelevant but poisonous, because they are intended as an opiate to induce complacency. Complacency is a comparatively harmless, if sometimes rather irritating, foible when we are discussing our domestic problems in time of peace, but there is no room for complacency when we are fighting for our lives against so formidable an enemy as Germany. To discuss whether there is a percentage improvement in figures, to match statistics of one year or one month against another year or another month, is to discuss the subject on a plane appropriate to peacetime but not to war conditions. It is not a question of nice calculations or comparisons.

But if we are going to have comparisons with 1914, let them be complete. The only comparison which really matters is that between not only the export figures of recent months and similar months in 1914, but between the necessities of 1914 as compared with the necessities of 1940. The Budget of 1914–15 provided for an expenditure of £217,000,000 a year, or £570,000 a day. From August, 1914, to March, 1915, the extra cost of the war was 362 millions of pounds sterling, or £1,500,000 per day. Thus the drain on the national resources at the corresponding period of the 1914 war to the present period of this war, was £2,000,000 per day, as compared with a figure of £7,000,000 a day now, and I do not think the Chancellor of the Exchequer will challenge that figure—a figure which is still mounting. Consider, on the other hand, our relatively much smaller foreign investments as compared with then; our National Debt more than 10 times the size it was then; the enormously higher level of taxation with which we are entering the war; and our inability to raise loans in the United States of America. When you have taken all these factors into account, you have the outline of a picture which brings home the fact that although the present volume of exports is no doubt much greater than in 1914, it is quite inadequate to our present needs.

Now, therefore, my hon. Friends and I think—and I know that many other hon. Members in all parts of the House agree with us—that unless this problem of not merely maintaining, but increasing, our export trade is dealt with promptly, we shall not be able to develop and sustain our war effort. The main object of our export trade policy should, therefore, be to go out and scoop in all the German trade we can. I know that many conflicting considerations have, of course, to be reconciled. Distance of markets and the drain on shipping, the need for gold and dollar exchange, the advantage of buying and selling in such a way as to cripple German trade or to make its terms as disadvantageous as possible to Germany in the countries adjacent to her, which our blockade cannot reach—all these conflicting considerations have to be taken into account. But the overriding consideration, and the intention with which our policy should be framed, is that we should push our exports by every means in our power, in ruthless competition with all comers, subject only to the duty of treating the interests of our Allies as though they were our own.

For that purpose if, for example, export orders for engineering equipment are to be executed here, the output of the industry must be scientifically surveyed and allocated as between munitions and export work. It is all wrong that famous textile machinery makers should be entirely engaged on munitions production, as many of them are at the present time, while textile firms are trying to get import licences to buy looms from America. Then high priority must be given in the provision of raw materials to manufactures for the export trade. The Government plume themselves on the efficiency of their machinery for allocating priority, but large numbers of complaints continue to reach me about the absence of any controlling authority to decide the allocation of material among the Services and industrial claimants. Unorthodox methods must be employed to help manufacturers and traders to overcome the immense obstacles which exist in wartime to the expansion of our export trade. Trade missions should be despatched to foreign countries. Merchants should be organised in consultation with chambers of commerce. The usefulness of differential exchanges in existing conditions has been proved, and this method of encouraging the export trade should be more extensively applied. Nor must we refrain from employing subsidies where the responsible Minister is satisfied that an export order is in the national interest.

Moreover, I have complained before in this series of Debates on war economy about the Government's policy in appointing as controllers in the Ministry of Supply men with personal interests in the industry which they control and men who are strongly committed to lines of policy which may be right or wrong in peace time—I am not arguing teat this afternoon—but are clearly undesirable in war. An example of this is the difficulty with which manufacturers of the most highly finished products of the iron and steel industry are experiencing in obtaining those semi-manufactured iron and steel goods which are the raw material of their industry. I know a firm of wire manufacturers who in peace time maintained their independence of the Iron and Steel Federation. On the outbreak of war they had sufficient stocks of raw material for five to seven months' consumption and contracts booked for adequate supplies of raw material all through 1940. They placed all their resources at the disposal of the iron and steel controller, who is now the President of the Board of Trade. Now their stocks are practically exhausted, they cannot now arrange for their own supplies, and, to give the House their own words, "The control are letting the whole trade down by acquiescing in, and accepting the basis of, a declining and inadequate supply" of raw materials. Tie home trade, they say, is good and the export trade they describe as almost unlimited. Why could not the billets and iron rods which they require be obtained from Belgium or Luxembourg in exchange for our coal? If the Government say that the difficulty is one of shipping why cannot our ships which take troops and supplies to France bring back these things from Belgium and Luxembourg? Is the fact that the control is composed of men whose main object in the last few years has been to cut down imports of steel to this country a reason for the failure to obtain the raw material required by this firm for a flourishing export trade?

Let nobody underestimate the enormous obstacles in the way of expanding our export trade—it needs immense drive and power thrusting out from the centre of Government to sweep those obstacles away. Yet nobody feels the throb and rhythm of a powerful driving force operating from Whitehall or Downing Street in the economic field. The War Cabinet is too cumbersome; it should be cut down in numbers, and in it there should be a man who directly represents, and whose duty it is to represent, the interests of the economic life of this country; and we must develop such driving force if we are going to pay for and win this war. This feeling that we are not making the best use of our resources has been enormously increased everywhere by the fact that we are not absorbing the unemployed people of this country. We still have these large figures of registered unemployed men and women, not only those who are registered with the Employment Exchanges, but I certainly, and I imagine the immense majority of hon. Members, know of very large numbers of highly skilled men and women who a:-e utterly unable to find any Government Department or any Minister who is apparently at all anxious to use the services which they are ready to place at their disposal.

Now who is to organise and direct this policy? I understand that the Prime Minister is going to answer that it should be the Chancellor of the Exchequer, as it is now, in so far as it is being done at all. In another place it was argued last week, on behalf of the Government, that the Chancellor of the Exchequer was the right man to co-ordinate economic policy and to impart this drive and thrust to it, because he is the Minister who is in touch with all the economic Departments. But equally he is in touch with all the home Departments, and so he should be the Minister to co-ordinate the home Departments. He is in touch with all the Defence Departments, and so he ought to be the co-ordinator of all the Defence Departments. Indeed, he ought to be in the Cabinet the dictator, under the Prime Minister, if that argument is sound, and the relations between him and the Prime Minister should be like those between the Duce and the Throne in Italy.

But I do not believe that view to be at all sound. I believe that these functions which the Chancellor of the Exchequer discharges in relation to all these other Departments—to the home Departments and the Defence Departments—are just as vital as those which he discharges in relation to the economic Departments. I believe that he has a vital function to discharge—the function of the brake. When I used this argument a few months ago the Chancellor looked quite pained. He seemed to think that I had almost insulted him. He assured me that he was much more than a brake. But a brake has a vitally important function to perform in the government of a country. I am not sure that the Chancellor is performing it to-day. He ought to be saying, "No" to the heads of the Departments. I am not quite sure that he says "No" sufficiently often—that he makes it sufficiently difficult sometimes for them to get their way. That is a vital function which he has to perform. It seems to me that the Prime Minister, in making him in addition the co-ordinator of economic policy, is allotting to him conflicting and inconsistent duties. Indeed, I am aware of a growing opinion that the Chancellor of the Exchequer, and let me add especially the Permament Secretary to the Treasury, should be confined more strictly than they now are to the discharge of the duties appropriate to their offices.

For the sake of brevity, I have refrained from entering into subjects such as wages and prices, rationing, saving, and many others which must come within the scope of a comprehensive economic policy. I have dealt mainly with exports, because that is the most important subject, and the one in regard to which the Government seems most inclined to relapse, and in regard to which it is most dangerous to relapse, into an attitude of complacency, and the one in regard to which there is the greatest need of drive and thrust. I feel I must, however, offer my condolences to the hon. Members for Kidderminster (Sir J. Wardlaw-Milne), Walsall (Sir G. Schuster) and Hastings (Mr. Hely-Hutchinson) in the embarrassment with which I feel they must be contemplating their task of moving the Amendment on the Paper. I am sure that the embarrassment will be generally understood and will earn for them the sympathy of Members in all parts of the House. I find it hard to understand what can have impelled them to accept so invidious a task as to invite Parliament to refrain from making a constructive contribution towards winning the war on the economic front, and the task of asking Parliament complacently to note the improvement in the export trade, just as month after month during the years which the locusts have eaten we were asked to note the improvement in the production of armaments and to vote down Motions for the establishment of a Ministry of Supply.

Complacency oozes from every line of the Amendment, which goes on to invite Parliament to rely upon the Government to take any steps which may from time to time be required to strengthen still further—so it is not quite strong enough yet—the economic position of the country. These hon. Members know as well as the right hon. Gentleman who has just spoken that the proposal embodied in the Motion is bound to be adopted by the Government sooner or later. I remember when the establishment of the Ministry of Supply was being discussed in another place a Minister was asked, "In wartime will you not have to have a Ministry of Supply? When will you establish it?" He answered, "Sooner or later, perhaps." That, no doubt, is the answer, though perhaps in other words, which the Government will give to this demand. Would it not be better to take the big step now of appointing a Minister with adequate power to give direction and drive to our war economic policy? Why wait? Now that we are not only at war but are approaching the end of the winter, now that it is reasonable to suppose that the War Cabinet and its administrative machine may in a few weeks' time be under the heaviest and most concentrated strain that any British Government have ever had to stand—why wait till then for action to strengthen the economic position? Why not take advantage of the pause in the fighting to do it now?

This is no party question and, in any event, with the war on and a party truce in operation, there is no longer any incentive to, or attraction in, party politics; and I say that the very benches of this House, the leading articles and correspondence columns of the newspapers, even those most friendly to the Government, and individuals and organisations which are trying to carry on the export trade of the country are crying out against the complacency and the lack of energy and drive which have so far characterised the Government's conduct of the war in the economic field. Already I fancy the tide of opinion is too strong to make headway against, even for such powerful swimmers as the hon. Gentlemen who have so dutifully attached their names to this Amendment, which has obviously been drafted in the office of the Patronage Secretary.

The right hon. Gentleman the Prime Minister made an important speech yesterday. In the course of it he observed that an impression seemed to be abroad that the Government were making very little effort to win the war and, indeed, had very few ideas on the subject except what were supplied by the ceaseless vigilance of the Opposition and the unfailing ingenuity of patriotic journalists. My sense of fairness would not allow me to state the proposition in such extreme terms, but, all the same, there is a good deal of truth in it. When I think of the pressure from all sides of the House for a great Air Force, which culminated in the Debates of 1938 and the fall of the then Secretary of State, when I think of the Ministry of Supply, and when I remem- ber that even the present arrangements for economic co-ordination were only made after weeks of agitation in Parliament and in the newspapers a few days before 18th October, on which the Debate on war economy was due to take place, and only this week when this Debate was arranged we have had an announcement, which has given us all a great deal of pleasure, that commercial shipbuilding is going to be taken over by the Admiralty and is going to be carried on with the drive of the First Lord of the Admiralty behind it—when I think of all these things, I cannot help thinking that there has been at any rate a substantial measure of useful and effective co-operation between Parliament, the Government, and the Press. It would be a notable event in Parliamentary history, and a milestone, I believe, on the path to victory, if the Government would even now refrain from dividing the House on the Amendment and allow the Motion a unanimous passage in its original form.

5.13 p.m.

The Prime Minister

Like the right hon. Gentlemen opposite, I am rather glad that we have an opportunity to-day to discuss the Motion which has been put down by the party opposite and which does raise the general question of the machinery of government in so far as it affects the economic side of our war effort. The subject is one which has been largely discussed and debated outside the House as well as inside and a great number of people have expressed their opinions in speech and in leaders in the newspapers and in letters to the daily Press. That has encouraged the two right hon. Gentlemen who have spoken to treat the subject in a broad spirit. It is not necessary to confine it to partisan presentation because they feel that they have a sufficient measure of agreement to put it on a broader and a higher plane. I should like to pay my tribute to the right hon. Gentleman opposite, who for once cramped his style so far as to refrain from either personalities or definitely party attacks. In view of that self-restraint on his part, I am sorry that I cannot on this occasion accept his invitation to do what he suggests I know in my heart I shall have to do at some time or other. Both the right hon. Gentlemen have ascribed to the Gov- ernment a certain complacency, but I do not think our complacency is at all comparable with that of the right hon. Gentlemen, who always take credit to themselves and their respective parties for any measures taken by the Government which can, by a certain amount of stretching, be considered to represent something which they advocated in different circumstances and at a different time.

Let me take as an illustration the question of the Ministry of Supply, which is so often brought forward as an illustration of how the obstinacy of the Government has broken down before the repeated attacks of the Opposition. No hon. Member opposite ever cares to remind the House of the circumstances in which the existing Ministry of Supply was decided upon. When it was first asked for, I remember that the answer from this side of the House was that it was of no use setting up a Ministry of Supply unless there were compulsory powers, and that we did not think the time had come when we ought to put the country to the inconvenience and loss and the loss of trade which would have been involved if we had set up a Ministry of Supply with compulsory powers. Later on, as the international situation was evidently deteriorating, we made our plans for the setting up of a Ministry of Supply for the Army and for certain other commodities required by other Departments on the outbreak of war. But the actual occasion which determined our action in setting up the existing Ministry of Supply was, hon. Members will remember, the doubling of the Territorial Army. That was a complete change in the conditions which made necessary, in our view, what had not been necessary before. When the conditions changed, then we changed our plans, and we set up, not the Ministry of Supply which had been called for by the Opposition, but the Ministry of Supply which we thought was necessary in the conditions which we then had to face. This is merely a historical reminder of what took place in connection with the Ministry of Supply, and I recall it now only to repudiate the suggestion that the Government were converted by the repeated demands on the part of the Opposition to a course which they voluntarily took themselves in order to meet changed conditions.

Let me now return to the question of a proposed Minister who is described under various titles, but who has been described by the right hon. Member for South Hackney (Mr. H. Morrison) as a Minister of War Economy. I do not think anybody who has followed the discussion in public will have failed to notice that, although there is a gathering together under, so to speak, a common flag, yet the objects of those who have made the demand, and indeed, the nature of the demand itself, have been very various indeed; in fact, hardly any two people have, it seems to me, wanted exactly the same thing or wanted it for exactly the same purpose, and that was illustrated by the two speeches to which we have listened this afternoon, which gave an entirely different account of the Minister of War Economy which the two right hon. Gentlemen want to have. I have noticed that in these matters of public discussion, when a flag of this kind is raised which appears to have a certain amount of support behind it, all those who have any grievance or any favourite plans which they want to advocate, hoist the same flag in order to have the benefit of that flag; but as I say, that does not really alter the fact that they want to get different things for different purposes. Many of those who ask for a new Economic Minister have not asked for him on the ground that they could not get a decision or that there was delay in getting a decision. They are dissatisfied with the decision which has been given, and they hope that perhaps if they got a different Minister they might get a different decision. That is hardly a case for a Minister of War Economy. There are some who take a wider view. There is the view of those who say, "You have a great number of Departments which are concerned with the economic aspects of the war. There is nobody to coordinate them. You have a Minister for the Co-ordination of Defence; why should you not also have a Minister to coordinate the economic front?" That is not a view which commends itself to the right hon. Member for South Hackney, for he said that the word "co-ordination" makes him sick and disgusted.

Mr. H. Morrison

Does it not make you sick?

The Prime Minister

It all depends on who uses it—and that perhaps is also the view of the right hon. Gentleman. Of course, a Minister who was merely the co-ordinator of the various Departments concerned with the economic aspects of the war would not necessarily be a Member of the War Cabinet. His function would be to focus the slightly different views which might be held by these different Departments and to fortify the case of the economic front against the front presented by other Departments of State. That is one view. There is then another view which would go further and which would not only co-ordinate the economic Departments, but would coordinate the Treasury as well, and put this new Minister over the head of the Chancellor of the Exchequer. That is a much wider aspect, and it raises the interesting speculation as to who would answer questions in this House if there were two Ministers of that kind side by side. Moreover, suppose that there was dissatisfaction with any decision that had been taken, would the questions as to the reasons for the decision be put to the new Minister or would they be put to the Chancellor of the Exchequer? After all, the Chancellor must be responsible to the House for financial decisions and for decisions affecting the work of his Department, and if this new Minister were to override him, I foresee that a difficult position would arise in the House when questions came to be put.

There is then a wider suggestion still—the suggestion made by the right hon. Member for South Hackney. Although he tried to reassure me by suggesting across the Floor of the House that he did not want in any way to attack my position, yet it seems to me that the existence of a Minister who was a dictator over all those Departments which he described to us with such accuracy and so exhaustively, would challenge the position of the Prime Minister, because I do not quite see what the Prime Minister would have to do by the time this gentleman had given his orders to all the Departments, including the Chancellor of the Exchequer, the Minister of Labour, the Minister of Transport, the Minister of Agriculture, and I think the Ministers of the Service Departments as well.

Mr. MacLaren

That would be a grand job for Winston.

The Prime Minister

The hon. Member has introduced personalities. I agree at any rate that you cannot exclude the question of personalities in considering these matters, and I may perhaps have something more to say about that later on. There is still one further complication which is introduced into discussions upon this subject and which was touched upon by the right hon. Baronet the Member for Caithness and Sutherland (Sir A. Sinclair); that is, the composition of the War Cabinet. Here you have two different sets of critics—or sometimes even the same critic—who say that the War Cabinet ought to be cut down and also say that it ought to be strengthened by the addition of further Ministers. All this is very confusing to me. I find it extremely difficult to disentangle these various aspects of the case one from another, but I will attempt to make an analysis of the situation, although before doing so there are one or two general observations I would like to make. It is at any rate common to all these various forms that none of them are asking for a new Department; in fact, I think it is the essential feature of the proposal, however vague it may be, that the new Minister is not to be a departmental Minister.

Mr. H. Morrison

I am not clear whether the Prime Minister has misunderstood me, or whether I am misunderstanding him, but I conceive that this new Minister would have a Department behind him—the Ministry of War Economy, with an adequate and highly expert staff, and although not necessarily a vast staff, a staff not as insignificant, for example, as that which I imagine exists with the Minister for the Co-ordination of Defence. Therefore, the new Minister would have a Department. May I also point out to the Prime Minister that I do not for one moment suggest that this Minister should be a dictator over all the functions of the Economic Departments of the Government. On the contrary, I said that it is highly probable that nine-tenths of the work of those Departments would go on as it is to-day, but that such a Minister must have power over the remaining one-tenth which would be of common economic concern in the prosecution of the war.

The Prime Minister

It appears to me that the difference is one of words. What I meant by a Department was an administrative Department. I understand this gentleman's functions would not be administrative. His function would be to say to the heads of the administrative Departments, "Do this," and it would be done, or "Do not do this," and it would not be done. He would be a super-Minister, a Minister over the Ministers who now have charge of the administrative Departments. He would, then, be a co-ordinator—if the right hon. Gentleman will forgive me—and an arbiter; I will not say a dictator, but he would be an arbiter. If there were a difference between those Departments, he would decide it. I understand that in the contemplation of the right hon. Gentleman opposite, such a Minister would probably take the view that all the Departments were wrong, and that, according to the illustration which the right hon. Gentleman gave, he would just have to say to them, "All you gentlemen are wrong, all you officials are wrong and I, alone, am right, and as I have supreme power, you will do what I say and carry out my orders." This is what the right hon. Gentleman calls imparting decision, direction and drive—three "D's." I think there would be a fourth "D" probably before very long.

Before I examine more closely what a Minister of this kind might do I want to utter a warning and I am sure that the right hon. Gentleman will not disagree with me because it is very much what he himself said. The warning is that unless the assumptions on which you base the demand for such a Minister—that he will eliminate delay, that he will accelerate the work of the Departments, that he will bring about quicker and better decisions—unless those assumptions are justified, the introduction of this new high-powered Minister, with a high-powered staff, may do a great deal more harm than good. While I have been listening to the chorus of cries for the appointment of this very remarkable man, who is gifted with qualities such as I have not yet met with in any one individual, I also hear undertones which grumble that there is already a tendency to over-elaborate the hierarchy. I must point out that if this super-Minister is given authority over other Ministers, there must be a tendency—I am not at the moment saying whether this is not out-weighed by the advantages —to weaken the authority of the Departmental Minister.

The right hon. Gentleman said, and I entirely agree with him, that we should try as far as possible to leave the departmental Minister with the responsibility for his own Department. But if it is known that he is always subject to the authority of some higher Minister, that sense of responsibility, not only in the Minister but also in his staff—which is very important—is weakened and, inevitably, you get a tendency to say, "Well, this plan may not be the best plan, but we shall not have the final decision, so let us put it up and perhaps he will take it after all." That is not a course of procedure which is calculated to bring about the best administration which you can have with a Minister who feels that he has got to take the responsibility for his own decision and that he will have to answer for it if his decision turns out to be wrong. Another thing one has to consider particularly in time of war is this. It is inevitable as the right hon. Gentleman again pointed out—and he has had very considerable experience of administration and speaks with authority upon it—that there should be differences of view between different Departments. That is not a matter which reflects any discredit upon them because one, naturally, sees first and best that which is closest to one, but what you want to avoid as much as possible is friction between Departments and friction between Ministers or between officials. Every time you introduce a new cog into the machinery, you are increasing the risk of friction.

Suppose a Minister has come to a certain conclusion and he is over-ridden by this superior Minister or arbiter. Suppose something goes wrong in consequence of that decision. The arbiter will say that it was not carried out properly. The Minister will say, "I knew it was wrong policy from the beginning. I did my best but it was impossible ever to carry it out satisfactorily." I give these illustrations as things against which you must guard. They are things to be taken into consideration. They are not, alone, the considerations which must be taken into account, when you are considering whether you have the best kind of machinery, but do not let us lose sight of them altogether. Unless the case is overwhelming for the introduction of a new non-departmental Minister, with authority over other Ministers, it is very rash to add new layers of Ministers and of officials to those which already exist. The dangers are very considerable.

I wonder what the new Minister is to do which is not already done by the machine now in existence. The right hon. Gentleman said that his Minister, who is the highest form of Minister of whom I have heard as yet—I mean the one with the greatest powers—would be expected to ascertain from all the various Departments what their views were before decisions were taken. Indeed, if he did not do that, he would be certain to make the most serious mistakes. But if he has to do that, is he, then, to supersede the machinery which now goes on of conversation between the Departments, of attempts to adjust differing points of view and to provide, where it can be provided, the best compromise where it is not possible for every one to have his own view? I do not think he would supersede that machinery, and if he does not supersede it, then, it seems to me, he would be a superfluity, because there is machinery for dealing with all those difficult problems which arise out of the differing points of view of different Departments.

Let us take the machinery of which the right hon. Gentleman made so much fun. He spoke, I thought, in rather derogatory terms of the Committee of Economists and made a number of assumptions which were not correct as to the way in which they do their business. They do not have to wait until something is given to them. It is their business to survey the whole economic field and to advise the body to which they report on any gap they may find to exist, on any deficiency, on any fault, on any direction in which further steps should be taken in order to strengthen the economic front. Surely the right hon. Gentleman is not going to say that that is useless work. He says it is not decision. Of course it is not, but it is the material upon which decisions have to be based. Unless you have some research into these problems by competent people, how is anybody to take wise decisions upon them? Surely that must be the basis of any policy which is ultimately to be decided upon by the War Cabinet.

Then the right hon. Gentleman painted what is really a very fanciful picture of what was likely to he the attitude of the Chancellor of the Exchequer. It was interesting and significant that the right hon. Gentleman postulated a Chancellor of the Exchequer whose tendency was to say "No" to everything, while the right hon. Gentleman the Member for Caithness and Sutherland (Sir A. Sinclair) said he was afraid the Chancellor of the Exchequer did not say "No" often enough. You cannot have it both ways and it is possible that my right hon. Friend the Chancellor of the Exchequer represents the happy mean between the right hon. Gentleman below the Gangway and the right hon. Gentleman above it. The fact is, of course, that there are two things which the Chancellor of the Exchequer has always before him in times like these. One is the danger of inflation and the other is the danger of the exhaustion of our reserves of foreign exchange. Those are two matters which must constantly come up in the consideration of problems arising from day to day in these various Departments and it is not possible to imagine that any Minister other than the Chancellor of the Exchequer, can have the right, or indeed the knowledge, to make his contribution to the discussions, and point out to other Ministers what the dangers may be in either of those two relations.

