HC Deb 25 July 1944 vol 402 cc613-702

Motion made, and Question proposed, That a further sum, not exceeding £83,981,473, be granted to His Majesty, to complete the charges for the following Departments connected with the Disposal of Surplus Government Property for the year ending on the 31st day of March, 1945, namely:

Class VI., Vote 1, Board of Trade £1,448,833
Class X., Vote 12, Ministry of Supply £90
Class VII., Vote 4, Ministry of Works £4,162,270
Class X., Vote 16, Ministry of Works (War Services) £90
Class X, Vote 2, Ministry of Aircraft Production £90
Revenue Departments, Vote 3, Post Office £78,370,000
Navy Estmates, Vote 12, Admiralty Office £100
The President of the Board of Trade (Mr. Dalton)

I am glad to have the opportunity to-day of making a statement for the information of the Committee, and with a view to the expression of opinion in the Committee on Government policy with regard to disposal of surplus Government stores. I begin by recalling to the memory of the Committee the answer which I gave on 2nd November last to a Question by my hon. Friend the Member for Westhoughton (Mr. Rhys Davies). I said: There must be, after the war, an orderly disposal of surplus goods, which, on the one hand, will not allow profiteering at the expense of the consumer, and on the other hand, will pay due regard to the interests of producers and distributors. The Government have decided that disposal shall be carried out, in each particular case, through the agency of the Department mainly concerned with the supply of the goods during the war. Before working out the plans for disposal, the Board of Trade, together with other responsible Departments, will consult with representatives of the producers and distributors concerned."—[OFFICIAL REPORT, 2nd November, 1943; Vol. 393, c. 502.] Last week, following a considerable amount of work which has been done on this question, I presented a White Paper to the House entitled "Government Surplus Stores. Plans for Disposal." I should like to say something about that Paper and to add something, beyond what is contained in it, on the subject of Government factories. In dealing with all these post-war problems we should look to see what was done at the end of the last war, examine the mistakes which were then made, if mistakes were made, and then consider how we can improve this time on that performance. That, I suggest, is the right approach to all these problems in which we have precedents in the last post-war arrangements. With regard to disposal, I do not think it will be claimed that the performance of the Government at that time was one of the most striking Government triumphs of that period. I propose to indicate, in order to lead up to what is proposed to be done now, what mistakes, looking back on those days, were made and what we should seek this time to avoid.

In the first place, there was no effective control at the end of the last war over the prices at which dealers were allowed to sell surplus stocks, nor over the margins of profit which could be charged. There was nothing to prevent the most grave profiteering, and cases occurred in which dealers acquired valuable property for knock-out prices and resold them at very large profits. Sometimes very large profits were made by people who never physically handled the goods at all. There were some very wicked cases of profiteering. That was one mistake. The second mistake was that there was no check imposed at the end of the last war on the number of intermediaries who might intervene and deal with the goods in their passage from the hands of the Government to the final consumer or user. In the third place, the Government were willing to sell to any person, whether or not a regular trader in the goods concerned, and in many cases speculators muscled in and secured large and quick profits which served no public interest whatever. In the fourth place, little or no regard was paid last time to the interests of producers, with the result that in many cases the market was flooded with goods, prices were depressed, and immediate advantage seemed sometimes to accrue to consumers, but only at the cost of seriously disturbing and checking production and causing serious unemployment in many of the industries concerned.

Those are the mistakes that were committed at that time, and the plans I am submitting for the consideration of the Committee to-day are designed to avoid, and I hope will succeed, in avoiding them on this occasion. At the end of the last war the conditions were different in important respects from what they will be at the end of this war. There was at the end of the last war little or no machinery for an effective price control or control over margins, and the Government, therefore, at that time had not any effective system to prevent profiteering. I must warn the Committee that, if we did not possess to-day the powers which we do possess for price control, we should be in exactly the same position and equally at the mercy of the profiteer. Fortunately, however, we now have, and we have been using, powers strong enough to prevent that. In the second place, at the end of the last war the relations between the Government, on the one hand, and trade and industry, on the other, were much less close than they are today. There was much less intercourse and co-operation during the last war between Government Departments and representatives of trade and industry. That again makes it easier on this occasion to come to mutually satisfactory arrangements. In the third place, at the end of the last war there was a reckless drive for the removal of all controls at the earliest possible moment, regardless of consequences. Decontrol for its own sake was widely believed in at that time, and the consequences in some of the fields of which I am speaking were very bad indeed. Furthermore, at the end of the last war, the Government of that day had not accepted official responsibility for the maintenance of the highest possible level of employment.

To-day, the background is different and is much more favourable for a rational handling of this problem in harmony with the public interest. We have widespread powers of control over prices and price margins, particularly for consumer goods. Further, there has been growing up a habit of regular consultations between the Government and trade and industry, as a result of which there is a much better mutual understanding on both sides of the point of view of the other. Finally, in the White Paper on employment policy it has been made abundantly clear that, in the view of the Government, many controls must continue during the transition period, whatever may happen beyond. Further than that, the Government have accepted officially in the White Paper responsibility for the maintenance of employment. Against this background, this more hopeful and constructive background, we have been working out these proposals. I should like to pay a tribute to my right hon. and gallant Friend the Parliamentary Secretary to the Board of Trade, who has done a great deal of work on this White Paper on disposals, and has taken part in many consultations. He deserves a large share of the credit, which I hope the Committee will give, for the policy indicated in the White Paper, and I am very much indebted to my right hon. and gallant Friend in this connection, as in many others.

The White Paper deals briefly with the disposal of raw materials. For the most part, it deals with the disposal of manufactured civilian goods. In a phrase which has caught the eye of the Press, the manufactured goods which will have to be dealt with consist of a great variety of articles ranging from typewriters to trucks and from rain-coats to road rollers. Where the Government already have machinery of their own in existence for buying and selling—and there is, of course, a great deal of Government buying and selling in the field of raw materials—the problem of disposal will be much simplified for any surplus which may be thrown up at the end of the war or, indeed, at the end of the European war. With regard to the materials which are traded in already by the Government through one of the controls, they will be disposed of in the ordinary way through the operation of the control, whether by sales or by allocation as now.

I must warn the Committee that, when hostilities come to an end, there will in some cases be very large stocks of certain raw materials, so far as we can foresee, and special plans will have to be made, on the lines I have indicated, to prevent any serious disturbance of markets or production plans or employment resulting from the existence of those very large stocks. We must be careful where those stocks go to; we must see that they are used to the general advantage, but not poured forth recklessly in such a way as to upset our production and employment arrangements. Many Government Departments will require quantities of these supplies and many local authorities will wish to secure some of them—I am speaking now particularly of manufactured goods, and to some extent also of raw materials—and we shall make sure that their requirements will be properly met before any of these supplies are declared surplus and available for the general public. It would be a very uneconomical arrangement first to declare these stocks surplus and sell them off and for Government Departments or local authorities to have to purchase them subsequently.

It is impossible to discuss this problem of surpluses without having in mind the future state of liberated Europe after the Huns have done their worst upon those innocent territories, and there will be great scope for us to make a constructive and human and helpful contribution to the restoration of Europe through the proper use of these surplus goods. We must not, of course, simply think of unloading upon Europe what we do not want ourselves, because that would be a wrong approach to any consultation with the various Allied Governments concerned and with the authorities of U.N.R.R.A. as to how we can best meet their urgent requirements out of our supplies. That question will be gone into with those concerned as we go along. We have to balance our own needs at home, which will be very considerable, with the need of our Allies, who have suffered so much in the course of the war, to obtain relief at the earliest possible moment. The relief of liberated territories will be one of the main destinations of many of these surplus supplies.

In paragraph 9 of the White Paper it is explained, and I am sure the Committee will understand, that we cannot at this stage give with any degree of exactitude any useful estimates of the quantities of goods and materials which will be available at the end of hostilities. We have made certain provisional estimates, but they are very provisional, too provisional to be worth publishing at the present time, because the supplies available will go up and down in accordance with the developments of the war, the requirements of the Armies in the field and the rapidity of the liberation of occupied territories; but a close statistical study is being made, and the estimates are revised from time to time, and when the war comes to an end everything will be properly tabulated.

Sir Granville Gibson (Pudsey and Otley)

On the question of the tabulation of supplies, in the first two lines of paragraph 9 it states that the goods which will probably be surplus "have been" tabulated. It has been done already.

Mr. Dalton

Yes, it has been going on. Many estimates have already been made, but, as I am sure the Committee will appreciate, the quantities may vary from time to time. We cannot tell in advance what will be added to or subtracted from the totals already tabulated. It may be that more surpluses will pile up or that they may disappear if there is a necessity to use them for the purposes of the war; but we are going on with the work, and the Committee may be re-assured that when the moment comes we shall be ready with exact estimates.

In paragraph 10, I would ask the Committee to note, three important questions are dealt with: First, the question of the right rate of release of these supplies, so that they shall not be released either too fast or too slowly; in the second place, the right method of distribution to the public; and, in the third place, the adequate control of prices and profits. With regard to the first question, we have to balance, and balance carefully, the interests of consumers and producers. On the one hand we must not flood the market, whatever the temporary advantages to consumers, because that would be a great mistake in the long run from the point of view of securing stability in prices and production and employment. On the other hand we must not scrap, throw away or otherwise fail to make use of valuable materials which are national assets, which have been manufactured by the labour of our own people, and which would be of value to us or our Allies or to other people at the end of the war.

Having warned consumers that they must not expect unhealthily cheap prices from a flooding of the market, I must warn producers that they must not expect us to create any scheme for the scrapping or destruction of valuable goods, although at first sight that might appear to be to the producers' advantage. Although we must make our plans carefully, there will be no very serious problem, I think, in regard to most consumer goods, because there will be very great shortages in this country and Allied countries and other parts of the world, and I feel that most of the surpluses available will be absorbed fairly readily without there being any danger to the stability of our price structure or on employment. Where surpluses are very large, we must link the rate of release of those surpluses with production plans for the future, and we shall discuss that point with the various industries concerned. It may be necessary in some cases to slow down the rate of release so that it becomes a question of years rather than of months before the total quantity is released to the public. Here, again, we must remember that last time the Disposals Board acted very precipitately. They got rid of everything as fast as they could, and that had some very disadvantageous results. It would be better to take longer in order to retain stability in production and employment.

Dr. Russell Thomas (Southampton)

May I ask one question? Can the right hon. Gentleman give an assurance that he will not give to Europe what will be required here?

Mr. Dalton

I do not think that is the way to approach it.

Dr. Thomas

Why not?

Mr. Dalton

Because there are moral duties which we owe to those of our Allies who have had a much harder war than we have.

Dr. Thomas

Charity begins at home.

Mr. Dalton

No, charity does not begin at home, unless your home is large enough to contain all your friends. If my hon. Friend does not see that, I do not think it is worth my while to spend more time upon it. I think I have already said sufficient on that, and it seemed to satisfy the Committee.

Dr. Thomas

Part of the Committee.

Mr. Dalton

When I said that we should relate our home requirements to those of our Allies, I was suggesting to the Committee that in some cases we should need to spread the release of goods of which there were large surpluses over a term of years rather than a term of months in order to maintain stability. On the other hand, the Committee will agree that we must avoid the opposite danger of having large stocks overhanging the market for a considerable time, because that might have an equally depressing effect upon future production and employment. Therefore, subject to the various considerations I have indicated, our aim must be to get these goods on to the market as soon as possible, and to get them out particularly while there is a great shortage which can be relieved by their distribution.

Passing to the second point mentioned in paragraph 10, the method of distribution, it is not our intention, save in cases where it may really be necessary, as it will be in some cases, to set up any special ad hoc machinery for the distribution of these goods. We want to distribute them as far as possible through the normal trade channels. Reverting to the experience of the last war, we want to prevent these goods from getting into the hands of jobbers and speculating traders not normally engaged in dealing in such goods. As far as we can, we want those who have traded in these goods in the past to be able to continue to do so and for outsiders not to be allowed to come in. We want to interpose as few people as possible between the Government and the final consumers of the goods.

In the third place we must keep a firm control—and I hope the Committee will give me support in this—over prices and profit margins. There will be a great danger of inflation during the transition period—a far greater danger of that than of mass unemployment. Later on the relative importance of these dangers may change, but in the immediate transition period inflation will be much the greatest danger we shall have to face, and therefore it is essential to keep a firm grip, as we can under the existing statutory powers, upon prices and profit margins.

Mr. Bowles (Nuneaton)

May I put one question upon a point which seems fundamental? Does this visualise the disposal by the Government of Government stocks through private traders who will be making profits for themselves?

Mr. Dalton

Yes, but what I am saying is that the profit must be controlled.

Mr. Bowles

It will be profit out of Government stocks.

Mr. Dalton

The alternative would be to set up new ad hoc distributing machinery. That we are not in favour of, because in our view it would mean a great waste of manpower and administration at this time. We cannot afford to set up additional machinery to do work which can be done by existing machinery. We must have some sense of economy in these matters.

Sir George Schuster (Walsall)

May I ask my right hon. Friend to talk in future about fair remuneration for services and not about profits?

Mr. Dalton

No, I shall use the terms that are commonly understood: "Margins of profit" is a commonly understood expression. What I was saying, when my hon. Friend rathered widened the area of discussion, was that we must continue to have la firm control over prices and profit margins. If we do not, we shall get inflation, and I do not think the Committee, and certainly not my hon. Friend, would want to see that. At the same time, when goods are in very short supply, these surpluses will not be thrown open to what I may call an auction sale. Prices will be fixed and regulated, and there will be an equitable distribution of the goods subject to price control. It will be our purpose to keep the gap between the price received by the Government for the goods and the price paid by the ultimate consumer as narrow as possible subject to the requirements of an efficient distributing system.

Now may I direct attention for a few moments to paragraphs 11, 12 and 13 of the White Paper, in which we describe the next steps in connection with this scheme? Consultations will take place— in a number of cases consultations have already begun—or will be continued with the representatives of the various industries and trades concerned as to the best method of disposing of the articles in which they are interested. In addition to discussions which have been taking place, and will continue to take place, with particular sections of industry and trade, we have also had certain discussions with national bodies, and we shall continue to keep in touch with them. The Federation of British Industries and the General Council of the Trades Union Congress have both expressed approval of the general principles on which the Government propose to proceed. I am encouraged—I hope no hon, Member of this Committee will think I should be discouraged—by the knowledge that the national bodies representing both sides of industry think that this Government is planning better than the Government of 1919.

In paragraphs 17 and 18 of the White Paper there is some indication regarding the administrative machinery that we propose to set up. In the light of the experience of last time, which was not a very fortunate experience, we have rejected the idea of having one single Disposals Board. We are going to require each Department of the Government to play its part in this scheme, and for each class of goods we shall make one Department—I will explain in a moment which Department—and one only responsible for collecting, tabulating and cataloguing the goods in the Government's hands. The Department chosen to do this, will be the Department which has had most to do with the buying of those goods during the war. Generally speaking, it will be the Ministry of Supply, but there will be some cases, as I have indicated, where other Departments will perform this function. For certain classes of goods the Ministry of Works or of Aircraft Production, or the Admiralty, or that great public enterprise the Post Office, will be the Department designated for this work.

On the other hand there are other functions to be performed in regard to disposal. There is the question of negotiating with trade and industry about the rate of release, the manner of distribution, the fixing of prices and profit margin. These are matters in which the Board of Trade has had the chief experience during the war and, generally, the Board of Trade will be charged with this duty in regard to most classes of goods for disposal. But here, again, there will be exceptions as indicated in the White Paper. There are some cases where Departments, other than the Board of Trade, with special experience, will deal with particular classes of goods. Internal combustion engines, for example, will be dealt with by the Ministry of Supply, builders' materials by the Ministry of Works, and navigational instruments by the Admiralty. That, again, I think, is common sense, but there will be two separate functions, the function of collecting, tabulating and cataloguing the goods and the function of arranging for release, distribution, and price control. We have an inter-departmental machinery which is working smoothly as between the Departments concerned, and this will be found, I think, the most effective way of handling the problem.

May I say one further word about stores and stocks which will be found abroad? So far, I have spoken of the need for a regulated and orderly disposal of the United Kingdom Government stocks in this country, but, of course, if we limit ourselves to that, we may have some unfortunate reflexes through the, possibility of unregulated and disorderly disposal of stocks owned by other Governments, or of our own stocks and stores held abroad. That is a danger against which we must guard, otherwise all those troubles, the flooding of the market and so on, which I have been speaking about, may be brought about by the precipitate and disorderly release of supplies held abroad either by other Governments or by ourselves. We are in consultation with other Governments, including the Governments of the Dominions, on the subject and we shall try to get their action concerted with ours. We have no reason to doubt that they will follow the same line and have the same general view of the subject as we have.

I would like, at this stage, to pass to another matter not dealt with in the White Paper, namely, the question of Government factories. Here again, I would preface my remarks by returning to the answer I gave to the hon. Member for Westhoughton on this subject on the 2nd November, 1943. I then said: The Government have further decided that the Board of Trade, through its Factory and Storage Control, shall co-ordinate the disposal of all surplus Government factories. With a view to decisions being taken as to the best use to which these can be put in the national interest, the Control will compile lists of factories and of applicants for them. The Government recognise the importance of reaching such decisions before the end of the war in as many cases as possible, but much must depend on the course of events, including future programmes of war production. And I added: Special attention will be paid to the release of factories urgently needed for peacetime production, and to the possibility of converting into trading estates some of the premises no longer required for Government work."—[OFFICIAL REPORT, 2nd November, 1943; Vol. 393, c. 502.] Since then, we have been studying the matter closely within the framework of that declaration and the Government have recently been considering, in par- ticular, two questions of principle regarding Government factories. The first is, are these to be disposed of to the highest bidder or, in the alternative, should they be allocated by the Government according to broader social and economic criteria? The second is should these factories normally be sold or should they normally be leased to the particular applicants? [Interruption.] These are the questions and, if my hon. Friend will wait, I will answer them. I am now in a position to give the answers. The Government have decided that competitive bidding would not give the best results. An auction sale here would not be more serviceable to the public interest than with other goods in short supply. During the next few years there will undoubtedly be a shortage of good, modern factory premises and, unless suitable control is exercised, competition might cause artificially high prices and result in factory space being used for less essential production. We should regard the control and location of Government factories as being one aspect of the general policy laid down in the White Paper on employment of meeting our more urgent home and export demands in front of less urgent and less essential requirements.

Therefore, in the location of factories, the Government will take account of the following considerations: First, the establishment of a balanced distribution of industry in the particular area where the factory is situated, and of the contribution which the factory can make to local employment in the area. Secondly, the need to expand our export trade. Thirdly, the need to maintain a suitable war potential in the years of peace. Fourthly, to the requirements of town and country planning, and fifthly, to the ability of the various applicants for factory premises to make efficient use of such premises with the minimum of reconstruction. We do not want to have a factory pulled inside out if, in fact, someone can get on with useful work in that factory with less reconstruction. Therefore, it is the intention of the Government to have the allocation of factories after the war settled in accordance with those criteria, which I have indicated, and not in accordance with competitive bidding by the various applicants.

Sir Percy Harris (Bethnal Green, South-West)

Will the present occupiers of fac- tories be encouraged to prepare blueprints now, with a view to using the factories themselves after the war, rather than that they should be transferred to other owners? I understand that in America much has been done in that direction.

Sir Irving Albery (Gravesend)

Before the right hon. Gentleman replies, will he say whether the ability of the proposed technical user to contribute to expansion of trade and employment will be taken into account?

Mr. Dalton

Certainly. What I said was that we are going to take account of the contribution which can be made by any factory in the hands of a particular person to a balanced distribution of industry, to local employment, to the expansion of the export trades, and so on. Obviously, we should assess the ability of the applicant in the light of these considerations. My right hon. Friend asked whether existing users would be encouraged to go on. There will be some cases in which it will be useful that they shall, but in others not. In the procedure laid down existing users will be among those who can apply to continue to use the factories, and they will be considered along with other applicants, and the Government will reach a decision on the lines I have indicated as to who can make the best use of the premises.

Sir P. Harris

If existing users knew that they were likely to be allowed to continue in occupation, they could prepare blue prints for peace-time purposes, and so be able to get on without any break.

Mr. Dalton

We will bear that in mind, but we cannot lay down a rule that they are to have a higher degree of preference over other people who might, for peacetime purposes, be able to make better use of the factories.

Mr. Gallacher (Fife, West)

In view of the fact that the Government will have the responsibility of deciding what the factories are to be used for, will any consideration be given to the Government themselves controlling and running the factories.

Mr. Tinker (Leigh)

Is there any thought in the mind of the Government that they might use the factories in the interests of the nation?

Mr. Dalton

I think a number of these questions can be answered if I am allowed to proceed. I have not finished what I want to say on the subject. I was saying that on the first question for consideration—what purposes these factories should be used for and who should use them—that we have rejected the principle of competitive bidding and that the Government will consider in each particular case what is the best use to which the factory can be put as between the various applicants. I said this, also, in reply to a supplementary question on the 2nd November, 1943, that the Government may, in some cases, continue to hold and use the factories. But I was going on to say that on the second point, as between the leasing and selling of factories, the Government have decided that we should not lay down any hard and fast rule to cover all cases, but that the normal procedure for the disposal of factories should be one of leasing and not of selling. Although there may be cases where outright sale, in appropriate instances, would be preferable, the normal procedure will be leasing for a suitable term rather than selling.

There are a number of reasons why this procedure is to be preferred. In the first place, it will take some time for the prices of factories to settle down to anything approaching a stable level. Further, many firms, including small firms, will prefer not to lock up their resources in the purchase of factories or to borrow from the banks in order to purchase. They will prefer—and indeed this is already our experience with many firms—and will be more interested in a lease for a suitable term than in outright purchase. Finally, and I commend this reason to hon. Members on the Benches opposite, there is much to be said for leaving over further consideration, perhaps in a new Parliament, the final disposal of this group of public assets.

Mr. Gallacher

Hear, hear.

Mr. Dalton

I am glad to get my hon. Friend saying "Hear, hear." Therefore the Government's decision that the normal procedure should be leasing rather than selling, is supported by several arguments which will commend themselves, I hope, some to one section of the Committee and some to another. This total argumentative weight is very great. I hope that I have succeeded in making clear to the Committee the general lines on which the Government propose to proceed in regard to the disposal of stores, and factories. I shall be grateful to the Committee for any suggestions that can be made in the Debate, as to how these principles can most effectively be carried out, so as to avoid, in the light of our very unfortunate experience at the end of the last war, any repetition on this occasion.

Mr. Ellis Smith (Stoke)

A great responsibility rests upon this Committee because, by inference, after the right hon. Gentleman's statement, we are to determine to-day the view of this Committee in regard to the large-scale expenditure of public money which has been carried through by the various Departments, whose Votes are on the Order Paper. In my view to-day's Debate should be linked up with the last Debate we had on the Board of Trade Vote and on the Government's White Paper on full employment. The White Paper that we are considering to-day should be read in conjunction with the 77th Report received from the Select Committee on National Expenditure. This Report correctly interprets what we are considering to-day—State-owned assets—and it is a thorough indictment of the policy contained in the White Paper now before us and the right hon. Gentleman's statement. I hope in the short time available to me to produce evidence to prove the statement which I have made.

During the past five years we have voted one blank cheque after another, and many of us have wondered whether we were doing right in allowing them to go through. There has been no objection worth talking about from any section of hon. Members. The main view, during the time that these blank cheques have been given to the Government, has been that we did not want to say or do anything that might be interpreted as impeding the successful prosecution of the war. On grounds of public security, we have been given little information. Let me make it clear that I am not complaining about that, but this Committee has a great responsibility in seeing that the millions of pounds' worth of State-owned assets are utilised in the most efficient manner. Much public money is at stake, and the people of the nation are entitled to know how their own property is to be dealt with after the war. Let me remind the Committee that the war is being fought for the preservation of democracy and that it is time that we had some instalment of democracy in this country.