Then comes the question of what I may call the competition between Departments in time of war for the various things necessary to enable the activities in which they are respectively interested to function. You have the Service Departments; you have the demands of Civil Defence; you have the demands of industry, either for the export trade or for the service of civilians at home. All of them want raw materials. They want man-power; they want productive capacity; many of them want machine tools and, in other respects, they are in competition. But the principle of dealing with the problems which arise out of this competition is the same in all cases, and I wonder whether hon. Members really have before them the way in which these problems are solved to-day, or rather I should say from day to day.

Let us take the case of raw materials. If I take one case, it really illustrates the whole range. When it appears likely that a raw material is going to be in short supply, the first thing that is done is that the Raw Materials Department of the Ministry of Supply informs the Central Priority Department of this possibility. Then it is for the Central Priority Committee to act. It has a sub-committee which is immediately called and the representatives of all the Departments concerned are asked to submit the returns of their requirements in proper categories. Then the controller concerned—and may I say in passing that the idea that you cannot have a controller who is interested in a trade, seems to leave out of account the fact that it is just those who have been in a trade who are most fitted to be controllers, because of their knowledge of the trade—asks for a return of the stocks of this raw material. When these returns are received they are set out so that the whole position can be analysed and the requirements of the Departments compared. Then you get a meeting of the committee, and the chairman inquires into the supply side. That is generally the first thing he does, and with the help of other members of the committee he tries to find out whether there is any way in which the supplies can be improved. The Minister of Shipping may be asked to supply more shipping space for the commodity in question, and sometimes instructions have to be given to the controller to try and make purchases in a country with a shorter sea haul.

Sometimes it is necessary to see whether it is not possible to increase the home capacity for production. The maximum amount available for the period under review, which in most cases is a year, is ascertained in that way. Having got the maximum amount available, and having received already the requirements of the various Departments, you have only to make a simple subtraction sum to find out how much we are short. Having found that out, the next step is to investigate the requirement of each Department, item by item. Generally speaking, the requirements of the Service Departments, including the Army supply side of the Supply Ministry, the Home Office, the Office of Works, and the Electricity Commissioners, represent the raw material component of the goods which they, as Departments, are going to buy. The other Departments put forward the requirements for the concerns for which they are responsible. The Board of Trade may put forward estimates necessary for maintaining or increasing the export trade of the country, and the Minister of Transport looks after internal transport services, railways, buses, and road haulage, while the Ministry of Shipping vouches for the supplies required for the shipbuilding yards. The Minister of Mines sees that the coal mines and petroleum companies obtain the supplies necessary, to maintain and, if possible, increase their production.

Every Department of Government is now represented on the Committee, including the Treasury and the Foreign Office. The Treasury is represented mostly to ensure that the foreign exchange position is not lost sight of, and the Foreign Office is there to watch and see that treaties with neutral countries are not infringed. After that, if there is a deficiency in the raw material, somebody has to go short. The next Question for the Committee to discuss and decide is who is to go short. They then ask a number of questions round the table, such as, "Why must you use this material? Cannot you use a substitute, instead?" Very often it is found, if there is a shortage, that it is possible to find a substitute, and the material is therefore released to any Department whose need is the greatest. It is at the end of perhaps one or two meetings, held to discuss the same subject, that it is found that the requirements and probable supplies have balanced one with another and a definite amount allocated to each Department according to its need. The Control knows it must not provide any more of that commodity to a Department than the amount which has been allocated.

We must, of course, see that those who are fighting our battles, whether on the sea, on the land, or in the air, are properly provided with their equipment. Everybody will agree with that. Everybody agrees also with the need for maintaining and increasing our export trade, and no one is more interested in that than the Chancellor of the Exchequer himself, for the reasons I have already given, namely, that it is only by increasing the export trade that we can increase our reserves of foreign exchange. Therefore, it is in the supplies for home purposes that we have generally to make the greatest cuts. It is because these cuts are being made that articles are now being found to be short in the shops, and the civilian population are being asked to do without a great many things to which they have been accustomed.

That is a brief review of the way in which priorities are settled, from day to day, in our raw materials, and the same procedure goes on in regard to the other things I have mentioned. In that way we do not have to bring these subjects before the War Cabinet, and the Chancellor of the Exchequer himself, for the most part does not have to bring them up to the War Cabinet; they are settled by the machine before it comes to the War Cabinet. I understand that that is the very thing the right hon. Gentleman wants to have done. How can you improve that by putting in another Minister? I am totally unable to see how the addition of an extra Minister is going to get over any of the procedure I have described to the House, or how he is going to expedite decisions which are now being taken smoothly and effectively every day of the week.

Let me turn to the special case of the export trade to which the right hon. Gentleman the Member for Caithness and Sutherland devoted himself. It seems to be thought by him, and by others, I believe, that the Government do not sufficiently appreciate the importance of the export trade and that there is no machinery for focussing its requirements. I suppose the idea is that its needs are so various and so unco-ordinated that they do not have proper attention. There is this to be said. In the case of the Service Departments, they, of course, draw up a programme for a considerable period ahead. If the programme is sanctioned, then, naturally, there follow the requirements of the Services for all the things needed to carry out that programme. It is a much more complicated business to get a programme for the export trade as a whole. We really require a programme for every branch of industry engaged in export before we can have a programme comparable with the simple programme of the Service Departments. When the war broke out we had, of necessity, to concentrate upon certain very urgent matters which concerned ourselves—supplies of materials, supplies of food, restrictions on imports, and establishment of control. Naturally, these things did interfere a good deal, and put obstacles in the way of trade, although, I may say, one result of the controls that were introduced was that the country was able to purchase very large quantities of commodities which would, if they had not been purchased then, have had to be purchased to-day if, indeed, they could have been purchased, at a much higher price.

That is what I may call the first phase of the war. Inevitably, it meant a certain amount of dislocation, but we always recognised that as soon as we could get through that first phase of dislocation it would be necessary to make adjustment, as soon as possible, in order to free our trade, and in particular the export trade, from obstacles. We have now arrived at the second phase. We have to make investigations into the needs of the export trade, and if the right hon. Gentleman will forgive me for saying so, the co-ordination of those needs which are necessary in order that we may construct an export trade programme and be sure that we are making, in good time, provision in order that this programme may be carried out. I put it to the House that we do not want a new Minister to do that. That work is the natural and proper function of the Board of Trade, which is in touch closely with the industries and knows the personalities.

Miss Wilkinson

But that Minister is not it the War Cabinet.

The Prime Minister

I will come, if I may, to that point presently. I say it is the proper function of the Board of Trade to investigate the needs of the export trade, to put them together and make a programme. I say they are qualified, and no one else can be qualified, by reason of their constant touch with leaders of industry in all directions. They know exactly where to go when they want information. They are consulting the other Departments concerned, the Treasury, the Foreign Office, the Ministry of Economic Warfare, as occasion requires, and they have at their hand the Department of Overseas Trade.

I have already indicated the requirement; of the export trade under various headings—raw materials, man-power, productive capacity and so forth; of course, the people who are engaged in export trade must indicate to the Board of Trade the market to which they want to export and.what is the programme they wish to carry out in a given time. They have, in fact, to stake out their claims, and they want to be assured that, having staked out their claims, they will not be upset by the intervention of some other Department which may requisition something which they thought they had secured. That is a task for the Board of Trade. It is a heavy task, but my right hon. Friend the President of the Board of Trade, who, I hope, before long will be able to speak for himself in this House, is eminently qualified by his experience to carry out that task. I think it is obvious that to carry it out effectively will mean, not less intervention, but more intervention, in future, on the part of the Government. That intervention will be more efficacious and more correctly directed if it is carried out with the assistance of business men of experience and ability who can give their time to this organisation with just the same sense of responsibility as they would have in regard to their own business.

Accordingly, my right hon. Friend is now engaged in setting up an Export Council, consisting of a number of leading business men, some of whom are prepared to give their full-time services voluntarily to the executive work of organising our export efforts in detail. The Council will also include leading members of the trade union movement, and, in addition, Lord Stamp, the right hon. Gentleman will be glad to hear, will be a member of the Council. There will be senior representatives of the Treasury, and the Ministry of Supply, and the Minister of Economic Warfare will also he represented on the Council in view of the difficulties which sometimes arise for British exporters from measures taken in economic warfare. The Foreign Office will be represented when there is any question which affects that Department.

Sir A. Sinclair

How many will there be altogether?

The Prime Minister

I cannot say; they may not all be there always. All these business men and trade-union leaders who are so patriotically giving their services are not experts on every aspect of the export trade. Some of them know about one branch of it and some of them know about another. We do not expect, therefore, that all of them will he present all the time. The Council will have at its disposal the Department of Overseas Trade and the Industrial Supplies De- partment of the Board of Trade, which was established by my right hon. Friend the present Secretary of State for War. The primary function of the Industrial Supplies Department is to see that due account is taken of the demands of civilian industry, particularly for the export trade, and to make available supplies of material for the export trade in preference to civilian demands at home. This Department represents the Board of Trade on the Central Priority Sub-Committees, and it collaborates closely with the Raw Materials Division of the Ministry of Supply. It has already been able to get going schemes for promoting the export trade in various industries. Notable examples are linens, woollens, and motor cars, where existing trade organisations or controls have been utilised as the central executive organisation.

It has been ascertained that this new Council will have the active assistance, approval and support of industry generally. My right hon. Friend the President of the Board of Trade will preside over the Council, and he will, of course, continue to be a member of the Economic Policy Committee, which is presided over by the Chancellor of the Exchequer. I think that we may look forward to a very considerable concerted drive in order to take the fullest advantage of the opportunities for the development of the export trade which are open to us. I may mention once again, what has already been said to the House by my right hon. Friend who is responsible for the Department of Overseas Trade that we do not require to go and search for export trade to-day. It is the export trade which is on our doorstep asking for goods with which we have difficulty in supplying them. What we have to do is to try and provide whatever is necessary to enable us to meet the demands which are being made upon us from many quarters, and particularly from quarters which formerly did trade with Germany.

The right hon. Gentleman the Member for Caithness and Sutherland endeavoured, I think, to discount in advance anything I might say about the figures of export trade. He was wrong in saying that I was going to base my case on any figures I could give, but I must say that, if it had been the case that the monthly figures for our exports were continuing to fall instead of continuing to rise, the right hon. Gentleman would have been a good deal more ready to bandy them with me than he showed himself to be. It is remarkable that the figures for December show an increase over the corresponding figures for December last year, but perhaps they conceal the fact that the figures for last year included the export trade to Germany, which, of course, does not exist in the figures this year. But for that, the difference would have been a good deal greater than that shown by the actual figures.

Sir Granville Gibson

Could the Prime Minister give the names of the business men on the Council?

The Prime Minister

I cannot do that to-day. The hon. Member for Jarrow (Miss Wilkinson) objected that the President of the Board of Trade—although I did not gather she challenged my contention that the Board of Trade was the right Department to deal with the export trade—was not a member of the War Cabinet. That is another instance of the wish to enlarge the War Cabinet, but I do not think she has appreciated that when questions affecting a Department are discussed at the War Cabinet it is the practice to invite the Minister at the head of the Department to attend the meeting or, at any rate, to attend while those items on the agenda are being discussed which concern the Department.

Miss Wilkinson

On the mat.

The Prime Minister

I do not know why the hon. Lady should suggest that they are on the mat. They are there, and they are invited to give their advice on any question that comes up for discussion. The imaginative gentleman, who was quoted by the right hon. Gentleman the Member for South Hackney in an article in the "Times," when he had exhausted all the information, which he had no doubt obtained from authoritative sources, added a paragraph of his own in which he suggested that the numbers on the opposing sides in the Cabinet were very unfairly weighted against the case of the export trade and the economic front. He said they were four to one—the Service Ministers and the Co-ordinating Minister on the one side, and only my unfortunate friend the Chancellor of the Exchequer on the other, who was already so much engaged in his own affairs that he could not be expected to put up a proper battle against the forces arrayed against him. Of course, the gentleman who wrote that article is not, and so far as I am aware, has not been a member of a Cabinet—a War Cabinet or any other Cabinet—and he cannot be expected to know what goes on. Anything more widely different from the real practice of the Cabinet I cannot imagine.

I have just explained that those who have a case, if there be a case, to put on one side or another do not have to rely on my right hon. Friend to put their case for them. They are there to speak for themselves, and the War Cabinet as a whole has a full opportunity of hearing whatever may be said on any side of a case before they take their decision. I also want to explain—and this much I may say without giving away any important Cabinet secrets—that it is not the customary procedure of the Cabinet to go through the "Aye" and "No" Lobbies on the subjects that come before them. I cannot remember a single occasion since I have been Prime Minister when the Cabinet has registered votes at all.

Mr. H. Morrison

I can quite believe it.

The Prime Minister

If the right hon. Gentleman believes it, he does not believe the gentleman whom he quoted. It is a mistake to imagine that members of the War Cabinet take only Departmental views when they are discussing questions of broad policy in the Cabinet. Something was said about personalities at an earlier stage. If a man has a personality which brings him up to Cabinet rank it generally means that he has a mind broad enough to look beyond the narrow interests of his particular Department, and I do not believe it is the case in Cabinets, War Cabinets or any other Cabinets, when these matters of high policy are discussed that the members of the Cabinet are so small-minded that they cannot rise above merely Departmental considerations and take a more statesmanlike view. At the present time we are still in the early stages of the war, but to-day, just as in the Great War of 1914–18, we endeavour to look at every question which comes before us from this paramount point of view—Will the action which we propose to take help us to win and help us to shorten the war?

If I thought now or at any other time that the appointment of this new Minister, by whatever name he were called and whatever functions were ascribed to him, would help us to win the war or to shorten it by a day, I should take a different view. It is because nothing has been said here or outside which has convinced me that any of these proposals would be an improvement on existing machinery, that I came to the conclusion myself that this is no time for a change of this sort, and I shall ask the House to support me in that view.

6.10 p.m.

Mr. Gordon Macdonald

When the Prime Minister intervened so early in the Debate I wondered why, but I did not have to wait long to find the reason. It is evident that the right hon. Gentleman decided to see whether it was possible to play off the Leader of the Liberal Opposition against the opener of the Debate. He has done that exceptionally well by showing that the reasons prompting the two right hon. Gentlemen differ. I do not think he succeeded as well as he might have done in not introducing debating points. This Motion is on the Order Paper because there is dissatisfaction in the country with the activities of the Government. The Prime Minister told the House that the Government have done all they can and will continue to do all they can. It may be that our greatest danger at the moment is the realisation that our potential resources are superior to those of Germany. It is very encouraging to know that, but I see a danger there. I have known on many occasions a person with smaller resources who, as a result of making a greater use of them, showed up better than the individual with greater resources. Whatever we may say of Germany, she is making full use of all her resources in the prosecution of the war. I am not prepared to admit that we are.

If the Prime Minister and the Chancellor were able to spend more time—and I know they cannot—in industrial areas and to see the conditions there, they would realise the reason for dissatisfaction with the prosecution of the war. When there are 1,500,000 unemployed in the country the Prime Minister should realise that people are unable to understand why they remain unemployed at this moment. He and the Chancellor make a point of telling the workers that their wages must lag behind the cost of living. What is being asked by the underpaid worker is why, at a time when they could render so much valuable service to the country, they are not being called upon to do so. The Prime Minister must realise that our only anxiety is to win the war. It is no concern of mine to criticise the Prime Minister or the Chancellor as individuals; I want only to speak of them in their official position with the desire that everything should be done to prosecute the war to a speedy victory.

I was pleased to hear what the right hon. Gentleman said concerning the export trade. It will be very encouraging to the men engaged in those trades. The setting up of the Council which he mentioned is a very necessary step. In the Annual Review of the "Manchester Guardian" I read an article by the right hon. Gentleman who is responsible for the Overseas Trade Department. I was glad to see that he appreciated the need for such a council. I am not satisfied that all that could have been done has been done in the past. The Government are now setting up machinery which will bring about an improvement, and I welcome that as a step in the right direction. The Prime Minister asks why we want the Minister referred to to be in the War Cabinet. I should like to know what decides whether a Cabinet Minister is to be in the War Cabinet or not. What considerations decide the Prime Minister to include this Minister and exclude that? No one would expect that the Chancellor of the Exchequer would be outside the War Cabinet; it is essential that he should be there; but what are the considerations as regards other Ministers? No doubt the consideration is that the Prime Minister thinks the inclusion of a particular Minister will help with the successful prosecution of the war. To-day war involves every section of the nation, and I ask whether we are doing all we can. The Prime Minister has said that when the War Cabinet are discussing some Department the head of that Department is called in to be present at the discussion, and that is all to the good, but the Prime Minister must know that that gentleman retires before any decision is taken.

The Prime Minister

That is a mistake.

Mr. Macdonald

Whenever I have been called into consultation on matters, called to give evidence or give my opinion, it has been my usual experience that afterwards I have been asked to retire. Now we hear that the responsible head of the Department remains until the decision is taken. That is very acceptable to me; it goes a long way to meet my point, which is that the individual responsible for the trade of this country is a responsible person who ought to be consulted and ought to have executive power in dealing with War Cabinet decisions. I am not satisfied that all that could be done is being done for our different industries. I believe that the individual referred to by my right hon. Friend would help in that direction.

I am closely associated with the mining industry, and I am not satisfied that the methods adopted for the mining industry since the war began have been the best. I was pleased to notice the Secretary for Mines on the Treasury Bench during so much of the Debate; of course we do not expect him to sit throughout the Debate. The Prime Minister tells us of the great need for stimulating exports at present. We all fear inflation, and also a shortage of foreign exchange. But what has happened? The question of the oil supplies of this country is an important one and may create trouble in the future. For years we on this side have advocated a rapid increase in the production of oil from coal in this country. What has the War Cabinet done to stimulate that? I know that at the moment a subcommittee is examining the different processes of extracting oil from coal, but the Prime Minister should bear in mind that the reason why we are to-day so dependent upon oil from abroad is that he and his colleagues have for years past refused to take the action, which they ought to have taken, to increase the production of oil from coal in this country. He may reply that certain action has been taken in the past, and that is so, but the steps taken were insufficient.

I ask the Prime Minister to realise that this war will not be won unless we retain the confidence of the people of this country. That is essential. That confidence we have to-day. I have never in my life known the country more united on any issue than it is on this issue, but there is a possibility of the Government itself undermining that confidence. In the industrial areas they view things differently from the way in which we view them in this House. We have a Ministry that is responsible for road and rail transport, but is anybody responsible for waterways transport? Early in the last war great use was made of water-ways transport. A decision on the matter was taken in this House. What is being done about waterways transport to-day? It is all very well for the Prime Minister to say that one Minister is responsible for one thing and another Minister is responsible for another. I say there is somebody responsible who, in my view, is not fulfilling his responsibility. The other day there was evident surprise when I said that in Lancashire alone there were hundreds, even thousands, of men and women who spend five hours every day in getting to and from their work. In that respect we are not making the best use of our national resources. We cannot afford to have people spending 30 hours a week solely upon getting to and from their work. Is the Minister of Transport doing all he can do to assist people in those circumstances? I am speaking of only one area, one ordnance factory, and I am raising this point solely in the light of winning the war, and nothing else. I would emphasise that.

I have never engaged in criticising the Government too much in this House, especially in the war, because I realise that.hey have a stupendous task, but I would ask the Chancellor of the Exchequer in his reply to deal with a few of these questions. First of all there is the subject of exports. In the mining industry exports have gone up, but I should like the Chancellor to understand what has happened. Those exports have gone up as a result of some understanding with countries abroad. I do not mind cheap coal going abroad in order to keep neutrals on our side as far as possible, especially if later we can turn them into allies. But it should be remembered that cheap coal means a lowering of the proceeds of the mining industry, and that means endangering wages. By deliberate policy the Government are keeping down the price of export coal, and I think it is a gold policy, but at the same time the miners are being told, "Do not expect to link your wages up with the cost of living." If we are going to keep down the price of coal to a figure which is essential if we are to safeguard the attitude of neutrals, is it not possible to keep down also the price of the goods which the miner has to buy? If we keep down the price of coal and keep down miners' wages, the price of the goods which the miners have to buy ought also to be kept down; otherwise we arc penalising that section of industry—in the interests, I agree, of winning the war. The miners are not the people to squeal. They did not squeal in the last war and they will not squeal in this war. They will carry their share of the national burden. No section of the people, rich or poor, will carry their share more willingly. But I beg the Chancellor of the Exchequer and the Prime Minister, when deciding upon Government policy for the export trade, to pay some regard to the fact that the price of export coal is an important factor in determining the wages of miners.

I ask the Prime Minister to remember this: Germany is unscrupulous. I think the Prime Minister's speech yesterday was a speech which was needed in the country. I want the country to know that this Government—I do not care what its colour is—is doing all that it can to deal with the German menace. But Germany is unscrupulous. I sometimes feel that the neutrals are in danger of thinking that because we are more scrupulous they can safely run the risk of not pleasing us, whereas they fear running the risk of displeasing Germany. That is always a danger which the generous man suffers: the idea that it does not matter about displeasing the generous man, because he will treat you generously afterwards, but do not displease the bully. That is what is happening, and I think the neutrals need to be convinced of that by export trade policy and other methods. In dealing with this unscrupulous enemy it will be necessary, in my opinion, to use every ounce of our energy in every way. Otherwise, it will be a long war, and a long war means ruin, not only for certain sections but, in my opinion, ruin for millions in this country, and the issue is not going to be certain. The reason I support the Motion is that it calls for a step which I believe will help not only to win the war but to win it' at an early date.

6.25 p.m.

Mr. Amery

I need hardly tell the hon. Member for Ince (Mr. G. Macdonald) how whole-heartedly I agree with his concluding sentences. The general question of economic policy is, of course, one of enormous complexity when it comes to the actual working out of it. On the other hand I submit that it can be stated in a very few words. We have to make an unprecedented effort in production in order to meet the needs of the war. We cannot meet them, as we did in very large measure in the last war, out of capital. We cannot meet those needs more than in part, though we must do it in part, by a limitation of our own consumption by every class of persons in every walk of life; and here I would only add an expression of my hope that at any rate the future health of our children may not be imperilled by whatever we are compelled to do. In the main we have to earn victory as we go along by a far greater increase of output, whether for home consumption or export, than this country has ever envisaged. When at the end of five months of war there is still an enormous figure of officially unemployed—however we may justifiably modify and correct that figure—and a no less great figure of unofficially unemployed, and of women who might be employed, as they were in the last war, some of us feel that it is a state of affairs which does not altogether call for the expressions of satisfaction and complacency which I notice in a certain Amendment upon the Order Paper.

We must export, and export on a scale and by methods which we never employed before. It is all very well to say, as my right hon. Friend the Secretary for the Department of Overseas Trade said in December, and as the Prime Minister repeated just now, that the world market to-day is a sellers' market, and that the volume of exports, in so far as we can get them, apart from all the restrictions and the competing claims of Government Departments, is not as large as the market will take. Let us remember that if it is a sellers' market for us it is also a sellers' market for others. We have to undersell the others, and in the conditions of trade to-day that may not be easy. Even so, it is not a question of merely selling up to the existing margin of the sellers' market, which may soon become filled up and will then turn into a buyers' market. When it becomes a buyers' market we have still to sell far more than we have ever sold before, and to do that we shall have to employ every kind of method, orthodox or unorthodox, Socialist if you will, Liberal if you will, Protectionist if you will. We have to do as we did in the Napoleonic War, when we discovered new sources of export trade, when we created the cotton export industry, which for generations was the greatest export industry in the world, by our system of bounties.