Apart from pre-war Government assets, equipment that can only be of use in war, and the scrap that will inevitably arise on the termination of hostilities, I estimate that at the end of the war this country will own, at the very least, £2,000,000,000 worth of assets. If we compare that figure with the figure of pre-war private investment, which was about £305,000,000, we are able to make a correct approach to the problem that we are considering. There are great potentialities in these State-owned assets, and a Government who were framing their policy upon a modern and a big outlook, would not approach the question as the White Paper approaches it. The White Paper in paragraph I does not deal with the disposal of fixed assets, such as buildings, factories or machine tools. I was very pleased that the President of the Board of Trade dealt with this question, and brought those matters into the discussion. Paragraph 2 of the White Paper says: The Government-owned stores which are likely to be surplus to requirements may be divided into three classes. Reading those two paragraphs together I see the danger signal. Also my hon. Friends will let it be known that they see it, and I hope that we shall make our own position quite clear on this question. The Deputy Prime Minister is present and I put it to him, and I hope the Government will reconsider this question in the light of to-day's Debate. The White Paper is entitled "Plans for Disposal", but it should not be so entitled, because no plan is proposed in it. There is no co-ordinated policy although, with the European situation changing rapidly, the question becomes one of urgency. To judge from the White Paper, the Government do not seem to look upon the question as urgent. I contend that we should have been presented to-day with a report containing a plan for an organised utilisation of State-owned assets. Those of us who have been trained and brought up in industry have had to work to plans and drawings, and we know the difference between that approach and the approach of some Members of the Government to these problems. Had the White Paper been drawn up on that basis, it would have contained a specification upon which real plans could have been made. It could have formed the basis of several five-year plans, each based upon a development of State-owned assets in this country which would have become greater than ever, as soon as hostilities terminated.

After the war several Ministries will be abolished, but the Ministry of Production should be retained and it should be changed into a Ministry of Economic Development, charged with the general allocation and utilisation of Government assets. I believe that Governments of the future will have to approach economic problems and world affairs in a far bigger manner than they have done in the past. Had the war been prosecuted in the way in which most political parties approach the question now before the Committee, we should never have pulled through. What applies to the successful prosecution of the war applies equally to the new world that will have to face the post-war economic problems of the world. This country must be able to hold its own and represent the people; we are determined to do all we can to secure the right result. The Ministry of Production should be changed, in order that it can plan this country upon a basis of our economic needs. If this suggestion were accepted, we should have planned industrial development, using our industrial resources, and not disposing of them as is proposed in the White Paper. It would be a disposal of the national surplus in the interests of the nation and not in a way which will mean that pressure can be brought to bear behind the scenes. Paragraph 8 of the White Paper states: Steps are being taken to co-ordinate the needs of Departments. I welcome that statement; but later on we read that these Government Departments are to be responsible for the disposal of the stores. That is not good enough, even from the point of view of the present Government. There should be a central authority, an economic general staff, to see that Government assets are disposed of in the best interests of the nation. I would draw the attention of the Committee to what I consider to be some very fine work done by some hon. Members, which has not received the encouragement that it should have. I refer to the Committee which meets from time to time to consider national expenditure. In the Report issued dealing with State-owned assets, this Committee states, in paragraph I: The expenditure with which your Committee are dealing in this Report represents a substantial accumulation of State-owned property, the post-war use of which will inevitably be the subject of decisions that will have important financial implications. It follows therefore, that, if waste is to be prevented, the taking of such decisions must be preceeded by the assembly and classification of all necessary data concerning the assets involved. In paragraph 2, the Committee goes on to say: The decisions which, sooner or later will have to be taken concerning State-owned assets," etc. My final reference is from paragraph 3, where it is stated: Your Committee are satisfied that no central agency has as yet undertaken"— "as yet," remember, in the fifth year of the war— the comprehensive collection and coordination of records of State-owned assets. The absence of such central machinery is likely to hamper the taking of important decisions, and to cause confusion and waste. In paragraph 10, there are some excellent suggestions, but I would like these to be carried to their logical conclusion. In the view of my hon. Friends, the war-time utility policy carried out by the Board of Trade has been a very fine piece of work. It has been responsible for the best value that the ordinary people have ever received in the history of this country. It has been a contribution to the stabilising of prices and the maintenance of economic stability and the prevention of inflation, but one would have thought that this would have been carried in this White Paper to its logical conclusion. Here is the basis for the continuation of this policy after the war. For example, last week, I listened to the Minister of Health and the Secretary of State for Scotland. There is no doubt that they were greatly concerned about the post-war housing position. Those of us who came back after the last war and who had our hopes dashed to the ground and were subjected to frustration and disappointment, can never forget that. We hope that these young people, who have served us well in this war, and have saved this country, are not to have a repetition of that kind of thing. The housing problem will be a tremendous one. Here was an opportunity for the Government to carry this war utility problem into the post-war situation. Houses need not only roofs and walls, but fittings, built-in furniture, electric lighting and all that kind of thing. One would have thought that the Government would have planned, in a real way in this White Paper, and provided some machinery for utilising Government-owned assets in this way. I have felt deeply for a long while the position in this country between the two wars. The chain stores in this country made profits of anything between 20 and 40 per cent., while men who had developed themselves technically, in order to manufacture turbines, locomotives and all kinds of engineering products could get, on the capital sunk in those industries, a maximum return of say 6, 8 or 10 per cent. There is something fundamentally wrong here. One would have thought that the Government would have seen this, and that instead of leaving it to chain stores to be responsible for the disposal of all these kinds of fittings, they would have organised, in the same way for peace as for war, to provide these young men and women of ours with household utensils and electric fittings at the earliest possible opportunity. I hope the Government will consider that aspect of the question.

Let me quote again from the Select Committee's Report on assets. They give a category of the assets which are now owned by us but which, if we allow this to go to-day, will not be owned by us for long after the termination of hostilities. One is able to get some idea of State-owned assets—factories, camps, hospitals, hostels, general stores of all descriptions, electric current installations, railway sidings, canal wharves, tractors and agricultural machinery, ships and craft, dockyards, floating docks, jetties, launching ways, slipways, grain elevators, furniture and equipment of all kinds. I have read this Report very carefully and I am not doing justice to it on account of lack of time, but I hope other hon. Members will quote from it. I shall cut out a fair amount of what I was going to quote and content myself with this quotation: Your Committee were surprised to find in the fifth year of the war not only that no central assembly of records has been undertaken, but that no instructions have been given to Departments in order to ensure that their inventories are kept in such a manner that they can be fitted into a common scheme. If at the end of the war waste and confusion are to be avoided, your Committee consider that immediate attention should be given to this subject. I wholeheartedly agree with that conclusion, and anyone who knows anything about the matter at all must do the same.

It is elementary business to keep records and inventories in business. Large-scale modern management realises it is a good business proposition to incur overhead charges in order to keep records and inventories. We have a national Budget each year and we are now provided with what I consider a very fine annual Financial White Paper. We are able to see at a glance our economic position each year. If that is right it is right that we should have a national inventory made of State-owned assets in order that people may know where we stand, I put a Question on that subject on 29th June, this year, to the Chancellor of the Exchequer. This is the relevant passage in the Chancellor's reply. I do not think that a central inventory of State-owned assets would be either practicable or useful."—[OFFICIAL REPORT, 29th June, 1944; V. 401, c. 790]. I leave it to the Committee to come to their own conclusion.

Government-owned assets should not be disposed of in the way proposed in the White Paper, which, in my view, is a "jumble sale" approach to this question. In my view these Government-owned assets should be used for providing a basis for expansion at home and abroad. The Committee to which I refer gave a long category of State-owned assets which I have not time to mention apart from a few. There are cars, "jeeps," lorries—and those of us who have visited the Army Equipment Exhibition have seen all the very fine work that is going on—mobile workshops, mobile dentists, mobile first-aid and mobile lighting sets. I never forgot the 1936 Economic Report on the state of our Colonies, in which I read about the terrible conditions that existed in the West Indies. The same applies to many parts of Africa and many other parts of the Dominions. These places need developing. Here is an opportunity. There are cars, agricultural implements of all kinds, mobile workshops, and other equipment. The West Indians and the Africans could be providing us with the fruit, food and materials we need. Here we see a basis of real economic co-operation within the Colonies and the Commonwealth, but there is not one word in this White Paper in regard to that.

Lieut.-Commander Joynson-Hicks (Chichester)

I do not know if the hon. Member is unaware that last week this question was raised, and the Secretary of State for the Colonies distinctly said he would have the "first whack," out of the surplus available, before it came up for disposal.

Mr. Dalton

I did not interrupt my hon. Friend as I wished to give him an opportunity of developing his argument, but I endeavoured to make clear that any Government Department here or any public authority here would be entitled to have its requirements of any of these supplies met, before any surplus was declared. All the things he has in mind can be perfectly well done under that provision.

Mr. Smith

I heard that Debate and took careful note of it. My hon. Friends and myself were not satisfied with the reply that was given. As a matter of fact our interpretation of what was said, was that up to that time, there had been no consultations with regard to it, and that while it was the desire of the right hon. Gentleman that that should take place, little or no consultation had taken place. With regard to what my right hon. Friend has said, it is quite true, but it ought to be in this White Paper. We ought to have a real plan for this purpose. That is my complaint. [Interruption.] While there is reference in the White Paper, it is only a slight reference when one considers the big problem with which we are faced.

These State-owned assets should be distributed as loans to the Dominions and Colonies, to India and China, and other countries that require them. In that way we could start at once the flow of goods and build up the means of payment for our imports, and lay the basis for real economic co-operation. This would be a contribution to a high and stable level of employment. I want to put a question to my right hon. Friend. Has the Colonial Secretary been consulted with regard to this White Paper?

Mr. Dalton

Yes, of course.

Mr. Smith

And the Dominions Secretary?

Mr. Dalton

of course.

Mr. Smith

And the Secretary of State for India? Were they consulted before this White Paper has been issued?

Mr. Dalton

My hon. Friend may take it that a White Paper of this kind is not put forth until all Ministers of Cabinet rank have had an opportunity of seeing it and commenting upon it, and it has become a document of Cabinet status. They have all been consulted.

Mr. Smith

Then we can take it the Colonial Secretary and the Secretary of State for India have been consulted on this White Paper?

I have a letter here, dated 3rd July, from the Chancellor of the Exchequer to my hon. Friend the Member for Llanelly (Mr. James Griffiths). This is an extract from it: You are, of course, aware of the two Admiralty camps, one in Caernarvonshire and one at Ayr, one of which has been discussed in the House, where the Admiralty have undertaken to sell them to Messrs. Butlins when no longer required. There is one War Office case on the same lines at Filey, Yorkshire, which was agreed at about the same time as the Admiralty cases. I want to ask some questions on which I should like specific answers to-day. Who arranged this sale? Were other holiday organisations given an opportunity to purchase? What are the terms of the disposal? Have they been published? Who took part in the negotiations? Is it a fact that there are mountains of ore near Sierra Leone? Who is responsible for the large capital expenditure that has taken place there? Is it public money that has been sunk there, and if so, what is to become of it after the war?

I think this country will became deeply involved in controversy over this question, unless it is handled differently from the way it is being handled at the present time. After the last war there was, in America, a large nitrate works, one of the largest in the world. Several big concerns desired to take it over after the war. There was a big public outcry against the proposal because the American public did not agree with it. The result was that the Government had to abandon their scheme to dispose of this nitrate works. In 1933, President Roosevelt—I ought to say, courageous President Roosevelt, not only because of his record in this war but for what he did on that occasion, and I can never forget meeting big business men in this country and seeing their attitude towards what President Roosevelt did at that period—proved he had courage and vision. President Roosevelt suggested that this nitrate works should form the centre of large scale development, and as a result we got the beginnings of the development of the Tennessee Valley Scheme. This is a great example of democratic planning, and the utilisation of State assets in the national interest. It was real democratic planning, and was bound to raise the best emotions in people who have any regard to this kind of thing. Mr. John Winant wrote a preface to a book in which he said: Vested interests in the United States fought it with a bitterness that has seldom been equalled in any controversy. What I am asking my right hon. Friend is to see that we do not have a repetition of that kind of thing in this country. Today we are considering how best to utilise the State-owned assets that have been developed because we have been fighting in the world battle for the retention of freedom. We have been fighting to retain democracy, and, in our view, the State-owned assets should be used for the purpose of building a greater democracy than ever man has dreamed of in the past.

Sir Harold Webbe (Westminster, Abbey)

I do not wish to follow my hon. Friend the Member for Stoke (Mr. Ellis Smith) in the rather wider matters which he has opened, both in regard to the disposal of real property and in regard to the continuance after the war of trade controls, utility schemes, and so on. My excuse for intervening in this Debate is that I was, at the end of the last war, as a civil servant, very intimately concerned with those distressing experiences of the Disposal Board, to which my right hon. Friend the President of the Board of Trade made reference in his speech. I think that he painted a rather gloomy picture of the work of the Disposal Board and I would express the hope that he may find that the scheme which he is now launching will, in the ultimate event, be free from any of those unfortunate experiences and those causes of criticism which naturally followed the work of the Disposal Board at the end of the last war. I think my hon. Friend the Member for Stoke was just a little unfair to the President of the Board of Trade in demanding precision, figures, detailed plans, and detailed proposals at this stage of the war. It seems to me that my right hon. Friend was perfectly justified in saying that the position in regard to surplus stocks—and that is what the White Paper is concerned with in the main—is so fluid and so rapidly changing that it is quite impossible at this stage to bring forward precise and definite proposals, based on known facts. But I admit that I have some misgiving, arising not only from the speech of my hon. Friend the Member for Stoke but from the White Paper and from the speech of my right hon. Friend himself.

As to the principles which have been laid down to govern this very big and important business of disposing of surplus Government materials and stocks at the end of the war, there can, I think, be no argument. The principle that, in the first place, the responsibility for initiating the disposal must lie with the Department which has been primarily concerned with the acquisition of the goods is not new. The old Disposal Board was, in fact, the child of the Ministry of Munitions, was responsible to the Minister of Munitions, and was very largely staffed by officers of the Ministry of Munitions, who had been responsible during the war for the purchase of the stores. The principle that the distribution of the goods should be made through normal trade channels is one which on this side, at any rate, we welcome, and regard as businesslike, sensible, and practical. That there should be some regulation of prices, in order to prevent the exploitation of the consumer, is clearly desirable, and we are, as my right hon. Friend has said, in possession of machinery which can be used to that end. The position that the flow of disposal should be so regulated as to avoid flooding the markets, again, is commonsense and unexceptionable.

My misgiving arises from this consideration. As it seems to me, the success of this vast enterprise must depend very largely on how these principles are in fact carried out and on where the control and regulation by Government Departments stop and the normal channels of distribution are given a free hand to get on with the job. If we are to judge from some of the questions put to my right hon. Friend and from the speech of my hon. Friend the Member for Stoke, they will be a very distinct cleavage of opinion. There seems to be on the other side of the Committee a strong feeling that this job should be done almost throughout by State agency. I am entirely in agreement with my right hon. Friend that that policy would be fatal, would be expensive, would be disastrous to industry, and would, in fact, lead to a position of complete chaos and virtual stagnation in the business of disposal. But even in the White Paper and in the speech of my right hon. Friend I detected a tendency to retain State control further than I believe it should be retained, and to make it too detailed and more comprehensive.

The theory that the Department which has purchased goods is the best Department to dispose of them is that kind of dangerous half-truth against which we must beware. Purchasing and sale are not the same business. The personnel of purchasing Departments has to be different in character, with an entirely different outlook, from the personnel of a selling Department. Their contacts are different. Those officers of the Ministry of Supply who have been engaged in purchasing goods have been concerned to contact all the manufacturers and producers of those goods, and it may well be that they lack contacts with the consumers or with those who can distribute to consumers. Therefore, at the earliest stage, there must be close consultation between those officers and manufacturers, merchants, and others, so that they may find the right channels of distribution. Then there is a suggestion that the Ministry of Supply shall be responsible for reconditioning second-hand goods. I am not querying that, but reconditioning is only a small part of the problem. A very much greater part of the problem is that of remaking or modifying goods which are not suitable for ordinary civilian use, in order that they may be made so suitable. In fact, throughout the speech of my right hon. Friend, and in the White Paper, the problem, I feel, was envisaged rather too narrowly, and was concerned with the disposal of those goods, picturesquely referred to as "embracing everything from raincoats to road rollers," which have a normal civilian use, and can be disposed of through the ordinary channels.

So far as those goods go, all the controls and so on which my right hon. Friend envisaged can be made to work without any serious detriment; but the fact is—and I am quite certain that experience after this war will be similar to experience after the last war—the vast majority of the surplus stocks which the Government will have to get rid of will be goods which are not normally used by civilians, and which have no direct civilian use at all. That will be the great problem. Even where the goods are ordinary civilian products, the stock which will be left in the hands of the Government will be completely unbalanced. I do not know if my right hon. Friend ever visited any of the great engineering supply depots in France at the end of the last war. I spent a great deal of time at Audricq. There one realised what a hopelessly unbalanced and frightfully wasteful business war is. It is only when you come to clean up the mess that you realise that. I remember seeing at Audricq a pile of jim crows. Jim crows, I think everyone knows, are devices for straightening rails. There was a pile sufficient to equip the whole of the railways of Europe, and to leave a big balance over. To talk of disposing of these through the ordinary trade channels is just nonsense. There was only one thing to do, and that was to scrap them. There were mountains of contractors' barrows. There were rows and rows of gantry cranes. Things that you normally buy one at a time were there not in dozens, but in hundreds. It is that completely unbalanced nature that makes the problem of the disposal of surplus something quite different from the ordinary commercial problem of getting rid of a reasonable balanced stock.

There will be, undoubtedly, very large quantities of material which will be of uncommercial sizes and uncommercial types. One actual case, which was one of the jobs I personally had to do after the last war, was the disposal of a stock of high-speed steel. The stock of highspeed steel was not only large, but for the major part it consisted of sizes and types which are never used in ordinary industrial practice. There was only one thing to do, and that was to scrap it, and hope that the inclusion of it in the ordi- nary melt would not actually damage the melt, instead of improving it.

Mr. Bowles (Nuneaton)

Does not that prove that the ordinary channels of distribution are not very good for these things, and that, therefore, the Government might use them themselves for national development schemes?

Sir H. Webbe

I am coming to that; but, when one speaks of using for national development schemes things of a character which no one has ever used, or could use, in ordinary civilian work, one is, if I may say so, talking just nonsense. The only possibility is to get a great many of these things back into the scrap pot, and to start again. There is another group of goods for which there is no user along the line for which they were originally intended, but for which some alternative use could be found. There was at Zeneghem in Flanders a great dump many square miles in area, covered with signal stores, including many thousands of miles of signal wire. You could not sell that amount of signal wire, but it was bought by a group of scrap dealers, under a profit sharing arrangement, and they farmed out this stuff and found alternative uses for it. If we are going to have these precise attempts to fit everything into its proper pigeon-hole, and to use everything for its right purpose, none of us will ever see the end of the job. Only three months before the present war began I bought, for tying up fruit trees, some signal wire which undoubtedly came from that dump. For many of these things it is quite impossible to follow ordinary methods of disposal. It is quite impossible also to apply ordinary methods of control.

My right hon. Friend was at great pains to make dear that the Government are going to see that no one makes speculative profits and that everything, including the margins, is controlled. I remember attempts of that kind in the disposal of stocks before. I remember one contract made in France for the sale of some thousands of tons of screw pickets—the screw standard to which they fastened the wire on the front of the trench. It was a perfect contract, from the Government point of view; everything was completely tied up. There was only one little clause in the contract, which appeared perfectly reasonable, but which gave the French purchaser the right, if the material did not come up to the tonnage prescribed in the contract, to take other materials at his choice. At the point at which I first met that contract, there was a deficiency of some 2,000 tons in the quantity which had been sold, and the Frenchman was being persuaded, or, rather, was kindly consenting, to accept an equivalent tonnage in machine tools at £6 a ton. That was a very expensive contract for the Government, and it cost them quite a lot of money to get out of it.

There was another case which I met in this country, in connection with another type of store, where every precaution was taken, the margins were prescribed to a decimal point and the exact method and rate of disposal were laid down. It was a contract such as we are very familiar with in war time—the sort of "heads I win, tails you lose" contract. No one but a complete fool could afford to sign the contract, and the man who did sign it was a fool. After a brief struggle, during which he tried to keep above water, he went bankrupt, and the Government were left holding a very expensive baby and with no possible redress. I suggest that, if the Government are going to make contracts which completely tie up a person, they will find in the end that the man who signed the contract is either a knave or a fool, and, either way, the Government would suffer.

Mr. Gallacher

So are all business men, knaves or fools.

Sir H. Webbe

Interjections of that kind leave me quite unmoved. There is no one in this Committee, on either side, who is prepared to work for nothing. If you ask people to take speculative risks, you are bound to give some opportunity for speculative profit, and to leave it to the Chancellor of the Exchequer to see that not too much benefit goes to the private individual.

That brings me to my last point, which is dealt with in a short paragraph in the White Paper—the disposal of munitions of war. The position at the end of this war is likely to be, I imagine, not very different from that at the end of the last war. On the one hand, our stocks may well be very much greater because of the greater size of our Armed Forces. On the other hand, some of us hope that, at the end of this war, we shall not permit the mistakes we made last time and denude ourselves of all our weapons until, at any rate, we are certain that there is no possibility of a repetition. There may be compulsory national service, and the stocks we should have to retain would, necessarily, be very large. I am going to put in a personal plea for a small item of stock to be kept by the Government—small arms and small arms ammunition—to be placed at the disposal of people like the National Rifle Association. This country was once a nation of bowmen, and I think there is no reason why it should not be a nation of riflemen. If you could have all your recruits trained shots, you would have very much better material to work upon. There will be, in any case, vast quantities of ammunition and warlike stores surplus to our requirements.

I wish earnestly to plead that, when the time comes to break this ammunition down, the Government will not repeat the mistake made after the last war, of saying that the Government factories which filled the ammunition are the right people to break it down. On that matter, I can speak with personal experience. I saw, week by week, the cost returns from the Government factories breaking down ammunition. In practically every case, the value of the recovered scrap was not more than the cost of recovery, and, in a very large number of cases, it was substantially less. Yet, there were private enterprise firms ready to buy this material from the Government and to undertake the work of breaking it down themselves. In fact, the Government reversed their policy, and actually sold by far the larger part of this filled ammunition to be broken down by private enterprise. That was done far more quickly and at a better bargain for the Government. Whatever arguments may be addressed to the Minister in favour of retaining State factories, I hope that, in the case of breaking down ammunition, he will look at the result of what happened after the last war and will think again.

This is an extremely difficult job. It is complicated almost beyond belief. I accept the position of my right hon. Friend that one cannot, at this stage, make precise and detailed forecasts. But I do hope that in considering the further details of this plan, he will realise that the close control of the distributive agencies in industry and commerce, which you could apply with some reasonable hope of success to goods normally suitable for civilian use, cannot be applied over the field of a vast volume of goods which have no civilian use, and have to be adapted and made suitable for other purposes. Finally, one word in regard to scrap materials. There is, I am certain only one way to deal with scrap materials and that is to get the people experienced in handling them to sort them out, grade them and dispose of them. They alone know how to do it, and if you try to do it in Government factories you will be in for trouble. I can only wish my right hon. Friend good fortune in carrying out his plans.

Sir Granville Gibson (Pudsey and Ottley)

I was very much interested in the speech of the hon. Member for Stoke (Mr. Ellis Smith), and particularly in one remark in connection with a scheme carried out in Tennessee, which my hon. Friend said was a case of democratic planning in the national interest. I have read this White Paper through time after time, and I have tried my very best to find some points on which I could be critical of the Minister. A few weeks ago, my right hon. Friend at that Box defended the White Paper on the location of industry, on which I had some remarks to make, but on which occasion I was not fortunate enough to catch the eye of Mr. Speaker. But, try as I would, I could find no criticism in respect of this White Paper, and I can imagine no scheme more democratic than this.