It may be that it is in new industries—it may be motor cars, it may be textiles, it may be some wholly new industry like plastics—that we ought now to put the whole energy and resources of the State behind the creation of markets that do not exist. Henry Ford and William Morris did not wait for the sellers' market in motor cars. They built new types of cars which created their own market. What we need to-day is an export drive based on an export plan. The Prime Minister told us that the new President of the Board of Trade, whose appointment we all welcome and whom we shall welcome personally before long, is creating a powerful body of expert advisers as his Export Council. That is undoubtedly an excellent measure and we all hope for its success. Only do let us remember that this export business does not depend only upon the President of the Board of Trade and his advisers. He has to get the raw material for his export and the possibilities of export from every kind of other Department. There is a tremendous competing demand from all the Service Departments. That demand can be met only if our exports are kept up. Every gun, every aeroplane and every shell can be made only if the necessary raw materials can be secured by our export trade as the war goes on. In any case in order to secure the right allocation, in the light of the policy of the Government as a whole, you want something more than consultation, adjustment and conciliation between Departments; you need—if I may use the word deprecated by the right hon. Gentleman who moved the Motion—co-ordination, or if he prefers it, allocation.

The other day, my right hon. Friend the Secretary for Overseas Trade told the House with great satisfaction that his Department was able, after negotiation, to agree with the Minister of Supply on the amount of locomotive-producing capacity to be devoted to various Departments and to the export trade. That was satisfactory, so far as it went. But is that the right way? Is negotiation between Departments, some of which are much more powerful than others and some of which are represented in the War Cabinet while others are not, the way to get a really satisfactory allocation? Compromise is not true co-ordination or—as the right hon. Gentleman opposite does not like that word—true allocation and direction. Let me give another instance. It may be of the very first importance that we should conserve our petrol and make use of other substitutes. To a very large extent, I understand, petrol-driven vehicles can be driven by gas, as well as by petrol. Long years of experiment have proved it, and, I may add, in passing, and mention it to the Prime Minister, have been carried out by the gas department of our own great city.

If that is so, surely the right thing to do is to use the most powerful influence we can to secure the greatest measure of immediate or speedy transference from petrel to gas. In Germany, all petrol-driven lorries are to cease operating after the end of this year and to be converted to gas. In this country, by one of those weak compromises that are just the kind of thing of which we complain, the Chancellor of the Exchequer has rectified a slight handicap which the existing regulations imposed on the gas-driven vehicles. It was a purely negative rectification. Nothing positive has been done to bring about results with which we would all agree. That is what we complain of. I feel that the Prime Minister made no real attempt whatever to answer the main argument put forward by the right hon. Gentleman the Member for South Hackney (Mr. H. Morrison) in his opening speech, and supported by the right hon. Gentleman who leads the Liberal party.

The Prime Minister

Would my right hon. Friend explain how a new Minister would put right the defects of which he corn plains?

Mr. Amery

I am hoping to do so. I say that what was urged by those right hon. Gentlemen, and what is urged outside not only by almost every newspaper that supports the Government, but by all the business world is, general guidance and co-ordination, if you will, but even more definite allocation and decision, in those matters that are now wandering round corridors and committee rooms for consultation, should be in the hands of some one who is a member of the War Cabinet and, as such, envisages the policy of the Government as a whole and is able to give direction in accordance therewith. It is not a question of a mere extra Minister, a fifth wheel to the coach, overriding people who know better. It might happen—I remember that it did happen on occasion, when there was a War Cabinet during the last war—that the Minister who represented the War Cabinet and who realised the war Government's aims and point of view, might override the views of the majority of the Ministers with whom he was in consultation. While their views might be perfectly sound within their limitation these Ministers would not be cognisant, in the same sense, of the motives and ideas animating the War Cabinet itself.

The Prime Minister

I am sorry to interrupt my right hon. Friend again, but as he accused me of not answering the case which he put up I wish he would tell me exactly how this new Minister would act in order to correct the defects in the taxation system of my right hon. Friend to which he has directed his criticism.

Mr. Amery

If my right hon. Friend would only be a little more patient I hope not to be very long; at any rate I hope not only to say that this would work but to show how it did work in 1917–18. I have, at any rate, this advantage over my right hon. Friend, that I took part as Secretary in that War Cabinet, as well as took part in the work of far less competent peace Cabinets afterwards. Only the War Cabinet can frame policy and modify that policy as circumstances change—the whole policy of the Government. It is not possible for the War Cabinet always to have, on every matter, the Ministers concerned in attendance. What is essential is that the War Cabinet should be able to delegate, in the main, to one of its members, the task of supervising and helping a group of Departments.

We are told, and the Prime Minister has told us to-night, that that is the function of the Treasury. We are asked: "Is not the Treasury the appropriate Department to do that?" I say that the answer is "Emphatically, No," and for two reasons. First of all, the Treasury is already a great co-ordinating Department. It has to co-ordinate all the Departments and their expenditure, in the light of the finances of the country, the resources of the country and of the foreign exchanges. That applies to the War Departments just as much as to the economic and social Departments. It has already an immense task of co-ordination which ought to occupy the whole time of the member of the Government who is Chancellor of the Exchequer. Secondly, the Treasury is not in the main an economic Department; it is a Department of economy, which is quite another matter. In discussing economic policy, we are thinking not of Budgets, Estimates or expenditure, or of the "Whitehall War" that goes on in that connection unceasingly year in and year out. We are considering industrial and agricultural production, shipping, trade, man-power and a whole host of questions with which the Treasury has no more to do really than it has with the policy of the fighting Services or of other Services which are not at present represented in the War Cabinet. The demand that is made is that the economic productive and commercial activity of this country shall be represented in the Cabinet. It is not a party demand, but is just as strong in many quarters on this side of the House. Upon a free Vote of the House it would, I venture to say, be expressed far more strongly than it is likely to be to-night.

This is not a Motion of criticism either of the Chancellor of the Exchequer, the Prime Minister or of the Government. It is a demand, at a supreme moment of our history, for an instrument of government which can both frame policy with foresight, perspective and vision, and carry it out vigorously; which can give to all the Departments, each in its proper sphere and with its proper parliamentary responsibility—no one in any party wants to diminish their parliamentary responsibility—direction and guidance in the exercise of its functions. After all, there are certain general principles of organisation which affect all who have to deal with the difficult, changing and unforeseeable situations of war. In every fighting Service it has long been recognised that you must not give to the people who frame policy the responsibility for day-by-day administration. It is a commonplace of psychology that routine and detailed administration always seems more urgent in point of time than the framing of policy. The broad policy for a war next month or next year can always be put aside until to-morrow, and then perhaps till another to-morrow, and so indefinitely till it is too late. Routine is always urgent. It is always the first thing we do when we get to our desks in the morning. It is always that which requires the least intellectual effort and makes the least demand for fundamental change in our outlook or our structure. That is true for every great fighting Service. The general staff is entirely free from administrative duties. That is one principle of organisation; another is that you must have a proper chain of delegation. Whatever the deciding body, it should deal, not with a vast number of Departments directly, but through someone who, in his turn, looks after a limited group. The whole organisation of an Army or of a Fleet is based on this principle, and in war you cannot ignore that principle in the direction of general policy.

The conclusion to which these considerations naturally lead one is that, at a supreme time like this, what is needed is a small Cabinet every member of which shall be free from departmental duties. If we are asking for an additional member to represent a function it is not because we want the War Cabinet to be larger; at the same time, we think, those who are representing not functions but Departments—overworked Departments —ought to be outside the War Cabinet and fulfilling their duties elsewhere; or, at least that they should be relieved of practically all their administrative duties by powerful and responsible deputies.

My right hon. Friend has spoken of people who raise flags. I am proud to say that I raised this flag in this House just 24 years ago. On that occasion—it was on an Amendment to the Address, in February, 1916—the late Sir Mark Sykes and I, in view of the muddle, delay and slowness with which Mr. Asquith's Government carried on, urged just this principle of a small War Cabinet free from departmental duties. I shall not weary the House by quoting extracts from my own speeches but I will quote two sentences from the speech of Sir Mark Sykes in which he described the existing system, which was very much like the system of to-day, as one which ends in councils, committees and debates, which lead eventually to inertia, and through inertia to alarm, and through alarm to Austerlitz. The other sentence demanded one compact, responsible, determined body."—[OFFICIAL REPORT, 15th February, 1916; cols. 40 and 46, Vol. 80.] This was pooh-poohed, censured and rejected as absurd by Mr. Asquith. In December of that year it was carried out by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). I venture to say that by no means the least of the services which the right hon. Gentleman, who is not here to-night—they were very great services indeed—rendered to the country in that war was his courage in sweeping away the old Cabinet system and in introducing the War Cabinet of five Members, a measure which, I venture to suggest, with some direct and intimate knowledge of those affairs, made no small contribution to the final victory. I can best describe my point by reading a few sentences from the War Cabinet Report of 1917: The system of the War Cabinet distinguishes between a body which is responsible for the supreme direction of the war and the Ministers who have charge of the great administrative Departments of State. The general direction and policy of His Majesty's Government during the war rests with the War Cabinet whose members, with one exception, are relieved of the day to day pre-occupations of administrative work and whose whole time is, therefore, entirely available for initiating policy and for the work of coordinating great Departments of State. I should like to add a few words from the statement of the Prime Minister when he brought this policy to the House on 19th December, 1916: I am confident that this is the best system for the conduct of the war when you want quick decisions about everything. The Prime Minister asked me how to meet some of the difficulties which he suggested to the right hon. Member for South Hackney (Mr. H. Morrison). I would point out that similar problems were solved without difficulty by the War Cabinet of those years. Individual members of that War Cabinet not only had the time to be in constant daily communication with each other but, subject to the final decision of the War Cabinet, they were able to deal, in the light of the Cabinet's main policy, with the committees, whether ad hoc, or permanent inter-departmental committees with whom they worked. In the case of most military issues we had that great soldier and statesman, General Smuts, and in the case of the economic issues it was the late Lord Milner who admirably filled just that position which in general terms the right hon. Member for South Hackney and hon. Members on all sides of the House advocate, without creating any of the difficulties suggested by my right hon. Friend the Prime Minister. He was, in fact, a member of the War Cabinet in the fullest sense and next to the Prime Minister he took the largest part in all the decisions of general policy. But with his large knowledge of economic issues he was specially well equipped to give guidance and leadership to the departmental committees whether on agricultural or general economic questions. Of course, his decisions in these matters were subject to the ultimate decision of the War Cabinet itself and when he differed, as he sometimes did, from those in the Departments who advised him he would bring the matter back to the War Cabinet, and the War Cabinet nearly always endorsed Lord Milner because they knew that he had the wider outlook as well as the abler brain.

I would like to add one thing further because past history is not irrelevant to this matter. For many years after the war it was understood—I do not think I am violating any Cabinet or Committee of Imperial Defence confidence—that in the event of a war of moderate dimensions there would have to be a special War Committee of the Cabinet, but that in the event of a major war the ordinary Cabinet would have to be scrapped and a War Cabinet take its place. That decision, with regard to a War Cabinet, meant a small executive and policy Cabinet whose members were not in charge of administrative duties or of great and laborious Departments of State. Why that principle has been departed from in this war I cannot tell. After all, the present Cabinet is a War Cabinet in name. But it is certainly not what was understood to be a war cabinet in the years which followed the Great War. It is a Cabinet in which only three of eight members, apart from the Prime Minister, are free from departmental duties; it is a Cabinet in which two of those who are free from departmental duties are ex-Service men, naturally preoccupied with Service considerations and not so familiar with the range of problems which we have been discussing and on which the Prime Minister has been touching in his speech to-day.

Surely that is quite rightly described by the "Times" in an article to-day as a "curiously lop-sided and over-weighted" arrangement. We are pleading for a War Cabinet based on a clear principle, in which all the essential functions of the nation are adequately balanced and represented. We are not necessarily asking for a cut-and-dried scheme. It may be conceivable that the great Service Departments could still be represented if the routine work of the Ministers were taken over by really powerful and responsible deputies. At any rate, this principle for which we are pleading is one which experience, our own in particular, has shown to be essential for the conduct of war.

We are frequently told, "Things are going on very nicely and they are good enough as they are now." That is the old answer which some of us—my right hon. Friend the First Lord of the Admiralty knows it well enough—have had put to us again and again whenever we have urged certain things to be done. When we asked for the co-ordination of Defence the same answer was given. The same answer was given when we asked for a Minister to deal with the co-ordination of Supply. The Prime Minister today made what seemed to me to be an astonishing statement. He said we did not want a Minister of Supply until we decided last March to double the Territorial Army. Surely if we had had a Cabinet free enough from routine duty to be able to plan ahead and envisage things in their right perspective and importance we should have realised that the supplies required to equip a new Army must take far longer than the raising of that Army itself. Territorials can be trained in a few months, but it takes three or four times as long before the Territorials can have the weapons without which they will not be of any use. If we had envisaged even a possibility of war on a large scale we should have tackled at least that problem of Supply. We should have ordered the guns, the rifles, the Bren guns and anti-aircraft guns, even if we hesitated in regard to the measures necessary to raise the men. When we did urge compulsory service we were told again, "It is not required and it does not fit in with our democratic institutions." Of course it had to be done, but only after we had pressed for months in vain, and too late for more than a handful of Militia to have had any training when the war came.

We have on the Paper to-day an interesting Amendment—very interesting, an Amendment beaming with satisfaction at the good grace with which those in official quarters have received it. Well, I remember that in March or April last some of us put down our names to a Motion urging the immediate acceptance of compulsory mobilisation of men, money and munitions, in other words, of universal service. Is there anyone in this House to-night who would say we were either premature or wrong? Of course not. Yet no sooner did we put that down on the Paper than certain zealous Members of the House hurried to put down an Amendment "congratulating His Majesty's Government on their decision to retain the voluntary system whilst expanding the armed forces." Scarcely was the Amendment on the Paper when the Government accepted in substance our Motion and the dutiful and loyal amenders found themselves and their Amendment in the air. They remained in the air on the Order Paper, I believe for weeks. I would warn hon. Members who are moving their Amendment to-day that they too may find themselves left in the air before very long. The Amendment will remain on the records and they may remain in the air. This may prove a very embarrassing Amendment for them. I think it is also rather an embarrassing Amendment for some of us on this side of the House. Some of us probably would have voted for a direct negative to the Opposition Motion, however much they agreed in substance, just because it is an Opposition Motion which might be regarded as a criticism of the Government. But to ask those of us who are deeply concerned about the conduct of affairs in the present situation to vote positively for that kind of an Amendment is really asking a little too much.

Some of us at any rate feel that we are still in substance living under the same general kind of organisation as we were in time of peace, under an organisation which militates against foresight and broad perspective, clear planning and prompt and decisive execution, a system which tends not to act in time. A few hours ago Herr Hitler made a long-winded speech in which, however, one sentence is very significant. He said Germany in the last five months had done more than in the last seven years. Can we say as much for ourselves? Or can we say it except in so far as those seven years have been years which the locusts have eaten?

We are met here as an assembly of free men. All that those simple words stand for is at stake for us in this war. Millions of innocent men and women, much the same as ourselves, are living in a hell on earth in Central Europe From that hell we can only save them, and we can only save ourselves from the same fate, if we defeat Germany. Before we can do so our people in every class of life will have to make efforts and face sacrifices hitherto undreamed of. The least they are entitled to ask of us, their representatives, and of the Government whom we support in this House, is that those efforts should be effectively directed and shat their sacrifices should have been worth while. The cruellest blow they could suffer would be the thought that for want of clear thought, clear direction and leadership, tens of thousands of precious lives may be thrown away and the future happiness and the well-being of our people impaired for years to come. Surely it is worth while for this House and for the Government, in no party or personal spirit, to give the most earnest thought to this question of the structure of our supreme executive. We must make absolutely sure that it is the best possible for the situation. Can we really say today, with complete and unquestioning confidence, even after the Prime Minister's speech, that that is the case?

7.1 p.m.

Miss Wilkinson

The right hon. Gentleman the Member for Sparkbrook (Mr. Amery) will probably forgive me if I do not follow him completely in what he has said. I agree with him generally in the line he has taken, but I would say to him that I do not think things are so bad as all that.

M. Amery

Vote for the Amendment, in that case.

Miss Wilkinson

Not at all, but I do not think we need be so lugubrious about the position generally. What I really wanted to deal with was the part of the Prime Minister's speech which referred to control. The Prime Minister dealt very generally with the situation as a whole, and then went into details on the machinery. Those details, if taken at their face value, would prove the case that has been made out on this side for having a Minister of some kind in general control. He seemed to feel that the whole world was all right, and that we need not trouble any further because big business men had been put in charge of the various aspects of the war, leaving it to the War Cabinet only to tie up the ends and talk to these men when necessary. The Prime Minister's confidence in his control is one of the things which is worrying a great many of us. It is one of the least satisfactory aspects of the way in which this war is being run. I suppose it is true to say, in spite of the pessimism of the last speaker, that in the last six months something like an economic revolution has taken place in this country. Practically all the food and a great many of the other commodities that are imported for civil life and on account of the war are now being imported under Government control. One of the things with which we are concerned is where the policy is to come from; whether we are to control the controllers or they are to be left to settle the policy, each in his own section of control. The word "co-ordination" has been bandied about a good deal. There is a difference between those who think of it as being a kind of jig-saw, where all the pieces fit in and are static, and those who think of a real drive, which gets something done.

I should like to put this point before the Chancellor of the Exchequer, in the absence of the Prime Minister—I do not complain of his absence, as he has sat here a long time. Does the Chancellor really think that it adds to the confidence of the country as a whole, or even to the confidence of the men who are working in connection with Supply, to know that in each case the big business man is in control of his particular trade? Many of these men—I should say, practically all—are working without salaries. Some, I believe, have even brought along their own private secretaries, and are paying them. Some are not actually owners or directors, but big executives, of firms. I am not imputing, and I do not even want to suggest, any dishonesty, or any- thing against the personal integrity of these men. They are much too big to be influenced by personal considerations of the kind. But what is to be the effect of this general policy, through all the Departments, of always putting big business men in control? To begin with, they have to deal with trade secrets; they must learn the secrets of organisation and control in their competitors' firms if they are to do their duty at all.

In some cases, as I have said, these men are not independent individuals, but are paid executives in very big firms. Presumably they are going back to those firms at the end of the war. Can it be reasonably expected that they will take decisions which will be very unpalatable to their own trades, in the same way as men would who were completely independent of those trades? Is it fair to place upon them the responsibility for such decisions? It is felt also that these men are not in a position to take very big and broad executive decisions where it may mean that a trade has to be expanded enormously, one might even say, recklessly, in the national interest, in order to deal with war demands. A man has to consider what is to be the position of his trade after the war. I happened to be at a dinner party, not in the least connected with politics or this House, where three men who were in that position were among the guests; and the whole discussion at dinner was not so much about how we were to win the war, but as to what will be the position after the war. That is a question that concerns a lot of us. It seems to me that if you put in control a man who is mainly interested really in his own trade, one of the things he must have in mind is the position in which the machinery of that trade will be when the war is over. It is very easy to come here and talk, but that is bound to be in a man's mind.

I want to give an example that I have given on frequent occasions, but which each time I give it seems to be more apposite to the occasion. Shipping, as we know, is the bottle-neck of every Department. The Prime Minister referred to export trade, which entirely depends on shipping. I cannot think how many times since 1935 I have got up here and said that, while we were re-arming and thinking of war as a possibility, we were allowing National Shipbuilding Security, Limited to cut down our shipyards by one-third. Everything that we said about that has been shown to be abundantly true. We realise now how much it would have saved the country in the first six months of the war if some of these shipyards had been kept on a cost and maintenance basis. But it was not considered because this concern had determined to cut down the shipbuilding trade.

That was the position at the beginning of the war; what is the position now? The man who was responsible, who put his whole personal drive into the restriction of shipping, even in face of the protests of some of his own colleagues, was Sir James Lithgow. The Prime Minister, at that Box, got up and announced that there was to be a new Director of Shipbuilding. Who was it to be? The man who was put in to extend the shipbuilding capacities of this country is Sir James Lithgow, who, if justice was done, would be impeached for the situation into which he brought this country at the beginning of the war. What confidence can the shipbuilding industry of this country have in this appointment? A thrill of horror went through the towns on Tyneside when the people were told that the man who, above all, was responsible for National Shipbuilders Security, Limited, was being called in to expand the shipbuilding industry of this country. I was beginning to wonder whether we ought not to alter our Motion and insist upon suggesting that the Government should put in charge of economic warfare a really good, trained psychologist, who would be quite a useful addition to the War Cabinet.

We want to know the policy that is behind these controls because upon that depends the prices of commodities? They are buying upon a national scale. They are buying on behalf of the Government all the main food commodities, and distributing them very largely at fixed prices. The thing has become an automatic preference. And here, I would like to pay a tribute that ought to be paid to the really magnificent work which our Civil Service does. I believe that when the war is over it will be found that the civil servants will have done a very great share towards helping the nation. I will consider the question of the controllers from another angle. The work of the civil servants, and indeed of the controllers themselves, cuts out a lot of expensive and complicated trades, a great deal of the wholesale trade, and it cuts out what I, being a prejudiced person, would call the international gambling machinery, but which Members opposite would say was the necessary apparatus of international trade. This has been rendered largely redundant.

There are, therefore, two ways in which to deal with the situation. We have something like the socialised distribution of these commodities. That costs money. We could also have the private competitive distribution of these commodities, using the old competitive machinery, which would be costly. I suggest that the policy which is being adopted is unfair and largely unworkable. It is a policy by which as much as possible of the old machinery of private competitive distribution is being kept in being, with the idea of having that machinery ready for operation at the end of the war. Some of us on this side of the House do not want to see that machinery restored at the end of the war. It adds enormously to the price of commodities as it is. We wonder why, when it was a question of keeping the shipyards on a repair and maintenance basis—and the workers too, if it came to that—a vital national interest was simply wiped out because it did not suit the trade ring, and that now it suits the trade ring for this apparatus to be kept in operation. Pressure is now being used in order that these men shall be paid an average percentage of their pre-war prices. The commodities cannot bear both costs. The high prices that we are paying to-day are partly due to the cumbrous double machinery that is being allowed to exist.

The Lord Stamp Committee shows what we mean by co-ordination. "Co-ordination" is a lovely word, and, therefore, I disagree entirely with my right hon. Friend the Member for South Hackney (Mr. H. Morrison). You can end a peroration marvellously by making use of the word "co-ordination." The Lord Stamp Committee is a co-ordinating committee. The Inter-Departmental Committee, and also the committee of which the right hon. Gentleman the Chancellor of the Exchequer is chairman, came to the conclusion that only the work that was actually done for the purposes of the war should be paid for. If that were carried out it would actually mean that there would be considerable economy, but I cannot see that it is being carried out. Looking at the trade figures, and at the economic journals, it is clear that claims are being made, and, so far, are being met, that these men who are rendered redundant by war should very largely be paid the average percentage of their prewar profits. In order to do that all sorts of other sections of machinery are inserted into what ought to be a perfectly plain run-through of the apparatus for the distribution of the necessaries of life.

This is the sort of matter you cannot expect the individual controllers to settle. I am not imputing anything less than a complete desire on their part, through patriotic motives, to serve their country. These men are either themselves big business men or are the paid representatives of big business men, and, if they have to settle questions like this, they cannot help doing it not on the lines of public interest, but on the lines of their individual trades. So much was hastily fixed up when the crisis arose that it really is necessary that there should be someone to whom these problems could be given for decision. The Prime Minister spoke of calling in the President of the Board of Trade if it were necessary to take a decision on some particular point. But here a decision has been taken. We have these terrifically strong controls. I wonder whether the Chancellor of the Exchequer himself realises how strong these controls really are. We have the biggest men in the various trades. I do not want to quote the names of some of them, but they are men who have got their own trades in their grip. I suggest to the Chancellor of the Exchequer that unless he is very careful these commodity controllers, who are the strong men in their respective trades, will be stronger than the Exchequer. I am not sure whether in some cases they are not now stronger than the Exchequer.

The Economic Minister in the Cabinet should be a man who could deal, not altogether with details, but with important matters of principle that do arise, because things that are seedlings now will be big trees before the war comes to an end. We do not want to bring to the House first-class scandals for ventilation at this time, but if it has to be done it will be done and the Prime Minister and the Chancellor of the Exchequer ought to consider whether they cannot find a man to do this job. I admit the Premier's difficulty when he looks on his Front Bench for a man. Where is he going to get one for this job? It looks as if he will have to apply for the temporary services of the Archangel Gabriel to tackle this problem.

I support the point made by my right hon. Friend that there should be, in addition to the man for the job, a really first-class economic staff behind him. Even such a man as the Lord Privy Seal, who, I think, ought to be called the "Minister for Personal Charm," could not do anything, because he has no Department behind him. I think we are now using more scientific brains than ever before in war-time, but if we could have a Department like that it would make up for the personal shortcomings of any Minister who is doing this job. It is no good relying on one man, however much he is a charming co-ordinator, to smooth everybody down and make them go away feeling that all is well. What you really want for this job is a brute, someone to tackle these problems harshly on the basis that no man's interest or profit matters when it is a question of getting this country through its present crisis.

7.24 p.m.

Sir John Wardlaw-Milne

I beg to move, in line 3, to leave out from "House," to the end of the Question, and to add instead thereof: recognises the value of the arrangements now in force for the co-ordination of our economic effort, notes with satisfaction the improvement in the export trade, and relies upon His Majesty's Government to take any steps that may from time to time be required to strengthen still further the economic position of the country. I am sorry that the right hon. Gentleman the Member for Caithness and Sutherland (Sir A. Sinclair) is not in his place at the moment, because I happened to come into the House, after a temporary absence early this afternoon, when he was expressing sympathy with myself and my hon. Friends, for having, as I understood it, almost been forced to put our names to this Amendment. I greatly appreciate his sympathy, but I can assure him that he has no need to have a sleepless night on our account. So far as I and my hon. Friends are concerned, we have carefully considered this Amendment before putting our names to it. Perhaps the right hon. Gentleman's sympathy would have been more appreciated if he had actually made his speech a few minutes ago, because I have listened to five speeches in favour of the Motion and only one— with which I cannot compete in importance—from the Prime Minister, which might be said to be in favour of the Amendment.

Mr. Ellis Smith

It is his Amendment.

Sir J. Wardlaw-Milne

The right hon. Gentleman the Member for Sparkbrook (Mr. Amery), when he spoke a moment or two ago, referred to the fact that I was beaming with satisfaction and complacency about this Amendment. He seemed to think that it expressed complacency with everything that is happening and, presumably, with everything that is going to happen. This makes it necessary that I should draw the attention of the House to the Amendment itself. It is in three parts. First, it is a recognition of what has been done to date; secondly, it is an appreciation of the improved figures of exports; and, thirdly, it is a very definite statement that the House looks to the Government to take any steps that may be necessary in the future to strengthen further the economic position of the country. Therefore, why I was supposed to be beaming with complacency for an Amendment of that kind I do not know, nor can I understand why I should require sympathy in bringing forward an Amendment which is so essentially common sense. I will endeavour to explain to the House why I think it is common sense. Is there any real dispute that a great deal has been done in five months of war? Is not the fact that the Ministry of Economic Warfare was set up on the day war broke out recognition of a determination to tackle one important aspect of the war effort? It is often said that war has not yet started. Nobody would dispute that it has started at sea, where it has been very active and probably more drastic than most people expected. We have stopped German trade on the high seas, and their ships from returning to Germany, and that is something with which we can be greatly satisfied.

The Government set up a Contraband Control Committee, an Economic Exports Committee, and various other bodies, which, in the ordinary way, I would have dealt with in detail. But the fact is that all these matters were put before the House by the right hon. Gentleman who moved this Motion. He expressed appreciation of the fact that these bodies had been set up, and he has made it unnecessary for me to cover the same ground. The first part of the Amendment is a clear recognition on the part of the House that all that was done. None of us would hold the view that everything has been 100 per cent. perfect. Most of us, I am sure, have had examples of things we would have liked to have seen done better, but none the less recognition of the action taken is due to the Government. The situation is entirely different from what it was in 1914, when Germany was in danger of being invaded, not on one side, but on both sides. To-day we have a completely different economic warfare to carry on. We have to undersell her, to outbid her, and to stop her getting supplies in every direction. To stop Germany getting supplies which are vital for her and to secure them for ourselves might be as great a victory as any that could be obtained at the front by military action. There can be no dispute as to the necessity for taking every measure that can be taken to improve our economic warfare against Germany.

The second part of the Amendment refers to the figures of the export trade. There again I do not think there is any division of opinion regarding the facts. The House must appreciate, and give expression to its appreciation, that the figures are as good as they are. Let us remember what has happened. In September the export figure of United Kingdom manufactures fell to £23,000,000. It went up to £24,000,000 in Ocotober, £37 000,000 in November, and £40,000,000 in December. We are bound to express our appreciation of those figures. It does not mean that we should be satisfied with the position but, considering how our trade has to be carried on to-day and considering the difficulties of that trade, the House is entitled to put that on record. I do not think the country fully appreciates the war effort that is actually going to be required, and it is not very surprising that it should be so. Germany had been preparing for this war for years, but it is no exaggeration to say that we were still working on a peace basis and were still hoping for peace up to the very day of the outbreak of war, and we had to disrupt all our previously conceived ideas of how to carry on trade. Nothing that we had done in the past in the way of ordinary trading has any bearing on the situation to-day. The things that we want to sell to neutrals and the things that they want to buy are the very things for which the Government are making the greatest demand upon our industry. The goods wanted by neutral countries are machinery, locomotives, machine tools—just the things that we cannot afford to send abroad. Our export trade figures must always be examined in relation to the situation in which the country is at the moment. We are exporters of coal and manufactured goods, but the latter—mainly the products of the engineering shops—are the very things for which war is making the greatest demand on the country. We have not only to consider the export of goods for the sake of export trade but the export of goods which will get us the largest amount of foreign exchange, and again we have to qualify that by the need for exporting to countries which have hitherto bought from Germany.

The last and most important part of the Amendment deals with steps which may have to be taken in future. The Motion is a very narrow one. It clearly pins the faith of the right hon. Gentleman and the party opposite to the appointment of a Minister charged with the function of planning to the best advantage the resources of the nation. The right hon. Gentleman has called him a Minister for War Economy. There is really no quarrel between him and those who sponsor the Amendment as to what we want. We all want the very best kind of Government machinery, and the best kind of organisation for carrying on the war. The only question is whether we are going to benefit by appointing a new Minister. I am dead against appointing a new Minister. We have quite enough Ministers. What I want is that those Ministers should have power to act. The Prime Minister has just appointed a new President of the Board of Trade, a man of great experience and knowledge, whose record gives one high hopes that the Department will be administered in the most efficient manner. My right hon. Friend the Prime Minister has added to that statement that there is to be a body of expert business men who are going to give their help to the Government, mainly, I understand, giving their whole time and unpaid. I under- stand that that is a proposition of which the London Chamber of Commerce and the Federation of British Industries both highly approve, though I have no direct connection with those bodies. If so, so much the better. But no President of the Board of Trade, and no body of experts is going to be of any use unless given the power and the finance to carry out their work. It is not another Minister that we want. The speech of the Mover alone has convinced me that I was right in opposing an extra new Minister. Far more eloquently than I could have done it, he described all the various Departments of the Government. What is this new Minister going to do that a President of the Board of Trade with proper powers could not do himself?

Sir A. Sinclair

The hon. Gentleman keeps on saying "a new Minister," and I keep on examining the Motion. I cannot find the word "new" at all. It says "a Minister." It might be the President of the Board of Trade.

Sir J. Wardlaw-Milne

The right hon. Baronet now suggests that there should be a promotion and a new name for the President of the Board of Trade.

Sir A. Sinclair

There should be new powers and a Minister in the War Cabinet.

Sir J. Wardlaw-Milne

Do not let us quibble about this point. The right hon. Baronet has not had the good fortune to be present during the whole of the Debate, but certainly the line he is now taking has not been the line which the Debate has followed so far.

Sir A. Sinclair

It is not a question of what is said in the Debate, but of the wording of the Motion. The hon. Gentleman continues to refer to a new Minister, but there is in the Motion no reference to a new Minister.

Sir J. Wardlaw-Milne

There is nothing in the Motion to suggest that what it seeks is a promotion or a change over of the present Minister to a new office.

Sir A. Sinclair

The hon. Gentleman was suggesting that the Motion might mean a new Minister.

Sir J. Wardlaw-Milne

I am referring to the proposal made by the right hon. Member for South Hackney (Mr. H. Morrison), and supported, I understood, by the right hon. Baronet, that there should be a new Department. I believe the right hon. Baronet was not present when, during the Prime Minister's speech, the right hon. Member for South Hackney interrupted to explain that he visualised a new Department, a new staff, and although not necessarily a big staff, a highly expert one. It is my submission to the House that the right hon. Member for South Hackney clearly envisaged a new Minister.

Sir A. Sinclair

We do not vote on the speeches of hon. Members, but on the Motion before the House, and that Motion refers to "a Minister" and not, as the hon. Member has more than once suggested, a new Minister.

Sir J. Wardlaw-Milne

I do not want to pursue the matter further, except to say that if the right hon. Baronet intends to vote for the Motion on the basis that it has nothing to do with a new Minister, he had better take counsel before he does so, or he may find that he is voting in the wrong Lobby. To my mind the important point is that we should not obtain anything by a change that involved a new Ministry or a new Minister which we could not get from the Board of Trade if the President of the Board of Trade were given proper powers. I am glad to think that I shall have the entire agreement of the right hon. Member for Caithness and Sutherland when I say that the Minister, whoever he may be, whether he be the President of the Board of Trade or a new Minister, in taking over trade matters, should have ample powers.

Sir A. Sinclair

indicated assent.

Sir J. Wardlaw-Milne

I observe that the right hon. Baronet entirely agrees with me. I say frankly to the Government that before the war I was not satisfied with the position at the Board of Trade, for I thought that it was not being given all the authority necessary to keep it in constant touch with and enable it to give immediate decisions on trade matters even in peace time; and since the war began, it has seemed to me that the Board of Trade has been pushed aside and that many of the functions which should have been carried out by the Board of Trade have been taken over by other Departments. I had not much to say for the organisation of the Board of Trade before the war, and I have had a great deal less to say for it since the war began. The new President of the Board of Trade will have to bring about a change within the Department, and there will have to be something in the nature of a volcanic eruption, and at the end of it a new birth, in order to produce results. But if given those powers and the ability to carry on the Board of Trade as it should be carried on, surely we ought to give the President of the Board of Trade every help in work which will be of enormous public value. There has been in the past far too much division between the Board of Trade and the Department of Overseas Trade, and those two Departments ought to have been brought far closer together. The Board of Trade should be restored to its proper place to deal directly and at once with all questions affecting industry and trade.

I should like now to say a few words in regard to the general situation and the proposal that there should be a co-ordinating Minister. If such a Minister were not above the Treasury, if he had not power over and above the Chancellor of the Exchequer, what could he do? At the present time the Treasury must have its say in the financial decisions of every Department of the Government. That is essential. Many of the operations that will have to be carried out will not be financially sound. We shall have to buy crops at prices above their value and sell our goods below their value. In all these things the Treasury must be consulted. What would be the position of a new Minister unless he superseded the Chancellor of the Exchequer? What would be the position even of the President of the Board of Trade, if he were to be put in the position suggested by the right hon. Member for South Hackney? Either he would supersede the Treasury in the sense of being able to outvote it, as it were, or he would be in a position in which he would have to ask the Chancellor on every occasion to sanction things which, as President of the Board of Trade exercising the proper functions of his office, he ought to be able to convince the Cabinet about without difficulty.

In conclusion, may I say this: I do not believe that Germany will be defeated by economic warfare alone; I do not believe she will be defeated except by military measures. At the same time, the economic war is of enormous importance, and apart from the sea fight, it is the front on which we are fighting to-day. I do not believe it is necessary for our aims in the war to be stated again, for they are clear enough, but I must say I would like to see some recognition by the neutral countries of the world of what we are doing. It is surprising to me that we do not get anything more in the way of vocal support, at least, from the neutrals. Can they not understand that we have no aims of conquest or gain in this war, that every one of us will be much poorer as a result of the war—of that there can be no doubt—and that we are fighting the battle of civilisation and of freedom for all nations?

The Amendment suggests that if there is anything which His Majesty's Government can do to improve the machine, and so give us a better chance of winning the war, the House looks to them to do it. That is stated in the third part of the Amendment. The Amendment is clear. The House recognises what has been done, it is pleased to see the better export figures, although that does not mean that it is satisfied as to the future, and it looks to the Government to improve the machinery, if it can be improved, at any time, and to ask the House for any powers or sanctions required for that purpose. I commend it to the House.

7.50 p.m.

Sir George Schuster

I beg to second the Amendment.

I do so with great pleasure, and I hope that I shall be able to convince the right hon. Gentleman the Member for Caithness and Sutherland (Sir A. Sinclair) that my pleasure is genuine. We all recognise the value of criticism, and I have not been afraid, on occasion, to express my own critical views about certain aspects of the Government. We heard on Saturday from the First Lord of the Admiralty a very high tribute to the value of the critic's role. He told us that the critic in the body politic performed the same function as pain in the human body, in the sense that criticism was a danger signal and that it was a good thing to have that danger signal. But pain requires careful diagnosis, otherwise it may lead to false remedies. Many a man has put himself out of action for two months or more in order to have his appendix removed, when all he needed was a little more time in which to digest his meals. It is because criticism of the Government is sometimes directed in wrong channels that I welcome the opportunity of seconding this Amendment and of explaining why I differ, both in the diagnosis of the situation and in the remedy proposed in the Motion which has been moved from the Socialist benches.

Critics can perform a very valuable service. They can also do a great deal of harm. If their criticisms are exaggerated, they may not only encourage the enemy, but gravely damage the morale of this country. If their criticisms are misdirected, they may start a popular clamour in some totally wrong direction, and it may be impossible, at times, for the Government to ignore that clamour. I submit that we are in some danger from influences of that sort to-day. We have to consider this Motion and this Debate against the background of a great deal that has been said in the Press in recent weeks. The right hon. Gentleman who moved the Motion was very moderate in his terms. I think, if I may say so, that he even erred in his moderation, because it seemed to me that he failed altogether to establish a strong case for any drastic change in the organisation of the Government. But one has only to pick up any paper to-day to find grave charges made which would, if they were true, justify changes. I propose to select as an illustration a phrase from an article which appeared in the "Economist" last week. That paper has, I think, done an immense amount of good in clarifying economic issues since the war began, but in a recent article it spoke of the fact that the Government had no apparent policy on prices, wages, labour mobilisation, exports, or finance. I submit that that sort of general charge—which it is indeed necessary to establish, if the arguments in favour of the Motion are to carry weight—is entirely inconsistent with the facts of the situation and likely to do great damage to the interests of this country. Take finance, for example. I submit that we have never had a clearer policy on finance than we have to-day—the policy of raising as much money as can be raised by taxation, of dealing with borrowing by waiting for the raising of loans until genuine savings are available to take them up, and, when the loans are raised, of raising them at the cheapest possible rate. "But," it may be said, "although that is the policy, full effect is not being given to it." Surely, however, no one can complain that the war Budget erred on the side of leniency in taxation. Surely too everyone will admit that the raising of loans has been well-timed. And lastly, as regards the policy of borrowing at low rates of interest, no honest observer can fail to admire the agressive courage—I think those are correct words—shown in the 2 per cent. Conversion Loan which the Chancellor announced a fortnight ago. I have in the past ventured to criticise policy when I thought that what could be done in the direction of securing cheap money was not being done with sufficient energy and when the Bank rate was raised after the begining of the war. But of what value is one's criticism, if, when what one has—perhaps mistakenly— regarded as errors are corrected, one does not willingingly acknowledge that a change has been made and that the right policy is being pursued?

Let us turn to exports. I do not want to say much on that subject, because already a good deal has been said. Those of us whose names are attached to this Amendment are not foolish enough to suppose that as a result of four months' trade one can tell what the future of the export trade of this country will be. But nevertheless, one may, with gratification, look at the figures for December, and the more one looks at them the more gratifying they are. The increase, as compared with December, 1938, in what I might describe as really valuable exports, namely, exports of manufactured goods, of coal, and, under the heading of food and drink, of beverages, all of which represent articles into which labour has been put in this country and which it is to our advantage to export—the increase in those compared with the figures of the previous December is about £2,750,000. That at least is encouraging. Now it seems to me that this is one of those cases in which one can test whether criticism is well directed or not. What has been the real difficulty about exports? I submit that the main difficulty influencing the situation is the limitation of the supplies of raw material suitable for manufacturing articles of export. If anyone wanted to criticise the Government, they might legitimately do so on the ground that the Government before the war had not accumulated sufficient reserves of essential raw materials. I voiced that criticism many times, but what is the use of talking about that now? That is past; we cannot remedy it, and what we have to look to is the future, and the question which we have to ask ourselves is whether the organisation of the Government to-day is achieving the results which we need.

Mr. Boothby

May I interrupt my hon. Friend to say that this Motion, as I understand it, is not in criticism of the financial policy of the Government, to which he has rightly paid a tribute? It is purely a question of the most efficient machinery of government.

Sir G. Schuster

I agree, but on what ground the machinery of government being criticised if it is not argued that both the policy of the Government and its execution are so far wrong that criticism is justified? The point I am making is that if we go over the record of the Government and take certain heads—not petty little details which anyone can trot out, but major matters such as would be used by a skilled writer on economics as illustrations to justify lack of confidence in the Government—if we take those major heads, we find that the record of the Government is one of which they can well be proud. Therefore, I say there is no justification for a Motion proposing such a drastic alteration in machinery. But to return to what I was saying about experts, we may well be in difficulties owing to past errors, but it is no use raising criticisms about those errors now. What we have to consider is the future, and from what I have seen and from the experience which I have had with business people, I find a general recognition of the fact that after the first months of war, when there was necessarily some interruption, the machinery of the Board of Trade is working very well and traders in this country are getting all the encouragement for the export trade that they deserve.

I am sorry that the right hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood) is not in his place. He told me yesterday, and gave me permission to quote his statement, that he is completing a new factory and hopes to enter upon a stage of larger exports to America than he has ever had before. I asked him what was the position as regards raw materials, export licences, and so on, and he said, "The Board of Trade are treating me extremely well." The right hon. and gallant Gentleman was a very gallant supporter of this country in the last war. I believe that he will do just as gallant service in winning dollars for us in this war, as he did in stopping machine-gun bullets in the last war. Finally, before I leave the question of exports, I should like to say how much I appreciate what the Prime Minister said about the new organisation which, I believe, will be of great value.

Let me now turn to the question of prices and wages—a subject which certainly deserves examination if one is testing the record of Government. It is one of the most difficult questions of all and has been referred to constantly by critics of the Government. There have been complaints that the Government have failed to have any policy on their own problems, but I would ask the critics two questions: What would they have done if they had been in charge of policy? Do they appreciate what the Government have, in fact, done? I wonder what they would have done. Would they have tried to dig in at once on the position as it stood at the outbreak of the war and hold prices and wages on that line? If they had, they would have found it absolutely impossible. Freights and insurance had to go up, and the sterling dollar exchange could not be held where it was. Prices moreover were due to go up for other reasons. At the beginning of the war prices of many primary commodities were at a level too low to be really attractive to their producers. I have seen it argued in well reasoned treatises on the position that for a healthy economic position some "reflation" was needed, and that an increase of something like 30 per cent. was appropriate. That is about what has happened.

But let us turn to what the Government did. Here is a field where the Government have taken action of a courageous nature on a scale which I do not believe any British Government have attempted before. Indeed I do not know why the Government have not claimed more credit for what has been done—they certainly deserve a great deal more credit than has been given to them. We took advantage of our strong bargaining position—and it needed courage to treat it as a position of strength—we took advantage of being the most powerful buyers in the world, to make contracts for supplies of many vitally important commodities, for example non-ferrous metals, wool, and cocoa, which have secured our position as regards supplies of these essential materials, in most cases throughout the war, on terms representing either pre-war prices or a slight and justifiable appreciation on such prices. It seems to me that this was a very fine achievement, and it is going to be a tremendous help to us afterwards in dealing with the situation.

A great deal has been said about the rise in prices and the rise in the cost of living, but if one looks at the figures again I think it will be found that there is evidence which justifies paying a great tribute to what the Government have done. I will not weary the House with a lot of figures, and will refer to one table only from the statistics published by the Bank of England—the table of primary commodities. Here, starting from the new basis which takes prices on 19th August, 1939, as the datum line of 100, it will be found that the price index for all primary commodities in the United Kingdom has gone up from 100 to 128.8, and in the United States from 100 to 119.5. When we consider what we have had to suffer in the way of increased freight charges and war risk insurance on cargoes coming to this country, and that the sterling dollar exchange has depreciated by about 14 per cent., and then find that the index price of primary commodities of this country has increased only by 7½ per cent. more than in the United States, we must agree that it is a most remarkable performance, which reflects great credit on the courageous policy of the Government. Lastly, on this question of price policy, we have had the Chancellor of the Exchequer's statement, yesterday, indicating what the Government intend to do to hold the cost of living where it is.

Hon. Members opposite often seem to imply that the right thing to have done would have been to try to hold the level of prices and wages where they were at the beginning of the war. They all support or at least pay lip service to the doctrine that we should avoid the vicious spiral of rising wages and prices. But the point I have made this evening is that it would have been impossible to hold the line where it was at the beginning of the war. Now that certain things have been done to secure our position, and now that the first shock of the necessary rise in prices and a consequent rise in wages has been taken, we are in a position where it might be possible to dig in and hold that line. But it will be impossible to do that unless there is true co-operation in dealing with the wages question. It is going to be very difficult for any Government to deal with that unless there is co-operation from the other side, and I put it to hon. Members opposite that here is a great opportunity for them. Are they prepared to co-operate and help the Government to carry out the right policy—it is going to be an extremely difficult policy—the policy of holding values where they are and saving the effect of what must lead otherwise to a dangerous inflationary movement?

I do not want to suggest that what I have said covers the last word on the problem of prices and wages. In spite of what has been done in regard to securing supplies of primary commodities, we must all regret what has happened in the rise of the retail prices of foodstuffs. There, I would agree with something said by the hon. Lady who spoke from the other side. It is a matter which deserves serious inquiry to see whether the cost of distribution cannot be cut down still further, and whether the costs of imposing these controls, and working through the ordinary channels of distribution on the present basis, are as low as they may be. That is a matter which deserves consideration and may prevent the cost of living rising.

Before I sit down, I want to say a word on the direct proposal of the Motion which we are debating—the question of the machinery of government. The point I have been trying to make is that there is no established case that the machinery of government needs to be changed, but that if the machinery had to be changed, the particular proposal of the Motion is not suitable and will not produce anything like a decisive result. The issues in their practical aspects have been so fully covered by the Prime Minister that it would be absurd for me to enlarge on what he has said on the way in which the business is actually being carried on. I should like, however, to say something about the role of the Chancellor of the Exchequer in this matter. Having held a position of the same kind in another country, where, it is true, one had a Budget of only £120,000,000 a0 year, instead0 of £2,000,000,000 to £3,000,000,000 here, in which, nevertheless, one had to deal with wide and important problems, I should like to express an independent view, based on my own personal experience, that, if the Minister who is responsible for the finances of the country is not to be free to exercise his own functions, it will put him in an impossible position. Further, when it comes to questions affecting general economic policy, it is really the Minister responsible for the finances of the country who is primarily interested. From what has beer said this evening it seems to me that a great many Members hold the view that the function of the Treasury and the Chancellor of the Exchequer is nothing more than holding the purse-strings. They would regard the functions of the Treasury as limited to its budgetary functions. Yet I have often heard it put forward as a criticism of the Treasury in the months before the war that they were interpreting their role too narrowly as being limited in that way. It certainly goes much wider than that.