The Minister said that, in the last war, there was no control of selling prices or any limitation of profits. There was no check on the number of intermediaries. The Government were willing to sell to any person who came along, and there was no machinery for controlling margins, but there was a definite urge for the abolition of control. That was perfectly true and I think it right that he should point it out to us, and also the necessity of going on the right lines in future. The mistakes to which my right hon. Friend has referred played a great part in the depression in this country in the years between 1921 and 1925 by flooding the market with high-priced goods, in many cases in 1919, when the market was a boom market. Because of the stoppage in the purchase of new materials, due to the market being filled through the unloading of immense quantities of disposal stocks, a depression started, because manufacturers of consumer goods had no trade to carry them over that period. The result was enormous unemployment throughout the country between 1921 and 1925, and I am very grateful to the Minister for having pointed out that very important point.

The Minister also dealt with a matter on which, it is stated in the White Paper, there will be a separate announcement later—that is, land, buildings and factories. The point is, therefore, really outside the White Paper, but it is one of very great interest and will be of great interest to industrialists all over the country. The Minister stated that there was to be no competitive bidding, under his new scheme, for buildings, and no hard and fast rule as to leasing or selling, but that, generally, buildings will be on lease. That may be wise to a certain extent, but we must never lose sight of this fact—that the man who owns a house is always prepared to put far more into it than the man who rents one, and it will be the same with these national factories. While, in many cases, as the right hon. Gentleman has pointed out, it would be to the great advantage of some employers to lease these buildings, because of the fact that their financial strength may be limited, eventually it will be for the good of the buildings themselves that they should be owned by those firms. When they became the owners they would be prepared to put more into the buildings and expend more money on them in order to make them produce more economically, whereas they might hesitate to do that if they were only renting them: [An HON. MEMBER: "On long lease?"] It is rather problematical. What does one mean by a long lease—99 or 21 years?

Mr. Bowles

Long enough to take an interest in them anyhow.

Sir G. Gibson

There is the possibility, but I cannot myself imagine any industrialist renting a building, who would be prepared to make the same financial outlay in respect of such building as he would if it were his own building. Therefore, I notice that land, buildings and factories and machine tools are not dealt with in the White Paper. I was very glad the President of the Board of Trade raised the matter.

The Committee have to consider mainly consumption goods, that is, raw materials and manufactured goods. The kingpin of the whole scheme is the disposal of these various goods which will be within the control of the Government without dislocation of industry and a consequent loss of employment to wage-earners of the country. One of the first things set out in the White Paper—and it is very important—is that goods should be sold at economic prices. I remember that at the end of the last war there was a man in the West Riding of Yorkshire—he was known to me personally—who wanted to buy a Lancashire boiler for his works. A shell-filling factory was being dismantled and he bought a boiler and gave £800 for it. A little later apparently the Government had to vacate the land on which the shell-filling factory stood and it had to be pulled down, and another man bought the sister-boiler and all fittings for £80. One might say that that was a very good purchase on the part of the second man, but we have to take the long view, and realise that the selling at an uneconomic price in that way would be harmful to the boiler industry.

Therefore, it is very important that the Government should not "slaughter" these goods but should obtain reasonable, fair and economic prices for them where possible. Selling at too low prices break markets and eventually is contributory towards causing depression in industry. An economic level of prices should be aimed at. I agree with the President of the Board of Trade there must be no speculative profit by intermediaries. I am speaking as an industrialist. It would not be for the national good that we should have a repetition of what took place after the last war. I was one who went through the period of boom, but I also realise what, unfortunately, followed—a terrible slump. No industrialist wants that kind of thing to interfere with trade. I can see by the White Paper that it is the intention of the Government to try and dispose of the goods so that it will not disturb the normal run of trade and industry throughout the country. As the Minister said, there must be the maintenance of the stability of the price structure. Raw materials such as wool, cotton, and hides should still continue to be sold for a considerable time through the Government controls.

I once more wish to pay tribute to the Controls, who have done a magnificent job of work during the war in keeping prices steady. It has been to the advantage of the industrialists and of the employees. There was no control such as we are likely to have after this war on primary commodities operating after the last war. One of my competitors in a different section of the industry from that with which I was connected, on that occasion told me that he was purchasing goatskins from India at 190/- a dozen, and at the moment when he had these goods coming into the country from India he was buying them here at 38/- each. We have to bear in mind the effect upon employment in the country of such a state of affairs. Enormous increases of prices of different commodities have been prevented by our Controls during the war, and I wish to pay them the highest compliment I can for the admirable work they have done. Paragraph 17 of the White Paper states that Departments have been designated as disposal departments, such as the Ministry of Supply. The London Chamber of Commerce some time ago issued a little brochure on the disposal of Government stocks, and in it they suggested that the Government disposal department should form disposal companies, in respect of each class of commodity, composed of one producer representing manufacturing interests, one person representing wholesale distributors, one person representing export merchants, a Government nominee, and a representative of the trades unions, and that each small company, comprised of these fixed men, should be responsible for the disposal of the goods in its own particular industry. I do not know how such a suggestion would appeal to the President of the Board of Trade, but I notice on page 5 (17b) of the White Paper the statement: One Department will be primarily responsible for deciding the method of disposal, for fixing margins and prices, for settling the rate at which goods will be released, and for conducting the necessary discussions with trade and industry. In his reply I would like the Parliamentary Secretary to make more clear exactly what is meant by these negotiations and discussions with trade and industry, because the next paragraph states: Traders or manufacturers who wish to know which Department they should approach regarding the disposal of particular surplus stores should get into touch with the Board of Trade. It is not particularly clear in the White Paper as to how there will be a real liaison arranged as between the Government Department disposing of certain articles and the trade and industry which is interested in those particular articles.

Paragraphs 10 and 11 are the crux of the whole of the White Paper. Personally, I approve of them because I feel that they represent very sound policy indeed. But the important thing to remember is to sell at fair prices without breaking the market, and only to allow agreed maximum profits to buyers. That may seem strange as coming from an industrialist, who during the war has been protesting all the time about an E.P.T. within an E.P.T. by certain Departments, limiting one's profits to four per cent. on turnover or 7½ per cent. on capital. In the disposal of these goods, I hope there will not be a repetition of what occurred in the last war, of men making inordinate profits. This was illustrated when the President of the Board of Trade referred to tyres being sold for a few shillings each, and later on re-sold at £5 or £6 each. That kind of thing should be prevented in future. Goods should be released slowly. Enormous volumes of goods were released in 1920 at high prices and resulted in hundreds of people going bankrupt in 1921 when depression came.

In the last war prices rose enormously, and when the slump came firms went down like ninepins. I remember one manufacturer in the West Riding of Yorkshire who had £1,000,000 offered for his business, which had a capital of £100,000. The slump came in 1920, and in that year he lost £400,000, and the year following £200,000, and he was struggling to keep his head above water until the day he died. That was not good for him financially, and not good for the people working. for him.

This is the important point I want to stress in this Committee. Let the Government keep prices steady and there can be no great drop in prices. I have indicated, in my own industry, how the prices have been kept steady throughout the war. The prices of primary commodities to-day are very little higher than they were in pre-war days, with the re- sult that, whatever may happen in future, they cannot fall very much and cause distress to either employers or employed. The Government should organise commodity disposal companies for industries and groups of industries immediately. They ought not to wait but tackle the job at once. In respect of heavy electrical goods and light electrical goods, there should be disposal boards or companies or some body of people who would be responsible for placing these goods on the market, and these companies or committees should be set up at the earliest possible moment.

I agree with the right hon. Gentleman that millions of pounds of goods could be used in the Colonies and devastated countries. I endorse entirely his attitude of mind on this question, that we should do all we can to assist our Colonies in particular in the post-war period in order to put them on their feet at the earliest possible moment. There is no statement in the White Paper on how goods are to be disposed of which are abroad, and are the property of His Majesty's Government. I would like the right hon. Gentlemen to inform the Committee of the functions of the Government in this connection. Will the Government arrange with business houses which are abroad to undertake the task of distributing these goods in various parts of the world, or will an organisation such as U.K.C.C. have the opportunity or the task of distributing these goods?

Mr. Bowles

How will the Soviet Union do it?

Sir G. Gibson

They should be disposed of for the good of the people, wherever they are disposed of. If sales are made in our own Colonies, His Majesty's Government would, I expect—I hope they would—stipulate conditions of sale which would prevent large profits being realised above British Government prices. Sale by negotiation or tender might be satisfactory, subject to a limitation of profits on purchases. But I do not want to see a repetition of what took place after the last war. I have in mind a certain man. I did not blame him; it so happened that he took advantage of the situation. He was a very able and brainy man, and to-day he is a millionaire due entirely to the disposal of Government stock after the last war. I do not want to see that happen in this case, because I realise that the pushing up of prices may have the result of shutting a large number of people eventually out of employment.

Mr. A. Edwards (Middlesbrough, East)

Has that only been latterly discovered?

Sir G. Gibson

No, it was not at all latterly discovered. Since 1918 we have not had a job of this description brought before this House. I agree with the President of the Board of Trade that we must deal with the matter in the light of experience of what followed after the last war and try to correct those matters which were harmful and inimical to the public interest and dispose of these goods for the benefit of the people in the country. I have not the slightest doubt that industrialists all over the country will be only too glad to co-operate in forming, for their own protection in respect of their normal production prices, non-profit making organisations to assist in selling Government stock. Paragraph 15 refers to the reconditioning of some goods, and my hon. Friend the Member for the Abbey Division (Sir H. Webbe) did not appear to me to be in favour of this policy being carried out, but personally I think it would be a wise policy.

In conclusion, I will give the Committee an example of what I mean. Two or three years ago I asked several questions in this House about certain people buying Army boots that were being rejected by the Services. At the time the Government had nearly 1,000,000 pairs on their hands and could not dispose of them. I was asked to investigate the question and eventually the Ministry of Supply tackled the matter very energetically, and to-day they are reconditioning over 85 per cent. as against 7 per cent. to 10 per cent. previously of all the boots rejected by the Services and they are doing a magnificent piece of work.

There is no reason why they should not continue to be reconditioned by boot manufacturers throughout the country, so long as supplies are available, because it is work for the boot manufacturers, and boots which are not suitable for re-issue to the Forces can be made available to the civilian population, such as farmers, mine-workers, etc., because they are really excellent wearing boots when reconditioned. Therefore, I commend paragraph 15 of the White Paper, and I consider it very desirable that this reconditioning should be carried on in the public interest. I feel that the Government are tackling this problem of disposal in a businesslike manner, and I have not the slightest hesitation in saying that in this work the Board of Trade and the Government will have the wholehearted co-operation of the industrialists of this country.

Mr. Bowles (Nuneaton)

The speech of the hon. Member for Pudsey and Otley (Sir G. Gibson) discloses the real difference of opinion between Members of the Labour Party and Members who are supporters of the Conservative Party. He seemed quite surprised to find that an abundance of wealth is embarrassing not only to private industry but also to the people who are employed in it. We have known that for a long time. In the first place I would like to pay this compliment to the President of the Board of Trade. I think every hon. Member will agree that he has been a first-class President so far as the organisation of war and coupons and general rationing of commodities are concerned. I am sorry he is not here, because I should like to ask him what he thinks his authority is, or what mandate he conceives he has, to come before the Committee and present this White Paper on the disposal of surplus Government stocks after the war. Members of the Labour Party were authorised to enter the Government with the Conservatives and Liberals purely and simply for the prosecution of the war. Now we find, week after week, that they have associated themselves with one White Paper or another which is going to land them and their supporters and followers in very great difficulties, not only immediately but in the more distant future.

We had a Debate about three weeks ago on the Government's employment policy. So clear was the difference of opinion between hon. Members on that side and hon. Members on this side, particularly at the end, that the House was only prepared to support the first sentence of the foreword to that White Paper. I think it was the hon. and gallant Gentleman the Member for Preston (Captain Cobb) who interrupted my right hon. Friend the Minister of Production, when he was coming to the end of his speech, because the Minister of Production said that should the House clearly indicate that it gave its support to the White Paper, the Government would proceed to prepare plans of an administrative and legislative character. Not only on that side, but also on this side, I well remember hon. Members saying, "No, if we pass this first sentence of the foreword, the Government must not accept that as a mandate to go ahead with any further steps." I should like to say this, and I think I am entitled to say it on behalf of my friends, that if we allow the Government to have the Supply Vote today, we are not by any means committed to any contents of this White Paper. I deny the mandate of any Member of the Government, particularly the President of the Board of Trade, to commit his party to their policy so far as the post-war distribution of war stocks is concerned.

The President paid a very great compliment to his right hon. and gallant Friend the Parliamentary Secretary for the hand he had in the preparation of this White Paper. He has obviously had a very great hand in it, and I compliment him on the unusual situation where a Parliamentary Secretary seems to be able to overlay the Minister himself. That makes it all the more serious from the point of view of this discussion. Why are Ministers in the Government, particularly Labour Ministers, allowing themselves to be put in this position where the natural threat of the Conservative make-up of the Coalition Government enables them to bring pressure to bear which is so obvious in each of these documents? We have had the Employment Policy Paper, and last week we were discussing the Town and Country Planning Bill, where everything the Labour Party stood for has gone by the board.

At the end of the war the Government will find themselves in possession of something like £2,000,000,000 worth of surplus goods. Some of them may not be immediately useful for civilian consumption, some of them may. I interrupted the President when he said he was going to dispose of those through the normal channels of distribution, but that he was going to control the amount of profit made. Why should any profit be made by any person at all in the distribution of public property to the public? That is the real issue. If the policy of the Government is to say, "Here we have 1,000,000 blankets we no longer need; we will hand them over to Selfridge's and other big firms or people concerned in the retail trade of blankets and allow them to make 5 or 7 or 10 per cent. profit in distributing them," that goes against the fundamental principle of those of us on this side of the Committee, because the making of profit is visualised. We believe in each according to his need. I am perfectly certain that when this war is over there will be a great need, particularly on the part of the poor people, for blankets I see no reason on earth why the men and women who have contributed so much during this war, who have financed the purchase of these blankets by the Ministry of Supply, or whichever Ministry it is, should have to go without. It is quite obvious that the gentlemen engaged in the blanket retail trade are only going to sell to people who have the money in their pockets to give a profit to the retail distributors.

I see no reason why the poorest people in this country—and because they are poor, their needs are the greatest—should come second in this distribution of surplus Government wealth, when it is quite obvious that if the scheme visualised in the White Paper is carried out, the surplus goods will go into the possession of those who can not only pay for them, but pay a profit on top of the price at which the Government are prepared to let them go. I say quite seriously, and I am sure I can speak for every Member of my party, that we accept nothing of the principle outlined in the White Paper so far as the disposal of Government surplus stocks is concerned.

There are many things, furniture, for instance. It might easily be argued that the easiest way of distributing these things is through the normal trade channels, but it is not unknown to hon. Members who sit for London that the London County Council not only built a large number of flats but also furnished them with L.C.C. furniture. If the present Government dissolve we shall have, I hope, a decent housing policy after the war. [An HON. MEMBER: "They may not dissolve."] I think they are going to dissolve. So far as the present Government are concerned, however, so far even as the present Minister of Health is concerned, we shall have 300,000 houses in the first two years after the war——

The Deputy-Chairman (Mr. Charles Williams)

This speech has gone rather wide, but I think that the building of houses is a little too wide.

Mr. Bowles

With great respect, Mr. Williams, if you will be good enough to look at the White Paper you will see that furniture and fittings are mentioned and were also mentioned by the right hon. Gentleman.

The Deputy-Chairman

The hon. Member may mention fittings but cannot go into the building policy. I think I am definitely correct, in spite of what the hon. Gentleman says.

Mr. Bowles

I am not doing that at all, Mr. Williams. What I am saying is that a certain number of houses will be built which will need fittings and fixtures. My hon. Friend below me pointed to the various fittings in the ceiling here which will be found in other houses after the war. I say it would be very much better, as has been done by the London County Council, to supply and furnish according to the desires of the tenants the flats they are going to take. I beg of the Government to bear this in mind, that here, in what we have always called the common pool, there is a great mass of useful wealth for the people of this country. The great fear of big industry, represented by my hon. Friend the Member for the Abbey Division of Westminster (Sir H. Webbe) and by my hon. Friend the Member for Pudsey and Otley, is being embarrassed by the release of this tremendous stock of goods. Their position is quite intelligible to me.

Sir G. Gibson

Does the hon. Member deny that the manner in which stocks were disposed of after the last war contributed enormously to the large amount of unemployment in this country from 1921 to 1925, the period of the slump?

Mr. Bowles

I do not deny it at all. It was one of the causes.

Sir G. Gibson

We do not want it to happen again.

Mr. Bowles

I am sure they do not want it to happen again, neither do we, but I do say that the way stocks were disposed of last time is not very far removed from the way they will be disposed of this time if the policy in the White Paper is carried out. The Government have visualised in various White Papers which they have issued a shortage for some five or seven years after the war of consumer goods, such as furniture, which the Government are likely to have in their possession when the war comes to an end. I would beg the Government to realise that here we have an opportunity of doing something which will not interfere—although I am very anxious to do so—with private manufacturing and private distribution. It can well go side by side with them, provided it is properly done. Having regard to the views of a large number of Ministers, not only in their speeches but in White Papers, there will be such a shortage. Quite frankly there has always been a shortage of nearly everything so far as the great mass of the people are concerned. I do not know anyone who has gone into a very poor house who does not know perfectly well that the people there are short of almost everything that makes life worth living. I say, therefore, that with this stock which the Government are likely to have at the end of the war, a very good job of work can be done by proper and adequate distribution amongst the people of this country.

Then the Minister said something about Government property abroad, that so far as the property is in the hands of foreign, Colonial and Dominion Governments, they would, no doubt, enter into agreements rather along the lines of the Government in this country. Of course they are likely to do that because, on the whole, they are Governments of the same complexion. They believe in private enterprise and do not believe in communal ownership and distribution. But there is likely also to be a certain amount of surplus wealth in the Soviet Union, and I should be interested to know from the Parliamentary Secretary whether any idea has been conceived as to organising distribution by the Soviet Union Government of surplus British stocks there when the war comes to an end. There is no doubt in my right hon. Friend's mind as to how he would like the South African Government to dispose of surplus British stocks there, and that is through the normal retail trade distribution.

The Minister said that when disposing of factories he would have regard to effective distribution for the general balance in industry throughout the country, that he would also have regard to the employment needs of the people, that he would also have regard to the export trade which the country would need to have after the war and, finally, he would have regard to the efficiency of the traders who were likely to take over the factories, which he said he was also proposing to dispose of in the same way, although they are only referred to in the Paper as being subject to a further statement.

I think a further statement has been made to-day by the President. He was quite specific. He is going to sell factories, not by auction, or lease them for a short time or long time, and is going to have regard to the different needs of the communities in the country, to their employment needs, to the export trade and to the efficiency of the people who are purchasers or lessees. That is all very well, but I do not see why the President should pursue the policy of allowing these things to go out of Government control. The President is allowing himself to be pushed into a position of getting rid of Government control and ownership and handing control back to private manufacturers and traders. Such manufacturers and traders had a good chance of showing their efficiency and of having factories in distressed areas before the war. They had regard to the needs of the export trade. Everything that the President regarded as being factors of importance to take into consideration in the disposal of these factories has already been tested. I suggest that my right hon. Friend, as a member of the Socialist Party, should steel his face against the distribution or leasing of public property to private traders.

Dr. R. Thomas

The right hon. Gentleman made it quite clear that the trade unions agree to that policy, and also to the profit margin.

Mr. Bowles

I did not hear him say that the trade unions agreed.

Dr. Thomas

He did. The right hon. Gentleman was probably in a dilemma in regard to the demands of his party on the one hand and the needs of his country on the other.

Mr. Bowles

Well, I will accept it, but I did not hear him say anything about consultation with the trade unions, and I was here all the time. I hope the Parliamentary Secretary will say whether the right hon. Gentleman the President has had negotiations with the leaders of the trade union movement and that they have agreed to the disposal of Government stock and the making of profit out of it, because it is most important. It is true that we are not committing ourselves for one minute to the contents of this White Paper, but I do say that neither Labour Ministers nor trade union leaders have the right to commit members of this party to the contents of either the President's speech or of the White Paper.

The President said that it might be necessary for the release to spread over a term of years. How long do he and the Government visualise the continuance of the policy outlined in the White Paper? If the Conservative Party win the next election it will go by the board, if the Labour Party win it will also go by the board, and it will only be of some value if the Coalition continues in being. Therefore, how is it possible for the President to say that the policy will be spread over a number of years? I feel that the inherent difficulties facing a Coalition Government formed for the purpose of fighting a war will become more and more transparent to hon. Members on both sides of the House. Why do we go on with the farce of pretending that two parties so fundamentally disliking one another's principles, who hardly see eye to eye about anything—we are not fighting the same war so far as I can see—are in harmony? What I am concerned about is trying to blast this nonsense sky high.

The Deputy-Chairman

Whether it is nonsense or not it is not for me to say, but at any rate it does not come under this Vote.

Mr. Bowles

With all respect, Mr. Williams, here we have a hybrid scheme, made up of Tory and Labour policy, in connection with the disposal of surplus Government stocks after the war. Surely I am entitled to analyse the White Paper, which has been the burden of the President's song for about forty minutes, and to say that it is an impossible attempt to solve the problem. Hon. Members opposite, like those on this side, have clear views as to where they stand, and with great respect I think it is hopeless and nonsense for Ministers and for us, who so fundamentally disagree, to bring out week after week and month after month things which bind none of us but bind only a Coalition Government, which may not be in being after the war.

Mr. Higgs (Birmingham, West)

I obviously disagree with very many points which have been raised by the hon. Member for Nuneaton (Mr. Bowles). He objects to his party being consulted now about the disposal of Government surplus stocks after the war. Are we going to let the matter remain until the war is over and get into a chaotic state before we give it serious consideration? I admit that the White Paper is somewhat sketchy and incomplete, but I suggest that now is the time to consider the problem, and I will give some concrete facts of what is happening before I sit down.

Mr. Bowles

The President said that he thought a good many of these things would be carried out by another Parliament. If the hon. Member was a Member of that new Parliament, would he carry out the terms of this White Paper?

Mr. Higgs

I have a higher opinion of the President than the hon. Member has.

Mr. Bowles

Would the Conservative Party carry out this White Paper? Would the hon. Member carry it out?

Mr. Higgs

I will say whether I would or not if the hon. Member will give me a chance. The Debate so far seems to have centred round public and private enterprise and private profit, rather than round the problems outlined in the White Paper. There is a dividing line between public and private enterprise. Where a wayleave is necessary it should be public enterprise, otherwise it should be private enterprise. The hon. Member for Nuneaton seems to think it is a disgrace to make a profit. Does he realise that there is such a thing as competition, which is a far greater deterrent to making a profit than Government control? We cannot sell goods at what prices we like. It depends upon what a competitor fixes his price at. To-day people have to be very efficient and smart to make a profit, and will have to be more so after the war. I am disappointed that the White Paper did not deal with buildings, to which the President referred, and with another problem of considerable importance, the disposal of machine tools, which has not been mentioned. Obviously, the trade associations will press for as high prices as they can get, but I am not altogether in favour of that. If stocks are kept for a considerable time they become obsolete. The Committee is well aware that motor-cars produced here before the war will be completely out of date after the war, in relation to those being produced in America. If we are to retain the articles referred to in the White Paper for an indefinite period they will have no disposal value. Therefore, we must keep the balance between the depreciation of prices and getting something for the State in order to ease our financial problems. Some items for disposal, such as raw materials, will keep for an indefinite period, and that will create one of our great difficulties after the war. This country has no nonferrous metals, leather or timber. They have to be imported and, therefore, all the salvage we can get out of the surplus stocks will be of considerable value. We have to get these materials in order to export, and if we cannot import them they will be of considerable value.