Consider what the Chancellor has to do to-day apart from raising and dealing with revenue. He is responsible for the currency policy of the country, for the was' in which the Exchange Equalisation Account is handled, and for the way in which loans are raised. He has to play on an instrument which affects the economic vitals of the country. We have long passed the day when we can regard the functions of the Chancellor as being limited to his merely saying "Yes" or "No" to expenditure. He should be interested in the economic policy of the country as a whole. Therefore, I venture to put forward the view that the arrangement which has been made is one which is consonant with the true functions of the Ministers concerned, and I believe that it represents a very interesting stage in the evolution of the machinery of our Government. The Chancellor himself seemed to be adopting a wider interpretation of his role when he introduced the War Budget of this year, for he spoke of his responsibilities as those of one who is using the machinery of his Department for mobilising the fullest possible use of the economic resources of the country. That seems to me to be undoubtedly the proper interpretation.

I want, greatly daring, to put forward one practical proposal in this matter. If the Chancellor is to be given this wider role, it may involve some extension of the recognised functions of the Treasury. The Treasury already occupies the position of being the one Department which is entitled to interfere with and supervise what every other Department is doing where financial considerations come in. I suggest that it might be a good move, a practical move and a move which would go further than anything else at this stage, to go one step further and to recognise that the Treasury has the right to be consulted on anything done by any other Department which affects the economic position of the country. If that were to be recognised, it might be a useful and practical addition to the machinery of Government if, parallel to the Financial Secretary to the Treasury, there were also an Economic Secretary to the Treasury with a suitable staff under him. If it is not desired to create a new post involving legislation, I suggest it would be worth consideration that the post of the Chancellor of the Duchy of Lancaster might be used to enable somebody to fulfil that function. If that were done, I believe it would meet a point which has often been felt and voiced in the House.

Many of us—I am certainly one of them—have felt in Debates when general economic issues are raised that we are very much limited by the departmentalisation of subjects. For example, when the question of unemployment arises and the Minister of Labour, or perhaps only the Parliamentary Secretary, is present, and we want to go down to the vitals of the problem and discuss something affecting foreign trade or the general economic position of the country, we are told that we are making a Board of Trade speech in a Ministry of Labour Debate, and no one is sitting on the Treasury Bench who is interested in the general economic issue. The Economic Secretary to the Treasury that I have proposed could always be there whenever economic questions came up in relation to other Departments, and I am sure that would be greatly appreciated in all quarters of the House.

Mr. Woodburn

Would the hon. Gentleman explain where his proposal for an economic minister under the Chancellor of the Exchequer co-ordinating the activities of the Departments differs from the principle in the Motion before the House?

Sir G. Schuster

I never mentioned the word "co-ordination." What I said was that it seemed to me right to recognise that the Treasury was entitled on any matter of policy proposed by another Department to express its view of what might be the economic reactions of that policy. After all, the Chancellor is in the long run the "deferred shareholder" in all these things. Anything that adversely affects the economic interests of the country must in the long run adversely affect his revenue and increase his problems. I was not suggesting that the Economic Secretary to the Treasury should be anything like an economic coordinator. My suggestion would leave the Treasury in the position of regulating and of insuring that the secondary economic reactions of policy were properly considered. It would not put the Chancellor in the position of a driving machine. One must look to the ordinary Departmental Ministers for that function. It is for them to supply the drive, and above all for the Prime Minister, who is, after all, the true co-ordinator, to be the driver in chief of everything.

As I have listened to this Debate, it has seemed to me that, if one follows to its logical conclusion what has been said, what is really behind the minds of those who have strong feelings on this matter is that it is the policy rather than the machinery of the Government which has not been adequate to the needs of the country. They seem to me to show a lack of confidence in those who are fulfilling the well recognised positions in the Government. If that is the position, it is one which I most whole-heartedly oppose. I have the most complete confidence in the Prime Minister, and if this Motion is to be interpreted as expressing a lack of confidence, I am doubly pleased to have put my name to the Amendment.

We have been discussing questions of machinery, of policy, and of execution. The one thing that really matters is execution—the "delivery of the goods." That is what I am interested in and what every person in the country is interested in. As long as the goods are delivered, I do not mind in what van they come, whether they come in a blue van, or a red van, or even in a Co-operative van. Indeed, if hon. Members opposite will genuinely co-operate, that will perhaps he the best van for us all.

8.20 p.m.

Mr. Barnes

The fact that I have the privilege of following the hon. Member for Walsall (Sir G. Schuster) rather suggests that on this occasion it is a Cooperative van that is delivering the goods. Whatever may be the purpose of the hon. Member's speech, I feel that towards the end of it he effectively destroyed the value of his own Amendment. His suggestion for the development of a branch of Treasury administration to cover this economic problem appears to be a clear admission of the difficulty which this Motion seeks to bring out. But whatever may be the result of the vote to-night, I am confident that this Debate will not settle the issue once and for all. The interest of the country in this aspect of the war problem is too deep and widespread to be settled by one Debate here. I would ask Ministers to try to measure the anxiety of the public by the main national position which confronts us after five months of war. The public do not look at the administration of the Government, especially in this field, in the detailed manner that the hon. Member for Walsall has done, and they do not judge it entirely from the banker's point of view. What the man-in-the-street sees is that after five months of war, after 1,250,000 able-bodied men, practically all of them in jobs, have been withdrawn from employment and absorbed into the fighting Services, no appreciable inroad has been made on the volume of unemployment, and that we still have 1,000,000 persons out of work.

It is all very well to talk about the financial administration of the Treasury, which is good as far as it goes, but that does not meet the point that the expenditure of the country has now mounted to £7,000,000 a day and that we are confronted with an industrial problem in which the main body of home industry is in a partial state of collapse—because obviously it is in a partial state of collapse if we have not absorbed those unemployed. That is the main position which the man-in-the-street is contemplating, and niceties of argument about whether this piece of Government machinery is functioning or not do not meet the main misgivings of the country on the economic problem. There seems to be a settled conviction that we should concentrate upon the export trade, and we have noted the satisfaction which even a partial restoration of the export trade has given to many hon. Members opposite, and yet they arc looking with more or less contentment upon the collapse of a large part of our home industry. I think that is wrong. In these circumstances I do not think the Chancellor of the Exchequer can hold down the prices of commodities, even with the expenditure of £1,000,000 a week which is being incurred in doing so at the moment. I would point out that while this policy of holding down prices, a policy with which I thoroughly agree, is "pegging" the staple foodstuffs, dozens of other articles are escaping that control and their prices are mounting week by week. "Unless the Government's policy can hold down the whole range of prices, there is hound sooner or later to he a break in the cost of production administration.

I wish to recall the House to the purpose of the Motion. The Motion does not of necessity criticise the existing machinery of the Government. It says that that machinery is not grappling with war-time conditions. I would remind the Secretary of the Overseas Trade Department, who is now representing the Government here, that under peace conditions the general body of industry runs of its own volition. It has no daily organic contact with the State. There is no machinery of Government to supervise it, direct it and wet-nurse it day by day. When we come to war conditions the Government interpose their authority over the general administration of industry, but do not accept responsibility for each unit or section of our industrial life. The Government create a machinery of commodity controls, but if we examine the administration we see that they are hot concerned with maintaining the life of any particular industry. They do not feel things with the same intensity as those are ordinarily engaged in running a particular industry. They are not concerned to maintain the output of an industry at 100 per cent., or to increase it to no or 120 per cent. We find invariably that those in charge of a com- modity-control scheme are concerned as to how they can get output down to go, 80, 70 or 60 per cent.

The Minister disagrees with me. I suggest that these commodity controls are working in watertight compartments. The Ministry of Mines is thinking in terms of coal, petrol, electricity and gas. The timber control is concerned with matters as they will affect the timber trade, and the wood pulp for the newspaper industry and paper milling. It is the same in the case of wool and cotton in the textile industry. There is no connection or co-ordination between the various commodity controls. The Prime Minister, in dealing with this problem, indicated clearly that the whole purpose of the coordination effected within the Government scheme was to determine priorities in the allocation of different supplies, to say whether the Admiralty had the first call, or the Air Force, or the Army, and from the point of prosecuting the war no one would disagree with that, but the point I am making is that we can see clearly that there is no provision for looking at the economic life of the country as a whole. That is the point that we are anxious to stress at the present moment. We have not only these commodity controls, but there are the watertight and separate Departmental Ministries.

Let us consider the Chancellor of the Exchequer. I did not detect in the speech of any hon. Member on these benches, nor in the remarks of the right hon. Gentleman the Member for South Hackney (Mr. H. Morrison), one comment suggesting that the authority of the Chancellor of the Exchequer over financial determinations would be impaired by a proposal of this kind. In what way would the Chancellor's ultimate decision be affected if we had a Minister in the War Cabinet whose job was to look, in a collective and corporate way, over those commodity controls, balancing home industries and the necessity for the export trade? We cannot scrap home industries entirely for the sake either of the prosecution of the war or for the purposes of our export trade. It is no use destroying your home market for the purpose of winning a foreign market. I see the right hon. Gentleman the Secretary to the Overseas Trade Department laughing; if that is the attitude of the Government, I do not wonder at some of the tangles into which industry gets from time to time. If one looks at industry, one sees instances of many industries which men have built up over the whole of their lives being destroyed in a few weeks; and we have nothing but ridicule from a member of the Government, in the midst of a serious Debate. If we examine the effect of commodity control, and the general effect on home industry that has prevailed so far, we can see the necessity for some Minister of the Crown to co-ordinate all those activities.

We come to the problem of shipping. The hon. Member for Jarrow (Miss Wilkinson) pointed out the plight which the Government's policy of a few months ago has already produced in this country in regard to shipping. It is true that the Admiralty are to assume responsibility for the whole of our shipbuilding programme, and I suppose that is a move that will find general commendation; but what assurances have we that excessive and abnormal efforts will be made so to increase the carrying capacity of the shipping available to this country that we can meet any expansion of trade from whatever direction it may come? That is a point which I want to emphasise very strongly indeed. The whole policy of the Government should be to expand trade in every possible direction for the purpose of meeting and spreading the burden of finance at the present time.

As I see the proposal which has been advanced from the Front Opposition Bench, it is not one to interfere or undermine in any way the strength of the Chancellor's position in the Administration. I should think it would be a commonsense proposal for the Prime Minister, the Chancellor, and the War Cabinet to have a colleague sitting with them who was able to take a wide sweep of all these commodity controls, to balance them, make himself familiar with the requirements of the home, the export, and the war organisation efforts, and to whom the Prime Minister, the Chancellor and the War Cabinet could look. He would be a Minister who could give the right amount of preparatory examination to matters and who would keep in touch with all the machinery of the economic advisory council, the co-ordination of finance Departments, and so on. He would be able to listen to departmental points of view and prepare the arguments for and against. He would bring them to the notice of the Chancellor and so relieve him of having to go through the process of making himself acquainted with the arguments for and against.

It is a dangerous position for us to get into for the Chancellor of the Exchequer to be diverted from consideration of the main financial problems, which are overwhelming in themselves, in order that he might examine a case made out by departmental heads or into a difference between Departments in matters of priority; or it may be in regard to the purchase of a consignment of goods in this or that country. There is everything to be said for having in the War Cabinet a Minister who will do all that deviling work and bring forward the arguments for and against, so that the Chancellor and the War Cabinet can reach a decision.

That method is adopted in business organisations. To say that to appoint a person to carry through preparatory work and to submit to a board of directors or to a managing director a case for decision is undermining the Administration, is just nonsense. After all, the business and financial strength of this country was built upon that method, and I fail to see how the method and the rule are upset when you apply them to a Government Department and to the national Administration. The Government, in war-time, step in and supersede industrial administration. To assume that the Chancellor can go into all matters adequately under present conditions, and come to important decisions, is straining the credulity of the House. It would be far more sensible if the House of Commons made itself the vehicle of a commonsense public demand and requested the Government to give this matter their serious consideration. I am convinced that when that is done we shall see the war effort on the economic side, not run now with smoothness. running with greater smoothness than it is at the present time.

Mr. Deputy-Speaker (Colonel Clifton Brown)

Sir Granville Gibson.

Sir Granville Gibson


Mr. Boothby

On a point of Order. Certain Members of this House have sat here continuously throughout the Debate. Is it in order for a Government Whip to be despatched at a critical moment to fetch in speakers who are more to the liking of the Government than those who may speak in this Debate?

Mr. Deputy-Speaker

It may be true that Government Whips have been sent out, but it is the duty of the Chair to see that the Debate is carried on, and the Clair has no control over what is done by the Whips. That is not a point of Order.

8.40 p.m.

Sir G. Gibson

I have quite a clear conscience in this matter, because I have not been fetched in. The reason I rise to speak for a few moments in support of the Amendment is that I welcome very much the statement of the Prime Minister to-day. Something which has not been referred to a great deal is the appointment of the proposed Export Council. I believe it is one of the most tremendous decisions taken by the Prime Minister since 3rd September, and I welcome it personally and also as President of the Association of British Chambers of Commerce on behalf of many thousands of firms throughout the country. I see that one lion. Member on my left is smiling. There are thousands of firms in this country who will welcome heartily the decision of the Prime Minister; not that we Lave and particular objection to the Motion which has been moved by the Opposition for the appointment of a War Cabinet Minister, but what we have in mind is the important question of principle on the part of the Government, and it there is at the head of the Board of Trade a man with outstanding personality. drive and energy, such as Sir Andrew Duncan possesses, we are satisfied that there will go to the work of the Export Council that energy and initiative which will achieve all we would desire, as though he had a seat in the War Cabinet.

This suggestion of the Prime Minister for the appointment of the Export Council is definitely a step in the right direction. The Association of British Chambers of Commerce has been pressing for something of this kind in the last two or three years, and although I do not suggest that the Government have made their announcement to-day because we have been pressing, at any rate it gives us the opportunity to say how gratified we are that the Government have an- nounced their decision to-day, and they may rest assured that they will have the support of the bulk of the industrialists of this country. We are also glad of the appointment of Sir Andrew Duncan as the President of the Board of Trade. He is a man who has a fine industrial background, and the record of his work, initiative and drive in connection with the iron and steel industry is such as will give a new lease of life to the industrial organisation to which he has been brought. I have no personal connections with that industry but I have been told this by those who are connected with it. While he may have no seat in the War Cabinet I should not be surprised if one of these days he found himself there, and, if so, we would be glad. The right hon. Gentleman the Member for South Hackney (Mr. H. Morrison) said that priorities are a matter of concern and that drive and decision are needed. I am satisfied that the President of the Board of Trade through this Export Council will bring to bear the drive and initiative which are necessary in order to improve our exports.

I was rather surprised to hear the statement of the Prime Minister to the effect that our difficulties are not in getting export orders but in filling them. I have no doubt that that obtains in certain industries, such as metallurgy and so on, but there are some industries to which it does not apply and where there is a definite dearth of orders on the export account at the present time. One must not overlook the fact that to-day we have at least seven countries to whom we cannot export and to whom we could export in pre-war days. It is difficult to export to-day to Estonia, Latvia, Lithuania, Finland, Poland and CzechoSlovakia, and to all intents and purposes for the duration of the war these markets are closed to us, which means a tremendour loss of many millions of pounds. One wonders where we shall take up that slackness. There may be some openings in South America, but I have been wondering whether there could be some more quid pro quo on the part of our Dominions. Canada is delivering millions of pounds worth of munitions and surely in her days of prosperity in respect of her exports there is no reason why she should not open the door a little wider in order to allow some of our exports into Canada. The same applies to New Zealand. I know that in respect of her imports from this country and from other countries she imposes restrictions for the sake of her currency. Surely that does not hold good to-day because we are purchasing enormous quantities of her primary exports and there is not the danger to her currency. Therefore, there is no reason why New Zealand should not open the door a little wider to our exports.

I hope this new Export Council will not neglect the opportunities of taking advantage of the great experience of the exporting houses in this country. I know that in some directions there are fears that part of the Government's policy is to cut out the middleman, but we must not overlook the fact that in large centres in this country, and particularly in London, there are thousands of firms who through generations have built up a knowledge and experience of export trade which is not possessed by thousands of manufacturing firms in the country. I know it in connection with the Chambers of Commerce in London, Glasgow, Liverpool and Manchester. I know they have export departments dealing with the question of exports only, with permanent staffs which can give very valuable assistance and who would be glad to give it to the new President of the Board of Trade.

I am satisfied that if traders are encouraged or pressed to do more export trade they will rise to the occasion, but it is necessary that the Government should stand behind them. Anyone who takes part in export trade knows the great difficulty there is in receiving payment for the goods they export, and if there are to be greater exports to those countries which, to say the least, are unsafe, the Government must stand behind those firms and assist them with regard to payments and finance. Take the case of the exports to Czecho-Slovakia, with regard to which a Bill has just passed through this House. There were payments to all the financial interests but nothing to the poor traders who exported their goods to Czecho-Slovakia. The explanation given was that there was no food and that these firms were insolvent. The city of Prague is not insolvent, but the financial commitments have all been met by the Government; yet nothing has been done for the poor traders of this country. I may not be in order and this may be better left to discussion next week with regard to the Anglo-Turkish Agreement. I notice, Mr. Speaker, that you are about to call me to order but I have now said all I wanted to say upon that point.

Just as the Government art placing enormous orders in various parts of the Empire there must be that inclination on the part of the Dominions who are benefiting from these orders to open the door a little wider in order to take more of our exports. Finally, I desire to congratulate the Government on bringing into being this Export Council, which incorporates almost entirely the desires and wishes of the Chambers of Commerce. I remember that it is two years since we passed on to the Government the report on export trade of a committee which sat under Sir Cecil Weir, who, I believe, is the Commissioner for the West of Scotland. The prospects of our export trade were dealt with very comprehensively, and suggestions were made to the Government as to how they could improve that trade. I am very gratified to-night to find that those expressions of opinion have, in the main, been accepted by His Majesty's Government.

Mr. Loftus

The hon. Gentleman made an appeal to New Zealand to take more of our goods. Would he, in return, be in favour of our modifying the rather harsh terms of the last New Zealand loan?

8.51 p.m.

Mr. A. Edwards

I was very interested in the Prime Minister's speech, but I noticed that he dodged the main issue of the Debate; he did not attempt to deal with the present defects. The hon. Member for Walsall (Sir G. Schuster) started by giving considerable support to the Prime Minister, but ended by proving the case for the Motion. He proved that there is a necessity for such a Ministry. But all he wanted to do was to put the burden on the Chancellor of tae Exchequer, who has confessed that he has already far more than he can manage.

The Chancellor of the Exchequer (Sir John Simon)


Mr. Edwards

If the right hon. Gentleman has not confessed it, others have done so for him. Perhaps he is like another superman, who simply cannot be overloaded, who goes on accepting post after post, and has now, as the Prime Minister announced to-day, accepted another. The Prime Minister paid a tribute to this superman and to the great ac vice that he has given. He gave the impression that the Cabinet are constantly running backwards and forwards consulting this superman. If we wanted any proof that such a man should be in the Cabinet, the Prime Minister has given it to us to-day. If such a man is so essential, the place for him, if he exists, is inside the Cabinet, and not outside.

Everybody who has had contact with the various Departments knows that there is no economic outlook among the people who make the decisions. The main decisions are taken long before they reach the Cabinet, and when you come into contact with the people who make them you lose faith. In any case, these men have enough to do in looking after their own jobs. A case has been made out to-day for the appointment of someone who will do nothing else but look out for the economic defects in the organisation of the various Departments. The hon. Member for Walsall said that it was no use talking about the mistakes of the past, and referred to the lack of vision of his own Government in not providing an adequate stock of raw materials. That is perfectly true. The Government carry a terrible responsibility for that. It is useful to refer to it only if doing so will help us not to make further mistakes. But the very men who have been brought in to important positions are those who have made those mistakes. How are we to be sure that they are not going to repeat those mistakes?

The Prime Minister said that the reason why he agreed to set up the Ministry of Supply was that the Territorial Army had been doubled, and not that the Opposition pressed for it. Will the Chancellor of the Exchequer deny that we have doubled our expenditure? If it is necessary to have a. Ministry of Supply because we have doubled our Territorial Army, I am sure that it is equally necessary to have an economic Department in the Government because we have more than doubled our expenditure. The gentleman who has just been appointed to give us shipbuilding security is the gentleman who, above all others is responsible for creating shipbuilding insecurity. That was one of the greatest crimes committed in this country. In my constituency, one of the finest shipbuilding districts in the country, there is not a shipyard left in the whole length of the river, because that gentleman put them all out of business for 40 years. What would the Government give to have those shipyards now? They would give a great deal. That is the gentleman who is coming in to take charge of our shipbuilding security. I think we should be quite sure that the mentality which established the insecurity is going to have some kind of supervision.

Let us now take the case of a gentleman who is coming into this House. I pay tribute to Sir Andrew Duncan, who is, I think, one of the greatest industrialists we have in this country, or have ever had. He has done a magnificent job, but he is one of the gentlemen who got this Government to refuse the suggestions of those of us who wanted them to keep our blast furnaces going, on the grounds that we might want pig iron some day. We were told that there was plenty of pig iron and steel. Now we are asking America to ship quantities of iron and steel across that treacherous ocean. [An HON. MEMBER: "They were selling it to Germany."] Yes, they allowed a great deal of our production to go to Germany, and at the same time they put 26.of our blast furnaces idle, when Germany was threatening war against the British Empire. I have every confidence in Sir Andrew Duncan, but I want to be sure that he has a different economic outlook from that narrow outlook which governed the iron and steel industry then. What would the Government give to-day to have the ships free that are bringing iron and steel to this country? I agree to cut out the past, but let us be sure that there is someone now taking this wider economic view of the needs of the nation. If not, these gentlemen, as individualists, will lose us the war.

Take another thing which is a really vital economic issue, the location of industry. That is a matter in which some of us have been interested for some time, and it has been threshed out at considerable length. At the beginning of last year I asked the Government whether they intended to allow the Port of London Authority to containue the £10,000,000 scheme to extend the docks of London. The reply was that that was a matter solely within the discretion of the Port of London Authority. Why? Would anyone with vision and an economic outlook have allowed that to happen? Now we wish to develop our ports on the West Coast. We wish we had not so many docks on the Thames. We want to be sure now that there is someone looking after this whole vast field of economics and that we are not going to continue to make these blunders.

There is the question of the production of oil from coal. What would be the position if we really became involved in warfare which needed 30,000,000 tons of oil a year? Supposing we reached some consumption like that and had to keep our tankers going and have the Navy to convoy them, would anyone on the benches opposite think that that was not a matter of public interest? When the war was developing you appointed a committee to ascertain which was the best form of producing oil from coal. The Labour party published a report of all that could be known about it, or is likely to be known about it. We included information from all the experts we could find and we put it in that report. But the Government appointed another committee who put their pride and profit before the safety of the nation and issued a thoroughly dishonest report. We warned the Government before it came out. We offered, and I offered myself personally, to go before that committee to give evidence—and we had a good deal of evidence—and they refused it. They heard evidence from people who did not want to produce oil from coal because they were making plenty of profit out of the importation of oil. It is human nature perhaps, but it was a lack of vision on the part of the Government not to call upon people who had studied this problem and would put their services at their disposal.

I want to be sure that from now on there is to be a real development. We have the greatest oil deposits in the world in this country in solid form, all of which can be converted into oil. The right hon. Gentleman who was appointed the first Minister for the Co-ordination of Defence, in answering a Question, said that the Government were not satisfied that the production of oil from coal was an economic proposition. Was that an economic outlook from the point of view of the safety of this nation? He meant that you could not produce oil from coal in this country and make a profit out of it against the people who were importing oil. Of course, we could not. Did not we try to visualise the possibility of another war with hundreds of tankers crossing the sea and being attacked by submarines? Now that the war has begun, the price of oil is going up. That is what the Government failed to look at. That is why I want to be sure that we have some competent authorities to think about this question day and night.

Then there is the question of the location of industry, the report upon which was issued yesterday, and which it would repay every Member of this House to read and think about. There are some interesting decisions in that report. I have just had the pleasure of visiting America. An hon. Member to-night has spoken about the neutrals not giving us vocal support. What is vocal support going to do to help us to win the war? At least one right hon. Member of this House is in America—The Prime Minister should call him home, or put him in a detention camp—going round telling the Americans what they ought to do, and he is doing this country more harm than perhaps he can imagine. Why should this country tell America what they ought to do? [Interruption.] That right hon. Gentleman is a menace to this country. America to-day is doing a good service to this country. Where would we be if we could not get her supplies, or if she refused us?

There are at present representatives of three Departments in America competing with one another for American goods. Is that economic co-ordination? They are chasing round America competing with one another for things that are essential, and when they are delivered to this country they come before the particular committee which decides who is to have priority. Is that vision and economic planning? It may not be a serious thing and can probably be quickly remedied, but the point is that there is no one acting on behalf of the Government either in or out of the Cabinet.

I do not think that we should overestimate the position with regard to exports. I agree that we want all the currency we can get, but I do not want recklessly to use the materials which are needed in this country merely for the purpose of exporting goods abroad. There are two sides to that question, and we should not hastily con- sent to the demand for greater exports. We have to consider the things that we need to keep in this country, and it may be necessary to store them in this colt-10y rather than to export them. This is a technical problem but it is a vital one. It would be a great thing if some competent authority were thinking about these things. Let me tell the House of another interesting fact which happened in America, and economists with a wide vision would have seen this. In the particular centre of America where they produce machine tools six of the most important firms are selling their entire output to Russia by contract. I think that somebody, if they had not been too busy doing so many other jobs, might have had an eye on that situation many months ago, and we would not, now that we have entered this war, have had to deal with a problem of that character.

There is another matter which has to do with economics and with one of the particular Ministries which is at the moment competing with another Ministry for the supply of American goods. A manufacturer came to me and said, "Not long ago I could go to Berkeley Square and see every Department that I needed to see, and now I have to go down to Devon and up to Yorkshire, and I spend all my time motoring round in order to see Tom, Dick or Harry, and I have not time to get on with my work of production." Is that a sensible and sound arrangement? When are these people going to get back to their jobs or to some place where people can get into contact with them instead of having to go gallivanting around the countryside looking them up? No one with economic vision would tolerate a situation like that for a week.

When the Prime Minister assures us that everything in the garden is lovely, I hope that he will pay some consideration to these points, and let him not be too hasty, but remember the point that he made, that he accepted the Ministry of Supply because of the doubling of the Territorial Army, and let him ask himself whether it would not be a good reason, when doubling our spending, to have an economic Minister instead of having to run backwards and forwards to these economic experts asking their opinion on this or that matter. Why not use the services of the great man—and I believe that he is a great man—whom the Prime Minister has appointed? Someone has referred to him as an Archangel to-night, but he is a great man and he is not far away from us now. If that man is all that the Prime Minister claims him to be why should he not take full advantage of his services? When any important decision is made he could tell the Government at once the effect of this or that policy on the Department. That is lacking to-day, and it is something which I hope the Government will accept sooner rather than later.

9.11 p.m.

Commander King-Hall

. I hope the hon. Member for East Middlesbrough (Mr. A. Edwards) will forgive me if I do not follow him in the wide survey he has just made of the economic problems of the war. Another reason I hope I shall be forgiven for not following him is that I think a new Member like myself should intervene in a Debate of this importance only for a few minutes. What I want to say will be said with the utmost brevity and despatch. The first point I want to make is to oppose the Motion put down by the Opposition, although not for reasons which commend themselves to all hon. Members on this side of the House. I oppose the Motion because if it was accepted by the Government, it would be aggravating the present state of affairs. I have studied the Motion carefully, and I find that the functions which this Minister would be called upon to perform would be of two kinds. One is apparently that he would be the head of a planning Department to plan the resources of the nation, which go far beyond economics, and that as part of that plan lie would be concerned with the requirements of the civil population. I submit that this is a loosely worded Motion and seems to reflect a certain confusion of thought as to the kind of executive machine which would be needed for the proper conduct of totalitarian war. Furthermore, it makes a distinction between the civil population and, I suppose, by inference, the fighting population, and I think it is a dangerous distinction to make.

In this Motion one can see signs of that fatal confusion of thought between the functions of administration and supply and those of operation, which are the root of all evils in the conduct of war. I would like to support most strongly the remarks made by the right hon. Gen- tleman the Member for Sparkbrook (Mr. Amery) in pointing out the dangers of this error in confusing administration with supply and operation. It is a fatal error to tell a man to supply or administer something and at the same time give him responsibility for its use. One responsibility will swamp the other, and I think it will be found that responsibility of administration will eclipse that of operation. But policy can take refuge in "wait and see." This is but natural, as administration has to go on. Administration deals with concrete matters, but operation of policy involves abstract matters, and most people prefer concrete thinking rather than dealing with the abstract. The complexity of administration is such that I think it extremely difficult for a prospective Minister to see beyond his "In" basket into the limitless areas of time or space in which policy has to be worked out.

In the few remaining minutes during which I shall detain the House, I should like to put before hon. Members a few items of evidence in support of these views. The first item of evidence, which is rather a personal one, dates back 15 years, when I had the great privilege of suddenly being sent for by Lord Haldane, who happened to have read something I had written. He said to me, "One day this country may be at war again. I shall not live to see it, but you may be concerned with the matter. I have therefore sent for you in order to give you my view on the problems which arise on the higher conduct of war." I was a young naval lieutenant at the time and was thrilled to be given the opportunity of listening for an hour to words of wisdom by a man who, I maintain, was the greatest Secretary of State for War this country ever had. Lord Haldane explained to me that in great wars the most difficult problem is that of separating-the business of thinking, and of forming strategical conceptions, from the business of supplying and creating all the material things which are needed in the conduct of war.

My second piece of evidence comes from a report of the War Cabinet for 1917 (Command Paper 9005) where reference is made to the need for the institution of the War Cabinet system in order to give that resolute central direction which became more imperative the more the population and resources of the nation had to be organised for a single purpose—the defeat of German militarism. That was a task on which we were engaged 25 years ago, and if that system was needed in 1917 to undertake precisely the same task with which we are faced to-day, one cannot help asking the question: If it was needed them, is it not needed now? I do not know whether the Chancellor of the Exchequer, who is to wind up the Debate, can ease my own and other hon. Members' minds by giving us an answer to that question. Finally, speaking in another place on 19th June, 1918, Lord Curzon, in a Debate on the report of the War Cabinet for 1917, reviewed the story of how and why it came into being. After pointing out that its members began with five, then became seven, and then stabilised at six, he said, "The Ministers who were appointed to it were deliberately chosen because for the most part they were without portfolio; they were therefore freed from the general administrative work and were regarded as more likely to be able to devote their whole energy to the prosecution of the task with which they were charged"—the supreme direction of the war.

In conclusion, I come back to the point of economic warfare in totalitarian war. At present the Chancellor of the Exchequer has the responsibility for over looking and directing our economic effort. If the Motion were adopted, it seems to me certain that there would be a conflict of views between the Chancellor and the Economic Minister who might he appointed. So long as the Motion does not cover the whole question of the reorganisation of the War Cabinet, that is another reason why I cannot support it. If, and when, reorganisation takes place in the direction of making; the War Cabinet less of a departmental body, it will be necessary to consider the position of the Treasury in that Cabinet. If hon. Members care to take the trouble to examine an important but sadly neglected State document of 1918 (Command Paper 9230), dealing with the report by Lord Haldane on the reconstruction of the Government after the war, they will find there an interesting analysis of the functions of the Treasury. The report discusses the whole question which has been debated this evening of the functions of the Chancellor of the Exchequer, and says among other things: Thoughout a long period of years the conviction appears to have grown that it is essential to a sound system of finance that the Minister responsible for raising the revenue should also have a predominant voice in deciding the amount, and in some degree on the character of the expenditure, that, if he is to he held responsible for filling the reservoir and maintaining a certain depth of water in it, he must also be in a position to regulate the outflow. The report discusses this matter at some length, and in the end definitely comes down on the side of the existing practice. It may be all very well in peace, but I think we must, at any rate, keep an open mind as to whether in war it is possible for the same person to be responsible for the provision of finance and also for its use. In time of war we may find ourselves driven to the necessity that the prime function of the Treasury is that of being a Ministry of Supply of financial resources and, if this is correct, the Minister in charge of that function should net be burdened with the business of both producing those resources and being responsible for directing them against the enemy, because, if you permit that, you are back again at that confusion of functions, between administration of supply on the one hand and operations on the other, which I think is public mistake No. t in the business of Government. If there is anything in the charge that the Government have not yet created the best machinery possible for the supreme direction of the war, the Motion shows that those who put it down are also guilty of being half-way-house men, and, therefore, I think the Motion is to be rejected. Although I shall certainly vote against it, I do not think that that means that one need necessarily vote for the Amendment, which seems in the last paragraph to miss the point completely. The problem is not to strengthen still further the economic position of the country. The economic strength of the country is something which is already inherent in the community. What is required is a relentless effort to concentrate and direct that economic strength against the enemy, and of proposals of that character I can find nothing in the Amendment. It seems to me that the proper thing to do is to vote against the Motion and to abstain from supporting the Amendment.

9.23 p.m.

Mr. Hammersley

There are two fundamental propositions concerning the conduct of the war which I should like to put to the House, and which I doubt if any one would wish to controvert. The first is that the unprecedented unity of purpose which was displayed when war broke out must be maintained. The second is what the sacrifices which war imposes must be equitably spread. These essential considerations must be constantly before the War Cabinet, and any Government which neglects those functions will do so at its peril. We are fortunate that so far as we have gone the national will has been maintained and the unanimity of the masses in respect of the conduct of the war is constantly reinforced. Unless we make very great mistakes, we shall not need to fear the weakening of the national will in respect of the conflict in which we are engaged. The danger lies in the apprehension, which is beginning to make itself felt already, that war, which is a ghastly business and which ought to make worse circumstances for every one, may bring better circumstances for some and increased hardships for others. The burdens which up to now have been imposed upon the community have been borne with fortitude and resolution, but the burden of the war, owing to circumstances which very few of us expected, has not been fully imposed. Are we all confident that when the burden of the war is fully imposed, and all the effects of the war are being shown, we shall be able to go to our constituents and say to them that every section and every class of the community is bearing its proper share of the burden of carrying on the war?

If we cannot be confident of that, we cannot be confident that the inherent unity of the nation will remain unimpaired. Although our purpose may remain the same, the means to effect it will be weakened. In my opinion the key to the successful conduct of the war lies in the phrase "Equality of sacrifice." There is no sacrifice which you could ask the British people to bear which they will not bear uncomplainingly and on the whole cheerfully if they feel that the sacrifices they are asked to bear are sacrifices which will help the country as a whole and not particular individuals in the country. Every man desires that the burden that he is asked to support should be asked in something like the same measure of his neighbour but, if he knows, or thinks he knows, that the wheel of chance may bring higher wages to his neighbour, and perhaps greater hardship to another neighbour who is in similar circumstances, he feels dispirited, resentful and disgruntled. [Interruption.] I know of a case in which a whole organisation is greatly upset because one of the workers has been able to go to a nearby aeroplane factory and has come back with wages nearly twice as much as he formerly obtained. His colleagues wonder, in my opinion rightly, why circumstances should be allowed to exist which will almost double that man's wages under conditions in which he has worked no harder and shown no special skill. It is the accumulation of incidents of this character, which can be multiplied thousands of times, that is adding an impetus to the situation which is beginning to develop of demands for higher wages in most basic industries. If I am right—I doubt if there is any difference of opinion on the matter—our great need is a policy to carry out the principle of equality of sacrifice. [Interruption.] I am glad that I have one supporter on the Benches opposite. He is a most vocal supporter, but perhaps my speech might benefit in cogency if his support were not so continuous.

Mr. Walker

Do not be discouraged.

Mr. Hammersley

The other day, M. Daladier expressed excellently the idea which I am trying to put in this form, when he said that the sons of France, when they left for the front, accepted a complete transformation of their lives, and that those behind, who did not have to endure either the same sufferings or the same dangers, must be prepared to do likewise. The question of equality of sacrifice is one that we shall all have to face, and we shall not achieve it merely by talking about it. It can be achieved only by a definite policy and such a policy will not spring automatically from the creation of a new Minister, whether he be called a Minister for the Co-ordination of Economic Policy, or not. In my opinion, the conduct of the war is suffering from too many, and not too few, co-ordinating committees. One question after another which requires an immediate answer is sent to the various coordinating committees. They arrive in the co-ordinating committees and they remain there, because it is nobody's particular business to insist on an answer.

A striking example of what I am saying is to be found in the Ministry of Supply. The Army makes demands for supplies, the specifications and designs of which are in many instances so far divorced from the usual commercial practices of the country that they themselves, by their own specifications, are putting almost insuperable barriers in the way of adequate deliveries. The Ministry of Supply, which is, of course, in closer touch with the manufacturers, knows of the difficulties. The matter is put to the co-ordinating committees, but the coordinating committees do nothing. In my opinion, the delay in the co-ordinating committees is one of the factors which ought to be removed if we are to facilitate the conduct of the war. It is important that there should be a member of the Government, free of Departmental responsibility, to look into these matters, but I doubt whether we should get a solution of the problems by setting up a co-ordinating Minister for War Economy. What is vital in the war is decision, and it is essential at this stage that we should have a decision on policy. When there has been a decision on policy, the coordination will be simple. Without a decision on policy, no amount of co-ordination will avail.

How can we obtain an agreed policy of equality of sacrifice? I agree that the difficulties are enormous, but I am going to make my suggestion. The degree of sacrifice can very frequently be brought down to a matter of opinion, and unless the nation's affairs are conducted with great statesmanship, we may arrive at a position in which one section of the community thinks that it is making all the sacrifices and another section of the community takes the opposite view. However, we are not without some guide in this very difficult task. One fact stands out like a lighthouse. We cannot have equality of sacrifice and at the same time have inflation. On that issue all economists are agreed, and we have the bitter example of the last war. Inflation can be avoided only if we consume less, produce more, tax more, and save more. Here, in my opinion, is the crux of the whole problem. Who is to consume less, who is to produce more, who is to be taxed more, and who is to save more? If these burdens are placed on the right shoulders, we shall have a proper policy of equality of sacrifice.

How can the Government advance such a policy? Candidly, in my opinion it would be very difficult for the Government, by themselves, to advance such a policy. Any plan produced on the undivided responsibility of the Government can be sniped at by the Opposition parties. I am not suggesting that in time of war hon. Members opposite would indulge in factious opposition, but unless agreement on policy can be obtained beforehand, then the representatives of labour will have a very easy task. They can say of any plan, however drastic, that it does not fulfil their requirements. How easy it will be for them to say, "Agitate for more wages; if you do not, then you will suffer, and the rich will prosper." Those are slogans which are very difficult to resist, but it is our duty to see that they shall be resisted. What a fruitful ground for agitation is indicated by that kind of slogan, and yet such agitation represents the high road to inflation and no one will lose more by inflation than organised labour.

Therefore, it is essential, in my judgment, that the Government should formally seek the co-operation of the Opposition in agreement on a policy of equal sacrifice. All the data for the formulation of such a policy exists. These various co-ordinating committees are in a position to put all the facts and figures before the Government and have, I imagine, already done so. There need be no dispute on essential facts. Yesterday the Chancellor of the Exchequer announced a tentative policy for the stabilisation of the cost of living. What the country wants to know is to what extent is this policy temporary or permanent; to what extent will increased taxation be required; can we rely on voluntary savings or will enforced savings be necessary, and to what extent must export trade be stimulated in order to get foreign exchange? These are all matters which must be considered if we are to conduct the war to a successful issue. They must be considered in an impartial atmosphere. They cannot be considered properly in a party atmosphere. The economic education of the people has so far advanced since the last war that with wise leadership the differences can be boiled down to a little bit more here or a little bit less there from the total pool of the nation's resources. There need be no dispute about workers with low wages or with family responsibilities who can be classified as being on subsistence level. Their standard of living should not be touched. I do not think the nation requires or would be willing to lower the standard of living of the lowest paid.

In my opinion, not only should the Opposition share in bringing about an agreed policy, but they should also share in carrying out that policy. If they did so the nation as a whole would rejoice. But if they do not take that view, if they prefer the comfortable position of being able to criticise whatever is done, then the Government must impose a policy of their own. I should be sorry if they imposed a policy before having fully explored the possibility of agreement on these important questions of work and wages. One thing is certain. The country cannot afford the present position of being without a known policy on work and wages. If the nation is to pull its weight, it must know what policy is to be imposed, in relation to work, wages and taxation. Without such knowledge, discussions on economics are merely threshing the air. With an agreed policy of equal sacrifice, the morale of the nation will be so reinforced, that we can look to the future with confidence.

9.40 p.m.

Mr. Harold Macmillan

Some observations which fell from an hon. Member summed up the general opinion of the House on this Debate, when he observed that he found himself in support of the Amendment, while he had no particular objection to the Motion. At the moment we are still discussing the Amendment, and the Amendment is an example, perhaps, of how lasting are the traditions of this House. It is the kind of Amendment to which many of us have become accustomed after many years. When a certain amount of agitation on any question in the newspapers or in the party has taken place, the Government find discreet and loyal supporters, on whom they can rely, who will place their names to an Amendment of this kind. The only novel feature I have observed is that both the Seconder and the Mover absented themselves from the House during the remainder of the Debate. The Mover of the Amendment made a very agreeable speech—one might almost call him a pro- fessional Mover of Amendments of this kind. He moved the Amendment rather in the way of a man proposing the toast of the guests. He gave what is called satisfaction all round. The Seconder, of course, found himself in rather a different position. I must congratulate the Chief Whip on finding the hon. Member for Walsall (Sir G. Schuster) for this job. It was something of a scoop. All the time I was interested to find out how he proposed to extricate himself from the difficult position in which he was placed, but he was a miracle of skill. He said he had been a strong critic of the Government, practically the whole time he had sat in the House, and that he had criticised the Government because, before the war there had been no provision of stores, and that the Government had been wicked enough to raise the price of money by raising the Bank Rate, although it was true that it had fallen since. To sum up, he seemed to regard the Government in the kind of way that a temperance enthusiast might regard a reformed drunkard. That might have got him out of his difficulty, but it does not get the country out of its difficulty.

I am bound to say that to-day's Debate has not been altogether satisfactory to any Member of this House. The Prime Minister with great agility proved to us that the machinery suggested in the Motion would not necessarily add to the facility with which public business is carried on. It is very difficult for one who has not had the opportunity of taking part in even the humblest administration not to accept a statement of that kind from one of so great experience. I think he was a little disingenuous in the method in which he presented his case, for he almost rivalled the innocence of Arr. Balfour. "I find all this" he said, "very confusing." He made a number of objections, one of which was that the Minister would not be able to answer the questions, that it would not be a good thing to have anybody in the War Cabinet who knew anything about economics, and that it would probably do more harm than good. I do not know whether Lord Chatfield has done more harm than good. The weakness of the Prime Minister's case was, I think, that he proved too much. But I, without any knowledge or experience of administration in the Government, can only accept his view. But if the whole machine is absolutely perfect, as he said it was, and there is no need for a change, the horrid thought suggests itself that if the machine has been perfect for all these years, and has been perfect since 1931, then why has our diplomacy failed and why have we entered into the greatest war with deplorably weak armaments and without credit and power to borrow in any country in the world? The horrible suggestion occurs to us whether, if the machinery is there, there can be something wrong in the operating of the machine.

In point of fact, we all know that this is another of those occasions in which the Government will protest that they are fighting to the last ditch. Then their most loyal supporters are convinced that it is quite all right to have made the speeches they have made, and then they will find in the papers that the Government have given in. It is the same story as that of the Minister of Supply, National Service, and the Ministry of Defence. Over and over again the Government have protested that it was a useless suggestion, that it would impede and put sand in the wheels, and then, curiously enough, they have accepted it. It is not good enough to say that they had to change their whole ground in these matters because the foreign situation has deteriorated. It was the most extraordinary illusion to have thought that it could have improved after September, 1938. The Prime Minister was right in saying that it was not only the tremendous pressure of the Opposition that overcame his obstanacy. There were other causes; and I am not sure that the First Lord of the Admiralty ought not to be given the major credit for having fought this battle alone for 10 years. As a result he is a figure in this country holding a position greater than of almost any other Member in the House.

I had intended to develop an argument. if there had been time, upon the whole range of the economic problems which lie before us. They are tremendous. Much has been done towards their solution, but an immense amount remains, and much should have been done more rapidly. As I apprehend it, if there is confusion in the House, it has not to do with this Motion or the Amendment, or whether the proposed Minister should be this or that. The real question is whether we are really facing fully the difficulties, or whether we are sometimes tending to minimise them. I am alarmed sometimes at the attempt to minimise difficulties and to write them down. Take, for instance, the question of exports. We are, of course, filled with satisfaction at the rise in the sterling value of exports. The Prime Minister told us in a speech yesterday that the exports for the last month were greater than the average of the three months before the war. That is not really the point. It is very satisfactory in a way, but we have to remember that sterling has depreciated by If; per cent., which has its effect upon the calculation, and that world prices have risen by 25 per cent. The point at issue is not the totality of exports, but the margin between exports and imports. As Lord Stamp said in another place the other day, the grave condition of affairs is the fact that the margin between exports and imports has worsened by 41 per cent. in the last four months. That is the thing that worries the House. We are given figures which are supposed to alleviate our troubles; but the figures are not really an honest, straightforward, fair facing of the gravity of the issues that lie before us.

Frankly, like many hon. Members, like ray hon. and gallant Friend there who made an admirable speech from his experience, I find myself in a difficulty on how to vote on this Motion and Amendment. I feel that what the country and the House want, as was developed by my right hon. Friend the Member for Spark-brook (Mr. Amery) in his admirable speech, full of knowledge from the work that he himself did in the last war, is a War Cabinet, in effect placing the office of Prime Minister into commission. We want a War Cabinet of men, not with executive activities and departments of their own, but able to perform as a single unit in all departments of government, diplomatic, military and economic, the duties that the Prime Minister cannot perform alone. If in that War Cabinet one man specialises in economic problems, another in diplomatic and foreign problems, and another in military problems that is a matter for their own convenience. But the War Cabinet must act as a whole —as a corporate body. That is the structure to which I am quite certain that, before a few months more of this war have gone by, we shall be bound to come to.

9.52 p.m.

Mr. Attlee

My right hon. Friend the Member for South Hackney (Mr. H. Morrison), who has a very wide administrative experience, put forward very cogent reasons for the acceptance of this Motion. I think a number of Members who have spoken have not really considered what the Motion proposes, and I am sure that the Amendment was put forward by Members who had not considered the Motion at all, because it has nothing to do with it. What is the gravamen of our charge against the Government —if we make a charge—or what is the pain purpose of our suggestion? Our suggestion is that in this war we need the planning of our resources, and that for that purpose we want Ministers who have the function of planning. We want a Cabinet where the people represent or are in charge of the functions of Departments. We are dealing with this special economic point, but it applies to other positions as well. It is above all in the sphere of the economic elements that we see a lack of planning and direction. We see economic administration divided up among a number of Ministers.

The answer to that in the Government-inspired Amendment is that everything in the garden is lovely, and that if anything more is needed to strengthen the economic position of the country the Government can be relied upon to do it. That has nothing to do with the question. It does not touch the administrative question; nor does the Amendment in the names of two hon. Members who are Government supporters and sit below the Gangway opposite. They take up an entirely different attitude, not perhaps so satisfactory to the Government. As I read their Amendment they are thoroughly dissatisfied with the personnel. Like the hon. Member for Stockton (Mr. Harold Macmillan) they think the only hope of the nation is for the resources of the nation to be developed by the activities of hon. Members on this side of the House. There is a lot to be said for that, but I confess that I did not expect that it would be forthcoming from that quarter of the House.

Mr. Denman

The Amendment on the Paper in my name, I suggest, does not propose that the functions should be taken over by hon. Members opposite, only that they should take their share of these responsibilities. The right hon. Gentleman will hardly contend that the administrative resources of the nation are already being completely developed, while the benches opposite remain aloof.