I suggest that there should be a central control for distribution, with delegation to the regions. I think it would be a great mistake if everything had to be referred to the central control. The regional officers, who have had so much experience during the war, know practically every firm individually, and the question of how material should be disposed of should, to a great extent, be delegated to them. If protection lapses control will become impossible. Contracts are being cancelled and machine tools are being released from production. In the Midlands there are many machine tools, owned by the Government, who are hardly aware they exist. It should be the duty of the regional controllers to tabulate these machines forthwith. I know of cases where copper is being disposed of at £12 below the market price. It is to the advantage of the people who are storing it to get rid of it, because no manufacturer has unlimited room for stock. It is the duty of the Government to see that it is not disposed of, and especially to see that machine tools are not sold in this way. A ring fence should be put round them as soon as contracts are cancelled.

There is another question that will arise. The present staffs in the regional departments will want to get back to their own jobs, and new personnel will be engaged when peace comes. Now is the time to get this control in working order. There is at the present time a racket with regard to spare parts for cars. It is the easiest thing in the world to get a spring or any other component from a car and pay a reasonable price for it, with a result that the car, in a few months' time, will be looked upon as derelict and will be sold for a break-up price, whereas if there was better control of this surplus stock it would be to the benefit of the nation as a whole. The President of the Board of Trade referred to factories and said that lease was going to be the normal procedure and not sale. Probably that would be a satisfactory state of affairs for smaller factories, but for medium and large size factories, buildings which are to accommodate anything from 500 men upwards, leasing will be most unsatisfactory. In the running of medium and large size businesses alterations are constantly necessary, and to get permission every time for modifications and alterations in order to accommodate additional plant is a practical impossibility. Probably the Minister had something in his mind in that direction.

The hon. Member for Stoke (Mr. Ellis Smith) suggested that the Ministry of Production or some other Ministry should control industry after the war. We do not want any more of this control than is necessary for the safety of the nation. Control must cease when the supply of goods exceeds the demand. Competition will then keep the price in its right place. Controls have been unavoidable and desirable during the war, and we are all pleased to submit to them, but as soon as the war is over and the supply of goods exceeds the demand, then will be the time to do away with controls. I am disappointed that the White Paper does not give more details about a great variety of articles between typewriters and trucks, raincoats and rollers. They happen to begin with the same letter, but such paragraphs mean nothing. It is unfortunate that we do not know more about the tabulation referred to in paragraph 9. Paragraph 10 (c) refers to "fair and reasonable price." It is going to be very difficult to find out what a fair and reasonable price is. That is one of the great problems that a manufacturer has to decide when he puts his goods on to the market, and I do not think the Government will give as much attention to it as the industrialist has to. For instance, is a fair and reasonable price that at which a fully efficient firm can compete or is it when the least efficient firm is deprived of a profit? There is a very big margin between the two. I notice: private corporations and associations membership of which will be open to traders handling the goods in question. I should like to know what that means exactly and if it only includes trade associations and is confined to members of trade associations, or whether other people outside trade associations will be consulted. Arrangements will be made where surplus articles have to be reconditioned. Will those articles be reconditioned by the Government or by private enterprise? There are a lot of uncompleted stores for Russia. If they are not taken by the time peace is declared, who will be responsible for them?

Mr. W. J. Brown (Rugby)

I do not see that the White Paper and the speech of the President of the Board of Trade should cause any general disappointment, except possibly where I sit. Hon. Members opposite can hardly have expected the President of the Board of Trade to tolerate the anarchy that prevailed at the end of the last war, profitable as that anarchy was to those who dealt in surplus stock, so that they cannot be disappointed either with the White Paper or with the right hon. Gentleman's speech. Hon. Members on this side can hardly have expected the right hon. Gentleman or the Government to say that the fact that we are in possession of great factories, great establishments, large quantities of surplus stocks, and so on, gives us an opportunity of taking a substantial stride forward in catering for the needs of our people. They can hardly have expected that the President of the Board of Trade, in a Coalition Government, should have come forward with a proposal that we should treat the supply of boots, clothing, food and shelter for the civil population in time of peace with the same intensity of organisation as we have had with the manufacture of armaments during the war, or that they should propose to use the resources in the hands of the State to that end. For the Labour Party to expect that would have been to carry political innocence to the point of folly. They ought not to be upset because the White Paper disappoints the hopes of the future as well as falsifying anticipations based on experience of the past.

This is the only kind of document that could conceivably have come out of this Administration. It has about it all the marks of inevitability. The hon. Member who spoke last complained that the President of the Board of Trade has been over-laid by the Parliamentary Secretary. I agree that that was a deplorable thing to happen, but he was asking for something more. He was asking that the Labour Party should go to bed with the Tory Party in a Coalition Government, but yet produce no permanent consequences. To me that is a ridiculous expectation. You may say that the consequences would be of a bastard character, but that is another matter. To ask that there shall be no consequences is unreasonable. When I contrast my hon. Friend's complaint with the repeated demands we have had for a declaration of Government policy on all kinds of postwar problems, I feel that my colleague, for whom I have a great affection, was being a little less than normally reasonable. This is a compromise document bearing all the marks of the Coalition. It is on the lines of every other document that we have had from them. That is all that can be got out of the political situation, until some party arises strong enough to break that situation, or until social forces make the present line-up in politics impossible.

I want to draw attention to one provision of the White Paper and to deal with its application to a particular case which, in my view, calls for exceptional treatment, and on which I want to invoke the sympathy of the Committee. Paragraph 10 (c) reads: To ensure, if necessary by statutory price control, that the prices charged to the ultimate consumer are fair and reasonable in relation to the current prices of similar articles. With that, as a general declaration of intention, I have no particular quarrel, granted the social set-up in which we live. But there is one category of purchasers at the end of the war to whom that phrase will represent the grossest injustice. During the war the Government have taken over a pretty considerable section of the holiday trade. It has commandeered the premises and furniture of thousands of hotels, boarding houses, holiday camps and so on.

I make no objection that that should happen. It was inevitable that, where they could be conscripted into the war effort, they should be so conscripted. But let me tell the Committee how they were treated in respect of the prices paid for their stuff, which they will want to get back at the end of the war. They must get it back to be able to start business again. Therefore there will be purchasers. As far as land and buildings are concerned, the Government paid a rent under the Defence Compensation Act, 1939. As far as perishable goods were concerned—sheets, blankets, pillow cases and things of that sort—the Government bought at the beginning of the war period, and the owners of the goods ceased to have an interest in them. But there was another category which I should describe as "less perishable goods," far which the Government for a period paid rent, and then bought out at a later stage. So we have had two types of purchase—the purchase of perishable goods at the beginning of the war, and the purchase of less perishable goods at a later date, purchases which are still going on. Under the Defence Compensation Act, 1939, an Act which I cannot but feel passed through the House with insufficient attention paid to it in detail, at whatever period of the war the Government bought commodities they were limited to paying for them at the prices ruling in 1939. In other words, although the cost of furniture might have doubled, trebled or quadrupled between 1939 and 1944, the Government pay for it in terms of 1939 values.

Let me illustrate what happens, and confess my interest in the matter, as I ought to. I am the President of the Holiday Camp Proprietors Federation, and I am a shareholder in a couple of holiday camps which the Government have taken over. I make that public, as I have a direct interest in the matter. The Government have recently decided to buy the furniture of one of my holiday camps. It cost us £10,000 before the war. The Government propose to pay £5,000 for it. If I want to buy that stuff in the open market a year hence to get the camp going, I shall have to pay, not the £5,000 which the Government now give me, and not the £10,000 which it cost me, before the war, but probably three or four times that figure, because furniture has risen by three or four times.

I am not going to argue at this stage the injustices of the 1939 Act. There are many graver injustices in the world, and I do not want to go back to that. But I do say that, if under an Act of Parliament the Government claim the right to take from thousands of hotel, boarding house and holiday camp proprietors, at 1939 prices, the materials for earning their living, they ought to be allowed access to surplus Government stocks at the same sort of figure when the war ends. I submit that that is a fair claim to make on behalf of those people whose furniture and stuff have been commandeered by the Government.

Mr. Gallacher

Everybody will be on the grab.

Mr. Brown

I am not asking for anything more than the restoration of the stuff that was taken. That, especially coming from me, is the height of modesty! It is to ask that there should be in a holiday camp or a hotel at the end of the war the furniture that was there at the beginning. I would remind the Committee that the Government were under no obligation to commandeer the stuff. They could have rented it. They chose, however, to exercise their powers under the 1939 Act in a way which, unless we safeguard the position of these people, will do a great injustice to them. They are a section which the Government are anxious to put back into business at the end of the war. I will not venture to prophesy, but I am inclined to think that when the war ends we shall see a spontaneous down-tools movement, as we saw at the end of the last war. People are tired and want a holiday, and the movement to take a holiday at the end of the war will be nation-wide. The facilities for taking it, however, will not be available unless the seaside boarding houses, hotels and holiday camps are able to start business again, and the desire of the Government that they should start business at the earliest moment will be frustrated. It will be impossible for many of them ever to reopen at all.

Mr. Gallacher

Will the hon. Gentleman give a guarantee on behalf of the holiday camps that, if they get the furniture from the Government at a cheap rate, they will not charge the high rates that others are likely to charge?

Mr. Brown

I have resisted for years any attempt on the part of the Labour Party to extract pledges from me, and I cannot at this late hour accede to any request for pledges from the Communist Party. I am not asking for the furniture at a cheap rate. I am asking that it should be restored at the same rate as that at which it was taken from us. I cannot imagine any fairer claim than that. I do not say that the Government are against this. I believe that some Departments know the existence of this problem and are giving it attention, but I have referred to it to-day because there is a terrific contrast in the treatment of this section and the treatment of other sections. When we took over the railways we guaranteed them the whole of their pre-war revenue with a bit on top. When we took over shipping we took over at statutory chartering rates plus the cost of insurance. When we took over Short Bros. we paid 23s. each for their 5s. shares. That was the reward of inefficiency! When the Government deal with the poor little seaside boarding house proprietor, or the not-so-poor holiday camp proprietor, they are given terms which bear no relation to the compensation terms given to the more powerful interests. Unless we enable them to get their furniture back at something like the price at which the Government took it from them their industry will not get going again. It will drive many people out of business if they have to buy their furniture at the inflated prices that will rule at the end of the war. Therefore, I bespeak the interest of the Government, and the support of the Committee, for the badly treated section of the community whose case I am trying to put.

Mr. Hammersley (Willesden, East)

I am sure that the observations which the hon. Member for Rugby (Mr. W. J. Brown) has just made in connection with the hotel trade have evoked a certain feeling of sympathy in all sections of the Committee. It is true that their furniture has been commandeered at 1939 prices, as, indeed, is the basis on which all materials and works taken by the Government have been compensated for. There is clearly a hardship. I should like my hon. Friend to agree that to the extent that there is a hardship to the hotel industry, there is a similar hardship to all industries where compensation has been paid at 1939 prices.

I would like to say a word of welcome to this White Paper and to ask a few questions. Before I do so I would like to examine one or two observations made by hon. Members, particularly the hon. Member for Stoke (Mr. Ellis Smith), and certain arguments he put forward. The hon. Member pointed out that some £2,000,000,000 of money had been invested in State enterprise, which he mentioned as the value of State-owned assets. He compared this figure with the figure of £350,000,000 of private investment, and from that comparison he indicated that, if the State had made an invesment of that kind—large in comparison with private investment—State investment ought to be proceeded with and there ought to be a furtherance of State enterprise. I consider that these two figures he gave are not comparable. I am, however, prepared to accept them for the sake of his argument.

Sir Frank Sanderson (Ealing)

The hon. Member did not say it was investment in enterprise, but investment in raw materials and manufactured commodities.

Mr. Hammersley

I am aware of what he said, and I am not dealing with its accuracy. I am dealing with the accuracy of his argument, and the conclusion he deduced from the figures. He indicated by an examination of the figures that the State had a much greater interest in production than private enterprise. Of course, that is not true. The whole of our production for war purposes is something like 60 per cent. of total production. I do not know what proportion of that war production is produced from State enterprise, but it is certainly much less than 50 per cent. If we assume—and I do not agree that it is so—that one half of this 60 per cent. of total production is produced because of State enterprise, it would appear that the £2,000,000,000 public investment in relation to the £350,000,000 private investment has produced much less, although it is a much greater sum. In fact, it would indicate an inefficiency of 1-in-27; that is based on the 50 per cent. and the fact that six times as much public money is engaged. If we accept the hon. Member's figures as comparable it would indicate an inefficiency of public enterprise of 1-in-27, and that is an indication which I would not accept. The comparison of these two figures is erroneous and misleading, as that conclusion would show. The figures are not comparable, for the one deals with money invested and the other deals with the value of made goods.