Mr. Attlee

That is what the hon. Member meant but not what his Amendment says. It says that those resources could not be completely developed unless Members of the Opposition parties are prepared …. to accept the responsibilities of this or other suitable Ministerial offices. Therefore they could not be properly developed unless we did. The right hon. Member for Sparkbrook (Mr. Amery) supported the Motion in what I thought was a very powerful speech. I do not think that the Prime Minister really dealt with the matter in his speech. He made a number of debating points, but the fact that there was such a number of debating points seems to reveal the lack of real argument. On the question, for instance, of the long resistance to the Ministry of Supply, the fact was that when we did get the Ministry it was only a very inadequate one. We gathered from the Prime Minister that everything was ready when the time came; unfortunately it was not. The greatest deficiencies have shown themselves ever since. Everyone realises now that we should have been far better equipped if we had taken up that business of Supply and not left it to be a kind of by-product of the Secretary of State for War, who had plenty on his shoulders without dealing with Supply.

Let me take another of these smaller points in order to get rid of them. It is said that if you had any Minister in a position of authority over other Ministers that would weaken their position, particularly if their plans were turned down by anybody else. The Chancellor of the Exchequer could not put forward that case, because it is part of his function to turn down plans. No Minister of any experience can say that he never had the experience of the Chancellor of the Exchequer turning down his plans. Civil servants are accustomed to warning their Ministers: "Your enthusiasm is all very well, but you have always to convince the Chancellor of the Exchequer." It is no use taking that line. I notice that the Prime Minister did not attempt to defend the long delay over the appoint- ment of a Minister of Defence. That was agitated for on all sides of this House for a very long period, yet, when at last we did get the matter dealt with, it was dealt with by appointing the wrong man and giving him the wrong function.

I suggest that that is just what the Government are doing to-day. They always approach the matter from the wrong angle. Instead of considering that what is wanted is higher direction they consider that what is needed is a conciliator among the smaller fry, somebody like a lawyer, a man skilled in negotiation, in finding verbal formula to get over differences among contending Ministers. They have appointed an extremely skilful man for that; I am sure that the present holder of the position of co-ordinator of economic affairs is extraordinarily skilful in bringing people together, but that is not the same thing as having a plan and seeing that plan put into force and carried out in pursuance of a common policy. In the economic sphere you have at least 12 Ministries dealing with economic affairs. You have a co-ordinator, who interferes when their roads cross. I suggest that what is required in the economic sphere is much more like a general staff, laying down the broad lines of policy and surveying and keeping under survey the whole field of operations.

Ministries should be more like corps commanders or divisional commanders, in relation to a general staff. They should be carrying out part of a general strategic plan. They should not always be making a separate attack; there should be a general staff to outline their routes, so that they do not cross each other. We have not got that general plan for tackling the prime economic question of this war. Whoever the person should be to perform this function he should be someone who has not his own special Department. For instance, if you are to get any co-ordination in Defence it would be wrong to put either a Minister of the Admiralty, the War Office or the Air Ministry in a position of supreme command. In the same way when you are dealing with economic functions it is a mistake to put the Chancellor of the Exchequer in the post of supreme commander, because although he deals with the economic function it is a specialised economic function and the Treasury are inevitably obsessed with certain problems which are always with them.

The Prime Minister mentioned the rate of exchange and the question of inflation. I might also mention the interest of the City. These matters always must be with the Treasury, because they have to look after these things, but it should not mean that the Treasury should co-ordinate all economic effort which deals with questions quite different from that of the rate of exchange—questions of production, of the utilisation of our resources, manpower and export trade. The Prime Minister, as I understand, says the Chancellor of the Exchequer is the right man to co-ordinate these, because finance comes into it all. That may be so, but finance comes into all the social services; it necessarily comes into all the fighting Services. If the Prime Minister is right the Chancellor of the Exchequer ought to be running the whole show. The Prime Minister is, of course, First Lord of the Treasury, but in my view the First Lord of the Treasury should not be also the Chancellor of the Exchequer. I do not think the Prime Minister has met the real point which my right hon. Friend has put forward, which is that we want a body to take decisions. That is really the function of a Cabinet.

It is inevitable that in the course of this Debate the whole position of the War Cabinet has been raised and one must just glance at it in this respect. It is the function of the Cabinet to make decisions. In peace-time there is generally a large Cabinet which takes decisions on a great variety of subjects, some large and some small. and not infrequently the Cabinet's agenda is overloaded with small matters. I never agreed that the composition of the Cabinet in peace-time was satisfactory. It may work tolerably with a Government which wants to keep things going and which does not want any great changes. I am sure that a dynamic Government would require a small Cabinet and a Cabinet which represents not Department, but functions. A War Cabinet has the necessity of making very far-reaching decisions. Under the necessity of making great changes in the organisation of the country, what should be its composition? We had evidence of what the composition should be during the last war. I do not think that was based on representation of functions. It certainly was not based on representation of Departments. It was mainly based on the representation of different parties. Liberals, Labour and the Conservatives had their place, and later on there was a representative from the Dominions. It was to express the unity of parties, and, later, I think, the unity of the British Commonwealth. No doubt the personality of the then Prime Minister had a great deal to do with the way it operated, but there was only one Minister with heavy Departmental functions, and that was the Chancellor of the Exchequer, Mr. Bonar Law, and he was there also, I think, as leader of the Conservative party.

Let us compare that for a moment with the present War Cabinet. As I understand that War Cabinet, it was a group of men meeting together constantly, taking major decisions, but to a large extent dividing a kind of general supervision over other Ministers among themselves. In the present Cabinet, in addition to the Prime Minister, we have four Service Ministers, the Foreign Secretary, the Chancellor of the Exchequer, and two Ministers without Portfolio. It is quite obvious that the Service Ministers have too heavy a work to have free minds to consider broad matters of policy. In either the War Office, the Air Ministry or the Admiralty, it is quite impossible for them to have free enough minds to consider the very large matters which should be decided by a Cabinet. It is rather curious that the reinforcements are extraordinarily weak on the economic side.

Lord Hankey's previous experience has been entirely, I think, with Defence problems. There is the right hon. Gentleman the Member for Chelsea (Sir S. Hoare), who has been connected with the Air Ministry, the India Office, the Home Office and the Admiralty. The Prime Minister was concerned with the Post Office—he was one of those fleeting Members who passed through the Post Office—but his work has lain chiefly with local government and finance. The Chancellor of the Exchequer has been at the Home Office, the Foreign Office and the Exchequer. There is a complete absence of anyone whose work has been with the economic Ministries, or who, indeed, has any economic background, except that one of the Service Ministers, the right hon. Gentleman the First Lord of the Admiralty was for several years at the Board of Trade, and a recent change has brought in another ex- President of the Board of Trade. But, as I see it, these Ministers have quite enough to do to look after their own jobs.

I do not understand, after listening to the Prime Minister to-day, on what principle this War Cabinet has been founded. I gather from what he has let fall to-day that it was mainly on the score of personality, but it is curious that the personalities should have been only with the fighting Services and that there should have been a complete absence of personality among the economic services. I do not believe that it has been formed on the score of personality at all. I think that the War Cabinet has been formed mainly with the idea of bringing together the Ministers concerned with the fighting Services. I hold that that is a very grave mistake in a war which depends so much on economic organisation. That is why we have put forward this Motion—because if the Cabinet is doing its duty of making major decisions there is no one in that Cabinet in close touch with the economic field. The Prime Minister said, "But when we want to consider any of these matters we can always call in the Ministers concerned." I think that that is, again, taking things too far. In that case, why have anyone in the Cabinet but the Prime Minister? He can have everybody else waiting on the mat to come in when asked for.

But what really disturbed me was the kind of instances the Prime Minister gave as to the present working of the machine. They all dealt with the immediate problem of getting over difficulties between this Ministry and that Ministry, or immediate problems of Supply. There was no hint that there was anybody considering plans for the future. There was no suggestion that anybody was dealing with major issues. I contend that the major issues of economic policy are not the questions concerning the import of this or that article, or even the question of the allocation of supplies between this Ministry and that, important as they are. There are far wider questions that have to be solved in this war, questions which require a Minister charged with dealing with the function of economic planning, well equipped with a proper staff to enable him to give the Cabinet the benefit of his full advice on these subjects.

There was one curious position put forward, that inevitably, if you appoint a Minister charged with economic functions, he will come in contact with the Chancellor of the Exchequer. I cannot see why he should do so any more than the Foreign Secretary or the Minister for the Co-ordination of Defence. I do not believe that the Chancellor of the Exchequer should be put into a kind of position in the Cabinet over everybody else. He has his function with regard to finance, and it is necessary and very important, but the function of economic planning is equally important. I agree with the hon. Member for Stockton-on-Tees in his view of a Cabinet with the office of Prime Minister in commission. I do not look upon it as a sort of hierarchy, with the Prime Minister at the top and the Chancellor of the Exchequer just below, and all the others underneath. I do not see why there should be that inevitable clash between a Minister dealing with economic affairs and the Chancellor of the Exchequer. I hope that they would work together.

Let us consider some of the problems which ought to be attended to to-day. I do not know whether the Chancellor of the Exchequer or the Stamp Committee is considering them. Take the allocation of our economic resources between our war effort and our civilian needs. I do not think you could get that by having a coordinator between the different and separate Departments of a number of Ministries. I think you could get it only by a major decision based upon careful information and planning of resources. Take the question of the standard of life which it is possible to maintain in this country, the application of the standard of life to various sections of the population. Take the question of major decisions with regard to the amount of man-power to be put into our home production of food and other essentials. and the amount of man-power and the amount of our effort to be put into shipping. These are broad economic decisions which need to be taken. They have to be taken, no doubt, if taken at all, by the Cabinet, but the Cabinet ought to have people there who are informed upon economic affairs.

As I have pointed out, there is no one there whose job is responsible and no one with a background of economic experience. There is the whole question of transport. You cannot leave that to the Minister of Transport. I doubt whether it is wise to leave it merely on the advice of economists and others. There is the great danger which was alluded to by my hon. Friend the Member for Jarrow (Miss Wilkinson), and that is the tendency of the Government almost to depend upon interested persons in the trade. I am not going to under-estimate the patriotism or the sense of public service of many of these men, and I believe that they are often put into a quite impossible position, and very often it is not right to take a man from the trade, because the trade is often divided up into many sections. What you find is that one particular section of trade gets something and another section is left out.

This is not a matter which can be decided on grounds of private interest but of public interest. We think it is better that some great services should be nationalised now, rather than be carried on by qualified enterprise with all kinds of checks and controls. I think it would be extremely embarrassing for the Government adviser on economic affairs to have to give advice on that particular point. That is the disadvantage of employing people with too many jobs. The Chancellor of the Exchequer has been given too many jobs. He is responsible for economic organisation as well as finance, and, like him, I am sure Lord Stamp has too many jobs. Take the question of the utilisation to the full of our resources. We have a great deal of unemployment, especially among the skilled and professional workers. We are told t hat they are all going to be absorbed, but it seems to me we are taking a long time to take up the slack.

We have no time to waste in this matter. What is needed, as my right hon. Friend the Member for South Hackney said, is not just co-ordination, but drive, planning and direction by the whole of the economic machine. I do not believe that in their hearts hon. Members who put their names to this Amendment are really as pleased as one might think on the first reading of their words. I do not think the machine is working terribly badly, but I do think it might work a great deal better than it does at the present time. I do not feel inclined to rely on His Majesty's Government to take any steps. Our trouble is that the Government do not take any steps unless this House pushes them. I am at a loss to understand why they are always so shaky on questions of Government machinery. We have to wait not only until there is a demand from Members on all sides in this House, but in the Press and other places, and then at last the Government yields with ill grace.

I think my right hon. Friend was perfectly right in saying that the Government will ultimately yield on this. I am not even unhopeful of seeing in the War Cabinet some day someone with a knowledge of economics and planning, but I cannot see why we should waste so much time. For the Ministry of Defence we had to wait years. We are faced again with the same kind of unwilling Amendment with the Chief Whip running round to get people to put their names to it, and I think it is right to say that the people who are responsible for a great deal of inefficiency to-day are Members on the Government Benches, who will not take their full share of responsibility. They are docile and, when they feel criticism, it is wonderful how effective it is; and again and again they will vote against what I believe in their heart of hearts they desire. I believe, if we had a free vote, there would be an overwhelming majority for the Motion.

10.21 p.m.

Sir J. Simon

There have been two subjects debated to-night, related but, none the less, subjects which can be regarded separately. One is the question of the proper composition of the War Cabinet. The other is the question whether such a body, if well constructed, should contain a Minister specially charged with the direction of economic policy. As regards the second question, it may seem a little invidious that I should have to speak in the Debate. Perhaps I ought to retire to the smoking room until my fate is decided. I am reminded of an experience in Victorian times when a very saintly theologian greatly objected because the then Lord Chancellor presided in the Privy Council when the question being decided was whether it was necessary, to be orthodox, to believe in eternal punishment. When asked why the Lord Chancellor should not have presided, the theologian said, "Because he is obviously interested in the result." I shall have very good reason to remember this Debate. The right hon. Gentleman who opened it was on his very best behaviour. I shall long recall the gentleness with which he proceeded. I could see that he was sorely tempted as regards myself, and I feel that he was following the advice which Izaak Walton gave to the fisherman to "treat your worm as though you loved it."

Sir A. Sinclair


Sir J. Simon

"Worm" sounds better. I should like to begin by contributing one or two observations on the subject of the work of the Cabinet, to which I would respectfully but modestly ask attention, because, whatever one's shortcomings may be, I have seen this work going on from the inside, and, inevitably, most of the people who speak in confident language of criticism about it can only speculate as to what is the real method of procedure. First of all, there appears to me to be a very widespread impression, which is quite without foundation, that in a War Cabinet, or for that matter in any Cabinet, a Minister who is charged with the responsibility of some great Department, attends the Cabinet discussions, as it were, in blinkers, devoted to the protection of his departmental view, representing the particular considerations which, in his corner of the Government, be it great or small, are his special charge —all of which, in my experience, and I am sure in the experience of others who have served in Cabinets, is completely contrary to the facts. If the Chancellor of the Exchequer, for example, went to the Cabinet meeting with the view, "I have nothing to do here except to be quite sure that my Treasury view is insisted upon," I do not quite see what would be the good of holding a Cabinet meeting.

A Cabinet is a body of consultation and of decision on questions of policy in which the contribution that is made is not made from the narrow departmental point of view. Does anybody suppose that my right hon. Friend the First Lord of the Admiralty never takes part in a Cabinet except to discuss the subject of the Navy? An hon. Member below the Gangway referred to the late Lord Haldane, and, certainly, I share his admiration for that great man's achievements and services. I sat in a Cabinet with him, and I dare say there may be some on the opposite benches who did so. Nobody would suggest that Lord Haldane limited his contribution to some particular and defined subject matter with which he was specially charged. That is not what happens, and it really is a complete misunderstanding of the nature of Cabinet work to use the argument which I have frequently seen used in criticism, "Well, how can you expect the Chancellor of the Exchequer to take a broad, statesmanlike view on all these important questions, because everybody knows that the Chancellor of the Exchequer "—not me, but any Chancellor—" is bound, in the nature of things, to be biased and to address himself especially to what is called the Treasury point of view?" I rather agree with the right hon. Baronet the Member for Caithness and Sutherland (Sir A. Sinclair) when he said that he was not at all sure that when my tombstone came to be inscribed it would necessarily recall my virtues in resisting expenditure for the Treasury, and that it was quite possible it would say that I had assisted in a good deal of spending. I have. I take the view that you cannot possibly lay down some narrow and pedantic line at this time for the Chancellor of the Exchequer, and I think my colleagues will agree with me when I say that, while I have done what I could to check extravagance and waste and to challenge doubtful expenditure, I do not think the Treasury in these difficult years has been unhelpful to the other Departments of State.

The second thing I want to say is this. I listened with growing astonishment to the views of some hon. Members about my own position. Apparently more people sympathise with my difficulties than I had ever before supposed. They say, "Look at this unhappy Chancellor of the Exchequer. There is only one Chancellor. There he is, all alone in a War Cabinet which contains three, nay, four people who may be connected with the Services. How is it possible that the considerations entrusted to his charge shall be adequately defended when he is in that position?" I can only say for my part that while I have many troubles, I am not conscious of having been in the position of an orphan in the storm, and I have this, at least, to encourage me, that in the present War Cabinet there sits every living person who has been Chancellor of the Exchequer since 1924. So that I am not quite as lonely as some people might suppose. I have found in practice no difficulty in presenting the considerations which it is my duty to present. There are, of course, those who challenge me. There would be no use in Cabinet discussions if that were not so. I can only say, however, that it is a very curious view of the working of a Cabinet on subjects like this, which leaves out of account the contribution and the authority of the Prime Minister, and the contributions of others who arc very competent to contribute to the consideration of these subjects.

The third point I wish to make is this: I think there is some misunderstanding on the part of those who say that in every Cabinet other Ministers who are affected should attend. The hon. Member for Ince (Mr. G. Macdonald) spoke in his usual straightforward manner this afternoon and it was clear from what he said that, for the moment, he did not appreciate the position in this respect. There may be other organisations, other committees or councils, where a man from outside would come in and say what he thought ought to be done; then out he would go again, and the committee or council would proceed to consider their decision. That is not the position so far as the Cabinet is concerned. Every member of the War Cabinet receives the agenda and other papers before a meeting, and opposite certain items there will be an indication that at the discussion of these subjects, certain Ministers will attend. When it is said that a Minister will attend, it means that he will take a part, and a full part, argue his point of view; and call attention to his difficulties. I have seen in the last few weeks—I do not mention the names of the offices—four or five Ministers, in addition to the members of the War Cabinet, taking a close and constant part in discussing very difficult and complicated decisions which were ultimately reached.

Mr. G. Macdonald

With equal authority?

Sir J. Simon

With equal authority in this sense, that the War Cabinet is charged with the responsibility of conducting the war, but they cannot discharge that responsibility in view of the great complexity and range of the matters involved, unless they call in their colleagues, on special points, whatever those may be. The Minister of Shipping, the President of the Board of Trade, or any other Minister may be called in in order that he may contribute all that he has to contribute to the discussion before a decision is made.

There is another thing which I do not think the Leader of the Opposition has correctly presented. I do not speak in any spirit of dogmatism or with any heat. We are arguing here a most interesting question of structure. It can be dealt with in many ways. I do not say that the present system is perfect, but I am trying to give a picture of it as I see it. I do not think it is in the least true to say, in respect of the present War Cabinet, that in dealing with these frightfully important and difficult economic problems, it is proceeding without a General Staff. But the object of a General Staff is not to decide. A General Staff, whether in a military or any other sense, examines, plans and reports what is possible and what is not possible and what steps must be taken if this or that result is desired. It is not the General Staff which decides. It is the Government of the country which decides and which must decide, and that is so equally in military and in economic affairs.

What is actually the story about this in relation to the present war? I do not know that I feel that there should be reproaches that this country was not more completely prepared. We worked for peace, but undoubtedly we faced the possibility of war, and we did prepare for this possibility. By all means let us give honour and credit to those with responsibility for carrying on the government of this country in the latter part of the Great War. But did they have before That war started an economic staff, which had been working diligently for months studying before the event the difficulties likely to arise, the immense variety of economic subjects—

Mr. Ellis Smith

Conditions were different then.

Sir J. Simon

The hon. Member will see that you cannot examine these things with the same precision and minuteness before the war as you can do when the nature of the war determines them. It depends on who is the enemy, on what allies you have and whether Russia is in the busi- ness and on which side Russia is in the business. All these things are necessarily unknown. But you can do an immense amount of preliminary examination. I am quite certain that there has never been a war in our history for which preparation in the economic sphere was more thoroughly and diligently made and made in the period during which war broke out.

The hon. and gallant Member for Ormskirk (Commander King-Hall) has obviously closely studied the records of 1917–18, and he asked why no central direction was needed now as much as central direction was needed in 1917–18. The answer is that, of course, it is needed. It is the thing which the War Cabinet is endeavouring to provide. There is no distinction in the objects we are endeavouring to serve. Anyone may criticise the composition of the War Cabinet or its efficiency, but for the very reason that a war comes upon us we abandon decision by a big Cabinet to create what is a War Cabinet for the purpose of the central direction of the war. I heard my right hon. Friend the Member for Sparkbrook (Mr. Amery) make a very interesting speech, and I hope he will bear with me if I express a slightly different view on a matter of fact. He apparently held the view, which I think it would be easy to infer from his words, that Lord Milner was appointed to the Cabinet of 1917 in order to be specially charged, as Minister, with economic policy.

Mr. Amery

I did not say "appointed," but his special knowledge did in fact enable him very largely to carry out that function.

Sir J. Simon

If you please. At least we have established this, that the previous War Cabinet did not contain anybody specially charged with the business of economic policy. I am going to show what the true facts are. I have informed myself on the best possible authority, including my colleague in the War Cabinet,. Lord Hankey, who was secretary, of course, at the time. It is quite wrong to suppose that Lord Milner had that special position. He was a man of enormous ability and great administrative experience. What happened was that questions were referred to him and many other people ad hoc. Some in Lord Milner's case were economic questions and some were not. Many economic questions were not dealt with by Lord Milner at all. That was my recollection of his life, and I have read and confirmed it by looking in the "Dictionary of National Biography." I am told that any impression that in the Cabinet of 1917 there was a Minister included in order that he should pursue the direction of economic policy is really an error. Lord Milner left the War Cabinet early in 1918, and no one would suggest that there was anybody specially charged to deal with economic questions after that.

I understand the view that it would be better to have five people rather than seven or nine. It depends very much on whether you have a team that works together rather than on the precise numbers. In the War Cabinet of 1917, which was originally five, there were the Prime Minister and the Chancellor of the Exchequer and three others. Two of them were without portfolios, and the third was Lord Curzon who had light Departmental duties. In the present War Cabinet as constructed by my right hon. Friend there are really three members who are not involved in any serious Departmental duties—the Lord Privy Seal, Lord Hankey, and Lord Chatfield. The difference is that, in addition to that amount of uncommitted personality, in addition to having three Ministers without Departmental duties, the present War Cabinet contains the three Defence Ministers. You can argue till all is blue whether that is right or not, but I really do not think that destroys the fundamental point, which is that the War Cabinet is, what it ought to be, a body which contains Ministers who, because of their freedom from Departmental responsibilities, are able continually to undertake, under the direction of the Prime Minister, a vast range of important ad hoc duties. Lord Hankey does so and works in connection with all sort of inquiries and committees. The Lord Privy Seal does so—

Miss Wilkinson

Have they any special knowledge of economic affairs?

Sir J. Simon

The number of people who can truly say they are both politicians and persons with a special knowledge of economic science is few. If I refer to the first War Cabinet, I am not aware what economic experience was possessed by either Mr. Bonar Law, by Lord Curzon, by Lord Milner, or by Mr. Arthur Henderson. Yet they were all members of the "ideal" War Cabinet. The real truth is that you must demand from people intelligence, public spirit, and experience. They must be capable of studying a great mass of material and getting the best out of it, be accessible to good advice, and be able to know how to resist bad advice. These are qualities that are far more important than a technical knowledge of a very technical matter.

The Leader of the Opposition ventured to describe some of those very important economic questions which in his conception should really be considered by a competent, respectable War Cabinet. I took them down, and I am sure that not one of my colleagues will hear them with any refreshing sense of novelty when they are read out. First, he thought it would be only right that we should be fully informed on the allocation of resources between war effort and civilian needs. I do not suppose a single week has passed without there being additional careful information contributed to us for the purpose of studying this question in every aspect. It is one of the first and most obvious things that any sensible set of people would do, and the idea that there is here a valuable suggestion if only we follow it up is to me very astonishing. Another illustration of where we might be usefully assisted was the reference to the standard of life. Let me say with all humility that, whatever our shortcomings, both the Economic Survey and the independent reports of the Stamp Committee, and our own initiation of inquiries, cover that ground very well. The third point was contained in the question as to the amount of man-power which might be devoted to various services, such as shipping. I am tempted to say to the Leader of the Opposition if I may parody the well-known cartoon, "Come inside." There may be many things which are wrong, but at any rate, in these excessively obvious and elementary matters, we have been to a quite considerable extent instructed and assisted.

Now I have to say a few words on the very difficult subject of whether the man who holds the office of Chancellor of the Exchequer can in the circumstances charge himself with studying the enormously important economic problems of war. I certainly would be the last to complain because people raise the question whether it is possible to do it. I do not claim to be better qualified than anybody else, but I should like to point out that there would be serious difficulties in the way if you did not recognise that the two functions go together. Looking at this matter reasonably, let us see in what the difficulties consist. The truth is that, contrary to what some theorists suppose, there is not a clear line to be drawn between financial problems and economic problems in war. Let me put it to the test. Yesterday, at this Box, I announced that the Government had, ever since last December, been devoting very large sums of public money to the purpose of keeping down the prices of some essential foodstuffs. Now is that financial policy or economic policy? It may be both. No one could possibly imagine such a decision being arrived at without the most thorough examination of the matter.

One of the most common situations of a Chancellor of the Exchequer is that of having to look forward to see by what possible taxation and loans he will be able to cover what is needed for next year. To add to it any further amount whatever, say £50,000,000, is a very serious thing, from his point of view—from a Budgetary and financial point of view. At the same time, there could not be a bigger economic issue; and it is very difficult to see—I am not doing more than pointing out the difficulty—how you could, in the circumstances, separate those two considerations. The same thing arises in a great many cases—not in all, I agree.

Mr. A. V. Alexander

May I put one point to the Chancellor of the Exchequer? I think the point taken is that the right hon. Gentleman has had to provide financial cover at this late stage for many previous economic mistakes.

Sir J. Simon

If we are going to examine all the past misdeeds of the Government, we shall never be done. [HON. MEMBERS: "Hear, hear."] The House is now enjoying an example of complacency. Consider the sort of case which very often arises. Some hon. Member said, perfectly candidly, that perhaps the two most serious considerations, from the financial point of view, that the Chancellor of the Exchequer had to face in a great war like this—this is, on the purely financial side—would be our dollar account and our ability to pay for what we most want, and, on the other hand, our domestic Budgetary and currency problems. That is true. But just see how closely this question of the dollar account is bound up with the whole series of what might be described as economic questions. If shipping is under consideration, it is very important to know how far the ships are to bring our supplies from dollar countries and how far from sterling countries. It is very important to know, in connection with the Ministry of Economic Warfare, whether this is going to help or hurt the position of certain countries.

The truth is that, in the administration of public affairs, you have, in justice to yourself, to keep several considerations in mind and to do your best to balance them. I must say that I share the views of the Prime Minister; I do not see how a Chancellor of the Exchequer, who has, admittedly, a very great responsibility, could possibly surrender his responsibility for those matters to any other Minister who claimed to be authorised to direct in what are called economic affairs. In practice, if people are sensible, you get a conclusion, a rapid conclusion and one that is agreed to generally. You could nominate what the right hon. Gentleman who spoke first described as a super-Minister, a Minister of war economy, who had, as he said, this special charge. For example, he would be at liberty to go to the Transport Minister and say to him—n other words, to give orders—"You must do that." He was good enough to give us a list of all the Ministries to which this would apply: the Board of Trade, the Mines Department, the Department of Overseas Trade, the Ministries of Shipping, Labour, Transport, Supply, Agriculture, and Food, the three War Departments, and the Ministry of Home Security. I must say that I cannot conceive a super-Minister who would say, "You shall do that."

Whether the Treasury is included in this mixed bag I am not clear. I think that it is going very much too far in the direction of giving one man authority which he could not possibly exercise. I would like to recall what was said by the hon. Gentleman the Member for Ince. He said that we should so conduct affairs as to win the war and win it as quickly as possible. With that we all agree. I would not like to deny that we have made mistakes, and I do not resent criticism which is reasonable.

Finally, I would like to ask: Is it not worth reflecting that democracy in a country like this means that we can have this Debate all day in public with complete good temper, no doubt criticising one another, but at the same time taking it all in good part? Nobody is going to be put into a concentration camp or disposed of by the secret police because of something he may have said to-day. That is the real difference between the democratic government that we are upholding and the other system. This Debate, I think, has served a very useful purpose. It shows that we can discuss these intricate and difficult questions of constitutional structure, and I hope all of us will agree that it really contributes to the common good. I hope that those whom I have succeeded in convincing will support the Amendment which has been moved and in that connection I would like to refer in particular to the speech of my hon. Friend the Member for Walsall (Sir G. Schuster), whose great qualities we all recognise. Finally, I would ask the House not to accept this as a precise arrangement at present, as though it were devised by some super brain to be applied in all circumstances, but we should realise that it is a system which we all hope will take us the way that we desire to go.

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

The House divided: Ayes, 90; Noes, 185.

Division No. 9.] AYES. [10.59 p.m.
Acland, Sir R. T. D. Barnes, A. J. Davidson, J. J. (Maryhill)
Adams, D. M. (Poplar, S.) Beaumont, H. (Batley) Davies, C. (Montgomery)
Adamson, Jennie L. (Dartford) Benn, Rt. Hon. W. W. Davies, S. O. (Merthyr)
Adamton, W. M. Benson, G. Gobble, W.
Alexander, Rt. Hon. A. V. (H'lsbr.) Cape, T. Dunn, E. (Rother Valley)
Ammon, C. G. Cluse, W. S. Ede, J. C.
Anderson, F. (Whitehaven) Collindridge, F. Edwards, A. (Middlesbrough E.)
Attlee, Rt. Hon. C. R. Daggar, G. Fletcher, Lt.-Comdr. R. T. H.
Banfield, J. W. Dalton, H. Frankel, D.
Gardner, B. W. Macdonald, G. (Ince) Silverman, S. S.
Garro Jones, G. M. MoEntee, V. La T. Sinclair, Rt. Hon. Sir A. (C'thn's)
George, Megan Lloyd (Anglesey) Mainwaring, W. H. Smith, Ben (Rotherhithe)
Green, W. H. (Deptford) Milner, Major J. Smith, E. (Stoke)
Greenwood, Rt. Hon. A. Montague, F. Smith, Rt. Hon. H. B. Lees-(K'ly)
Griffiths, J. (Llanelly) Morgan, J. (York, W.R., Doncaster) Smith, T. (Normanton)
Hall, W. G. (Colne Valley) Morrison, Rt. Hon. H. (Hackney, S.) Strauss, G. R. (Lambeth, N.)
Harris, Sir P. A. Morrison, R. C. (Tottenham, N.) Summerskill, Dr. Edith
Henderson, J. (Ardwick) Nathan, Colonel H. L. Thurtle, E.
Henderson, T. (Tradeston) Naylor, T. E. Viant, S. P.
Hicks, E. G. Oliver, G. H. Walker, J.
Horabin, T. L. Parker, J. Watkins, F. C.
Isaacs, G. A. Pearson, A. Whiteley, W. (Blaydon)
Jagger, J. Pothick-Lawrence, Rt. Hon. F. W. Wilkinson, Ellen
Jenkins, A, (Pontypool) Price, M. P. Williams, E. J. (Ogmore)
Jenkins, Sir W. (Neath) Pritt, D. N. Williams, T. (Don Valley)
Jones, A. C. (Shipley) Ridley, G. Wilmot, John
Jowitt, Rt. Hon. Sir W. A. Riley, B. Windsor, W. (Hull, C.)
Lathan, G. Ritson, J. Woods, G. S. (Finsbury)
Leach, W. Roberts, W. (Cumberland, N.)
Leslie, J. R. Robinson, W. A. (St. Helens) TELLERS FOR THE AYES.—
Lunn, W. Shinwell, E. Mr. Charleton and Mr. R. J.
Acland Troyte, Lt.-Col. G. J. Elliston, Capt. G. S. Orr-Ewing, I. L.
Adams, S. V. T. (Leeds, W.) Entwistle, Sir C. F. Palmer, G. E. H.
Albery, Sir Irving Etherton, Ralph Peters, Dr. S. J.
Aske, Sir R. W. Everard, Sir William Lindsay Pickthorn, K. W. M.
Assheton, R. Fox, Sir G. W. G. Ponsonby, Col C. E.
Astor, Major Han. J. J. (Dover) Fyfe, D. P. M. Pownall, Lt.-Col. Sir Assheton
Baldwin-Webb, Col. J. George, Major G. Lloyd (Pembroke) Pym, L. R.
Balfour, Capt. H. H. (Isle of Thanet) Gibson, Sir C. G. (Pudsey and Otley) Raikes, H. V. A. M.
Beamish, Rear-Admiral T. P. H. Gower, Sir R. V. Ramsay, Captain A. H. M.
Beauchamp, Sir B. C. Greene, W. P. C. (Worcester) Ramsbotham, Rt. Hon. H.
Beaumont, Hon. R. E. B. (Portsm'h) Gretton, Col. Rt. Hon. J. Reed, Sir H. S. (Aylesbury)
Bernays, R. H. Gridley, Sir A. B Reid, W. Allan (Derby)
Bird, Sir R. B. Grigg, Sir E. W. M. Rickards, G. W. (Skipton)
Blair, Sir R. Grimston, R. V. Robertson, D.
Blaker, Sir R. Guest, Lieut.-Colonel H. (Drake) Robinson, J. R. (Blackpool)
Boles, Lt.-Col. D. C. Guest, Maj. Hon. O. (C'mb'rw'll, N.W.) Ross Taylor, W. (Woodbridge)
Bossom, A. C. Hacking, Rt. Hon. Sir D. H. Rowlands, G.
Boulton, W. W. Hammersley, S. S. Russell, Sir Alexander
Braithwaite, Major A. N. (Buckrose) Hannah, I. C. Salmon, Sir I.
Brass, Sir W. Hannon, Sir P. J. H. Salt, E. W.
Briscoe, Capt. R. G. Harbord, Sir A. Samuel, M. R. A.
Broadbridge, Sir G. T. Haslam, Henry (Horncastle) Sandeman, Sir N. S.
Brecklebank, Sir Edmund Hely-Hutchinson, M. R. Sanderson, Sir F. B.
Brooke, H. (Lewisham, W.) Heneage, Lieut.-Colonel A. P. Schuster, Sir G. E.
Brown, Brig.-Gen. H. C. (Newbury) Hepburn, P. G. T. Buchan- Scott, Lord William
Burghley, Lord Hoare, Rt. Hon. Sir S. Shakespeare, G. H.
Burgin, Rt. Hon. E. L. Hore-Belisha, Rt. Hon. L. Shaw, Major P. S. (Wavertree)
Burton, Col. H. W. Howitt, Dr. A. B. Shaw, Captain W. T. (Forfar)
Campbell, Sir E. T. Hudson, Capt. A. U. M. (Hack., N.) Simon, Rt. Hon. Sir J. A
Cary, R. A. Hudson, Rt. Hon. R. S. (Southport) Smiles, Lieut.-Colonel Sir W. D.
Cazalet, Thelma (Islington, E.) Hume, Sir G. H. Smith, Bracewell (Dulwich)
Chamberlain, Rt. Hn. N. (Edgb't'n) Hurd, Sir P. A. Somervell, Rt. Hon. Sir Donald
Channon, H. Jarvis, Sir J. J. Somerville, Sir A. A. (Windsor)
Chapman, A. (Ruthergten) Jones. Sir G. W. H. (S'k N'w'gt'n) Spans, W. P.
Churohill, Rt. Hon. Winston S. Kerr, Sir John Graham (Sco'sh Univs.) Stewart, J. Henderson (Fife, E.)
Cobb, Captain E. C. (Preston) Keyes, Admiral of the Fleet Sir R Storey, S.
Colman, N. C. D. King-Hall, Commander W. S. R. Strauss, H. G. (Norwich)
Colville, Rt. Hon. John Lennox-Boyd, A. T. L. Stuart, Lord C. Crichton- (N'thw'h)
Cooke, J. D. (Hammersmith, S.) Llewellin, Colonel J. J. Sutcliffe, H.
Courthopa, Col. Rt. Hon. Sir G. L. McCorquodale, M. S. Tate, Mavis C.
Craven-Ellis, W. MacDonald, Rt. Hon. M. (Ross) Taylor, Vice-Adm. E. A. (Padd., S.)
Croft, Brig.-Gen. Sir H. Page Macmillan, H. (Stockton-on-Tees) Thomas, J. P. L.
Crookshank, Capt. Rt. Hon. H. F. C. Makins, Brigadier-General Sir Ernest Thomson, Sir J. D. W.
Crowder, J. F. E. Manningham-Buller, Sir M. Titchfield, Marquess of
Cruddas, Col. B. Margesson, Capt. Rt. Hon. H. D. R. Touche, G. C.
Culvelwell, C. T. Mason, Lt.-Col. Hon. G. K. M. Tree, A. R. L. F.
Davidson, Viscountess Mayhew, Lt.-Col. J. Tryon, Major Rt. Hon. G. C.
Davies, Major Sir G. F. (Yeovil) Medlicott, Captain F. Tufnell, Lieut.-Commander R. L.
De la Bare, R. Mills, Major J. D. (New Forest) Wakefield, W. W.
Denman, Hon. R. D. Mitcheson, Sir C. G. Wallace, Capt. Rt. Han. Euan
Denvitle, Altred Moore, Lieut.-Col. Sir T. C. R. Ward, Lieut-Col. Sir A. L. (Hull)
Dodd, J. S. Moore-Brabazon, Lt.-Col. J. T. C. Ward, Irene M. B. (Wallsend)
Dorman-Smith, Col. Rt. Hon. Sir R. H. Morris, J. P. (Salford, N.) Wardlaw-Milne, Sir J. S.
Drewe, C. Morris-Jones, Sir Henry Warrender, Sir V.
Duncan. J. A. L. Morrison, G. A. (Scottish Univ's.) Waterhouse, Captain C.
Dunglass, Lord Morrison, Rt. Hon. W. S. (Cirencetter) Wayland, Sir W. A.
Eden, Rt. Hon. A. Munro, P. Webbe, Sir W. Harold
Edmondson, Major Sir J. Neven-Spence, Major B. H. H. Wells, Sir Sydney
Elliot, Rt. Hon. W. E. O'Connor, Sir Terence J. Weston, W G.
White, Sir R. D. (Fareham) Winterton, Rt. Hon. Earl TELLERS FOR THE NOES.—
Wickbam, Lt.-Col. E. T. R. Womersley, Sir W. J. Mr. James Stuart and Lieut-
Williams, Sir H. C. (Croydon, S.) Wragg, H. Colonel Kerr.
Windsor-Clive, Lieut.-Colonel G.

Question put, "That the proposed words be there added."

The House divided: Ayes, 178; Noes, 87.

Division No. 10.] AYES. [11.7 p.m.
Acland-Troyte, Lt.-Col. G. J. Everard, Sir William Lindsay Pym, L. R.
Adams, S. V. T. (Leeds, W.) Fox, Sir G. W. G. Raikes, H. V. A. M.
Albery, Sir Irving Fyfe, D. P. M. Ramsay, Captain A. H. M.
Aske, Sir R. W. George, Major G. Lloyd (Pembroke) Ramsbotham, Rt. Hon. H.
Assheton, R. Gibson, Sir C. G. (Pudsey and Otley) Reed, Sir H. S. (Aylesbury)
Astor, Major Han. J. J. (Dover) Gower, Sir R. V. Raid, W. Allan (Derby)
Baldwin-Webb, Col. J. Greene, W. P. C. (Worcester) Richards, G. W. (Skipton)
Balfour, Capt. H. H. (Isle of Thanet) Gretton, Col. Rt. Hon. J. Robertson, D.
Beamish, Roar-Admiral T. P. H. Gridley, Sir A. B. Robinson, J. R. (Blackpool)
Beauchamp, Sir B. C. Grigg, Sir E. W. M. Ross Taylor, W. (Woodbridge)
Beaumont, Hon. R. E. B. (Portsm'h) Grimston, R. V. Rowlands, G.
Bernays, R. H. Guest, Lieut.-Colonel H. (Drake) Russell, Sir Alexander
Bird, Sir R. B. Guest, Mai. Hon. O. (C'mb'rw'll, N. W.) Salman, Sir I.
Blair, Sir R. Hacking, Rt. Hon. Sir D. H. Salt, E. W.
Blaker, Sir R. Hammersley, S. S. Samuel, M. R. A.
Boles, Lt.-Col. D. C. Hannah, I. C. Sandeman, Sir N. S.
Bossom, A. C. Hannon, Sir P. J. H. Sanderson, Sir F. B.
Boulton, W. W. Harbord, Sir A. Schuster, Sir G. E.
Braithwaite, Major A. N. (Buckrese) Haslam, Henry (Horncastle) Shakespeare, G. H.
Brass, Sir W. Hely-Hutchinson, M. R. Shaw, Major P. S. (Wavertree)
Briscoe, Capt. R. G. Heneaga, Lieut.-Colonel A. P. Shaw, Captain W. T. (Forfar)
Broadbridge, Sir G. T. Hepburn, P. G. T. Buchan- Simon, Rt. Hon. Sir J. A.
Brooklebank, Sir Edmund Hoare, Rt. Hon. Sir S. Smith, Bracewall (Dulwich)
Brooke, H. (Lewisham, W.) Hore-Belisha, Rt. Hon. L. Somervell, Rt. Hon. Sir Donald
Brown, Brig.-Gen. H. C. (Newbury) Howitt, Dr A. B. Somerville, Sir A. A. (Windsor)
Burghley, Lord Hudson, Capt. A. U. M. (Hack., N.) Spens, W. P.
Burgin, Rt. HM. E. L. Hudson, Rt. Hon. R. S. (Southport) Storey, S.
Burton, Col. H. W. Hume, Sir G. H. Strauss, H. G. (Norwich)
Campbell, Sir E. T. Hurd, Sir P. A. Stuart, Lord C. Crichton- (N'thw'h)
Cary, R. A. Jarvis, Sir J J. Sutcliffe, H.
Cazalet, Thelma (Islington, E.) Jones, Sir G. W. H. (S'k N'w'gt'n) Tate, Mavis C.
Chamberlain, Rt. Hn. N. (Edgb't'n) Kerr, Sir John Graham (Sco'sh Univs.) Taylor, Vice-Adm. E. A. (Padd., S.)
Channon, H. Keyes, Admiral of the Fleet Sir H. Thomas, J. P L.
Chapman, A. (Rutherglen) Lennox-Boyd, A. T. L. Thomson, Sir J. D. W.
Churchill, Rt. Hon. Winston S. Llewellin, Colonel J. J. Titchfield, Marquess of
Cobb, Captain E. C. (Preston) Lloyd, G. W. Touche, G. C.
Colman, N. C. D. McCorquodale, M. S. Tree, A. R. L. F.
Colville, Rt. Hon. John MacDonald, Rt. Hen. M. (Ross) Tryon, Major Rt. Han. G. C.
Cooke, J. D. (Hammersmith, S.) Macmillan, H. (Stockton-on-Tesa) Tufnell, Lieut.-Commender R. L.
Courthope, Col. Rt. Hon. Sir C. L. Makins, Brigadier-General Sir Ernest Wakefield, W. W.
Craven-Ellis, W. Manningham-Buller, Sir M. Wallace, Capt. Rt. Han. Euan
Crookshank, Capt. Rt. Han. H. P. C. Margesson, Capt. Rt. Hon. H. D. R. Ward, Lieut.-Col. Sir A. L. (Hull)
Crowder, J. F. E. Mason, Lt.-Col. Hon. G. K. M. Ward, Irene M. B. (Wallsend)
Cruddas, Cal. B. Mayhem. Lt.-Col. J. Wardlaw-Milne, Sir J. S.
Culverwell, O. T. Medlicott, Captain F. Warrender, Sir V.
Davidson, Viscountess Mills, Major J. O. (Near Forest) Waterhouse, Captain C.
Davies, Major Sir G. F. (Yeovil) Mitcheson, Sir G. G. Waytand, Sir W. A
De la Bère, R. Moore, Lieut.-Col. Sir T. C. R. Webbe, Sir W. Harold
Denville, Alfred Moore-Brabazen, Lt.-Col. J. T. C. Wells, Sir Sydney
Dodd, J. S. Morris-Jones, Sir Henry Weston, W. C.
Dorman-Smith, Col. Rt. Han. Sir R. H. Morrison, G. A. (Scottish Univ's.) White, Sir R. D. (Fareham)
Drewe, C. Morrison, Rt. Hon. W. S. (Cirensester) Wickham, Lt.-Col. E. T. R.
Duncan, J. A. L. Munro, P. Williams, Sir H. C (Croydon, S.)
Dunglass, Lord Neven-Spence. Major B. H. H. Windsor-Clive, Lieut.-Colonel G.
Eden, Rt. Hon. A. O'Connor, Sir Terence J. Winterton, Rt. Hon. Earl
Edmondson, Major Sir J. Orr-Ewing, I. L. Womersley, Sir W. I.
Elliot. Rt. Hon. W. E. Palmer, G. E. H. Wragg, H.
Elliston, Capt. G. S. Peters, Dr. S. J.
Emrys-Evans, P. V. Picktham, K. W. M. TELLERS FOR THE AYES.—
Entwistle, Sir C. F Pownall, Lt.-Col. Sir Assheton Mr. James Stuart and Lieut.
Etherton, Ralph Colonel Kerr.
Acland, Sir R. T. D. Benn, Rt. Hon. W. W. Dobbie, W.
Adams, D. M. (Poplar, S.) Benson, G. Dunn, E. (Rother Valley)
Adamson, Jennie L. (Dartford) Cape, T. Ede, J. C.
Alexander, Rt. Hon. A. V. (H'tsbr.) Charleton, H. O. Edwards, A. (Middlesbrough E.)
Amman, C. G. Cluse, W. S. Fletcher, Lt.-Comdr. R. T. H.
Anderson, F. (Whitehaven) Collindridge, F. Frankel, D.
Attlee, Rt. Hon. C. R. Daggar, G. Gardner, B. W.
Banfield, J. W. Dalton, H. Garro Jones, G. M.
Barnes, A. J. Davidson, J. J. (Maryhill) Gaorge, Megan Lleyd (Anglesey)
Beaumont, H. (Batley) Davies, S. O. (Merthyr) Green, W. H. (Daptford)
Greenwood, Rt. Hon. A. Mainwaring, W. H. Sinclair, Rt. Hon. Sir A. (C'thn's)
Griffiths, J. (Llanelly) Milner, Major J. Smith, Ben (Rotherhithe)
Hall, W. G. (Colne Valley) Montague, F. Smith, E. (Stoke)
Harris, Sir P. A. Morgan, J. (York, W.R., Doncaster) Smith, Rt. Hon. H. B. Lees- (K'ly)
Henderson, J. (Ardwick) Morrison, Rt. Hon. H. (Hackney, S.) Smith, T. (Normanton)
Henderson, T. (Tradeston) Morrison, R. C. (Tottenham, N.) Strauss, G. R. (Lambeth, N.)
Hicks, E. G. Nathan, Colonel H. L. Summerskill, Dr. Edith
Horabin, T. L. Naylor, T. E. Viant. S. P.
Isaacs, G. A. Oliver, G. H. Walker, J.
Jagger, J. Parker, J. Watkins, F. C.
Jenkins. A. (Pontypool) Pearson, A. Whiteley, W. (Blaydon)
Jenkins, Sir W. (Neath) Pethick-Lawrense, Rt. Hen. F. W. Wilkinson, Ellen
Jones, A. C. (Shipley) Price, M. P. Williams, E. J. (Ogmore)
Jowitt, Rt. Hon. Sir W. A. Pritt, D. N. Williams, T. (Don Valley)
Lathan, G. Ridley, G. Wilmot, John
Leach, W. Riley, B. Windsor, W. (Hul, C.)
Leslie, J. R. Ritson, J. Woods, G. S. (Finsbury)
Lunn, W. Roberts, W. (Cumberland, N.)
Macdonald, G. (Ince) Robinson, W. A. (St. Helens) TELLERS FOR THE NOES.—
McEntee, V. La T. Silverman, S. S. Mr. R. J. Taylor and Mr.

Main Question, as amended, put, and agreed to.

Resolved, That, recognising the vital necessity of planning to the best advantage the resources of the nation for the successful prosecution of the war and for meeting the requirements of the civilian population, this House recognises the value of the arrangements now in force for the co-ordination of our economic effort, notes with satisfaction the improvement in the export trade, and relies upon His Majesty's Government to take any steps that may from time to time be required to strengthen still further the economic position of the country.

The Orders of the Day were read, and postponed.

  1. ADJOURNMENT. 28 words
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