The hon. Member for Nuneaton (Mr. Bowles) said he did not believe in making profits. On the question of disposal, however, surely the matter which the Committee have to look at is the welfare of the community as a whole and the efficiency of the means of distribution. If it can be proved that by maintaining the State as a means of distribution, expenses are piled up, the community will have to pay a higher price for the goods than otherwise. I think that the Government are wise in deciding that in distributing surplus goods they will use the most efficient forms of distribution. This matter is one of great importance. It was important in the last war, and it will be much more important in this. Sixty per cent. of our production has been going to war purposes for five years. That is a formidable figure. There will be a massive accumulation of spare parts and a great deal of obsolete equipment and plant, and on top of that there will be the current stores. I am not satisfied that the use of what is described as the ordinary trade channels to deal with obsolete equipment and plant will be quite satisfactory. There will be no civilian market for a lot of materials like tanks and things of that kind, and something will have to be done in advance to decide what is to be done with the scrapping of these obsolete vehicles through an organisation which cannot be considered normal. I imagine that the sooner the scrapping programme is started the better.

The Government have rightly decided not to make the mistakes we made in the last war, not to sell the surplus stores to the highest bidder, and not to dispose of them to those who are interested only in buying cheaply and selling dearly. I have no doubt that, as a result of the Government's examination of the position, there will not be the profiteering after this war in surplus stores that there was after the last war. It will be a great pity if surplus goods are hanging over the market. I agree with the speech of my right hon. Friend the President of the Board of Trade, in which he said that we are not only going to provide for orderly disposal, but that we are going to bear in mind the effect on current production of similar goods so that the existence of surplus stocks will not be allowed to prevent employment in the various industries producing such goods being resumed at the earliest opportunity.

I welcome the statement of principles laid down in paragraph 10. They are, I think, principles to which we cannot take the slightest exception, but it should be borne in mind that surplus goods must be got into the hands of those who urgently require them as quickly as possible. In that connection, I wonder whether arranging the disposal of them through these various trade associations will not run us into the risk or the danger of those trade associations conniving at some kind of scarcity market. I am sure the Government have that danger in mind—in fact the President of the Board of Trade mentioned it. In the President's statement of 2nd November, I felt that in deciding to use these trade channels of distribution after the war there was possibly a danger of falling into too narrow a channel of distribution. I think the right hon. Gentleman used the phrase "normal channels of distribution." What I would really like to know is, what that term "normal" means. We do not want to get distribution into a closed corporation of the respective trade. We do not want to carry, too far, this slogan of keeping out the interlopers. I rather feel, from what I know of the matter, that the Government will be inclined to define the "normal channels of distribution" as those engaged in the trade prior to 1939. That is not going to be quite satisfactory.

I think it should be appreciated that since 1939 many people have been engaged in various industries who were not in those industries before 1939, and I should think that those genuinely employed in such industries should be entitled to come into the various trade associations which may be set up as the channels of distribution. I think there is already mooted a Textile Disposal Corporation who are setting up their constitution rather narrowly. I think it would be a pity if it were drawn too narrowly. I do not think we want to prevent new blood getting into industries, even if only distributive industries. Some hon. Members spoke about the desirability of putting a ringed fence round the machine-tool industry as soon as the war was over. I think that is very undesirable. I feel that at the present moment the Government could be doing much to deal with machine tools. There are many machine tools in the possession of the Government which are comparatively old and which, I understand, are being scrapped. I think it would be a better policy if, instead of scrapping these machine tools, the Government circulated the whole trade saying these machine tools were for disposal so that very much older machine tools in the possession of private ownership throughout industry could be scrapped first, and the industry given the opportunity of obtaining those proposed to be scrapped by the Government. I hope that the Parliamentary Secretary will be able to say a word on that.

Then mention was made about stocks in foreign countries. Undoubtedly there will be very large stocks in foreign countries when the war is over, and I hope we shall be able to make some arrangement at a very early stage in respect to such surplus stores. I know that the President of the Board of Trade has spoken about the arrangements now being made in the Commonwealth, with the Dominions and the Allies, but I am referring rather to stores in foreign countries. What springs to one's mind straight away, of course, is France. In the last war I well remember the following incident being brought to my notice. A British company was engaged to purchase and to break down the British ammunition which was left in France and Belgium. They were proposing to sell the scrap to Britain and the United States at, I think, £8 a ton. Very shortly afterwards, the French Government imposed an embargo on the export of scrap. Then the steel users in France made a combine. The result was that the British company could only sell this scrap at the price which the French combine were prepared to pay, which was some 30s. a ton. I hope that an eventuality of this kind will be safeguarded against, and that the Government will see that surplus stores physically situated in foreign countries are subject to some kind of agreement in advance with the Governments of these liberated countries.

The points about factories seem to me not to be covered by the White Paper, but I agree with an hon. Member who suggests that if you are to dispose of large Government factories, it is going to be very difficult for them to pass into the hands of private enterprise on the basis of leasing. Large manufacturers really want to control their own premises. They want to be assured of continuity. They want to feel that they are entitled to make alterations as and when necessary. I do not think the policy of leasing would be quite satisfactory. In any case, I am glad to see that on the question of the disposal of factories, which involves large questions of policy, the Government are not inclined to see social theories brought in by the back door. Generally, I feel that the White Paper is a statement of principles which are acceptable to the country as a whole, and I am glad the Government are paying attention to this problem and laying down principles of commonsense, although one does not know about their practical application.

Mr. Gallacher (Fife, West)

I agree with the hon. Member for Stoke (Mr. Ellis Smith) when he says that this White Paper does not represent any plan at all, and I would say, in opposition to the hon. Member who has just sat down, that it contains no principles. It represents an unholy desire to stake the claims and protect the interests of private enterprise. That, and nothing more.

Sir G. Gibson


Mr. Gallacher

But what continually strikes me here is the smug complacency with which the representatives of the bourgeois robbers continually accept, as taken for granted, that what is in their interest must be right and what is against their interest must be wrong.

Sir I. Albery

On a point of Order. May I ask whether it is in Order for an hon. Member to refer to the constituents of other Members as "bourgeois robbers"?

Mr. Gallacher

If these representatives came here and spoke for their constituencies, I might show appreciation. They never speak for their constituencies; they speak only for their business interests. Nobody can say that the hon. Member who has just sat down was speaking for his constituency.

Mr. Hammersley

On the contrary, I am in the happy position of knowing that the interests of my constituency are best served by the best interests of British industry, and I am glad I have been voicing those sentiments to-day.

Mr. Gallacher

The smug complacency of it. When some of the Members on this side proposed that the mines should be transferred from the mineowners to the State, we were told by no less a person than the Prime Minister that we could not discuss that because it was controversial. The Prime Minister said it, and all the Conservatives agreed that we cannot discuss the transfer of private industry to the State because it is controversial; yet we can discuss the transfer of national property to private enterprise. That is not controversial. Can anyone explain that difference to me? The smug complacency of the Conservatives in this country! Their whole moral concept is based upon the assumption that anything which is in their interests is right while anything which is in the interests of the mass of the people and against their interests is wrong.

One hon. Member spoke about high speed steel being sold for scrap. Why cannot the Government use that scrap? Why cannot they put it into a furnace and bring it out for other uses? Is the hon. Member who last spoke more concerned about certain profit-grabbers getting control of material and getting profit out of it than he is about houses and furniture for the people of his constituency? Are there not masses of material that could be used by the Government to provide houses, furniture, fireplaces, cooking utensils and all the rest of it? Any amount of it. One of the biggest problems that will confront us in securing the health and well-being of the people in planning our towns will be to provide open spaces and playing-fields for the children. I could take the hon. Member to Glasgow and other cities where he would see mile after mile of foetid streets which are bound to be ravaged by disease, and see the helpless and innocent boys and girls playing there in the gutters. Is there not any amount of material to provide amenities for playing fields which would be so valuable in improving the health and physique of our children? Did the hon. Member who just spoke have any of those things in his mind? No, just profits that people are wanting to make, and he wanted to make sure that they got them. He was very concerned about someone who had bought material and did not get a profit, because the French Government——

Mr. Hammersley

The hon. Member has asked me whether I have any concern as to whether our people have playing fields. I have a concern, and I had a concern on the matter before the hon. Member ever entered this House.

Mr. Gallacher

Then why did not the hon. Member mention it, in connection with all this material that is going to be scrapped? Why cannot the Government put it into the furnace and bring it out to make all these conveniences for the playing fields of our children? That is not in his mind. The only thought in his mind is an opportunity for getting profit.

I should like to say a word about the hon. Member for Rugby (Mr. W. J. Brown). He started off in philosophic fashion about where the other side stood and where this side stood, but he "came down to brass tacks" before he finished, and he was more concerned about the Government having paid 1939 prices for furniture in the hotels and boarding houses they had requisitioned and the people concerned having to buy it back at post-war prices. If the people running hotels and holiday camps have to pay higher prices for the furniture, we can take it for granted that they will charge very much higher prices for accommodation. The hon. Member said there would be a terrific rush for holidays; what is going to happen when that rush takes place? If the price of furniture is to be controlled in such a way that these people can get furniture at 1939 prices, then their charges for boarding and camping should also be controlled.

The Government owe something to the lads who are fighting. When the lads come back, they will want homes, furniture, boots and shoes, playing fields for their children and greater amenities and opportunities than they have ever had before. All the wealth of Government materials can be used for those purposes. Moreover, every one of those lads will be entitled to a job. If a man has not the right to a job he has not the right to anything. He will want to make a home and have a decent standard of life. Are we going to guarantee those lads the right to a job? We can only guarantee them the right to a job if we control the means of providing a job. Otherwise, we cannot promise them anything. We can only leave them at the mercy of somebody who is concerned with profits.

The Government have in their possession at the present time the means of providing jobs for many thousands of these lads. Hon. Members are asking the Government to give it away so that the Government cannot provide jobs for anyone, but must leave the lads at the mercy of the monopoly interests of this country. I say to the Government: "It is your duty to the people of this country, and above all to the lads, to hold on to the factories and the assets that you have and to use them in such a way as to provide the maximum opportunity for the lads who have been doing the fighting, and also to the maximum advantage of the people of the country."

Sir George Schuster (Walsall)

I do not propose to answer in detail the hon. Member for West Fife (Mr. Gallacher), but I hope I shall be able to make a few remarks that will convince him that one can look at these matters not with the point of view of a bourgeois robber and yet differ from him in many respects. I want to make only a few short observations. We are in a difficulty in this Debate. The document before us is nebulous. It is a pretty thin one, and it does not deal with the very important matter of the disposal of factories, on which the right hon. Gentleman gave us a statement of policy to-day. We find ourselves confronted therefore with a rather wider issue than is covered in the White Paper. I hope that we shall soon reach the period when we can get away from generalities and get down to a detailed appreciation of what is to be the economic structure of the country after the war. I found the statement made by the right hon. Gentleman completely unexceptionable, and yet I found myself sharing some of the doubts, though not all the detailed sentiments, of the hon. Member for Stoke (Mr. Ellis Smith).

I want to raise really five questions on this matter. They are, 1: Does this proposal "mean business"? 2: Where is the responsibility? 3: Will the national interest dominate on all the choices that have to be taken? 4: Will the timing be right? 5: Is there, even yet, a correct appreciation of the problems with which we shall be faced? On the question whether this means business, I hope my right hon. Friend will not take amiss what I have to say. I feel very often nowadays that, in considering this matter of post-war preparations, we are in just as great an emergency, facing just as critical a time in the years that will follow this war, as we were at the time when we ought to have been planning for war. We were told before the war that all sorts of preparations were made. We were given numbers of these general statements about what was being done; but we found when the emergency came that we were far behind what we had been led to expect. Therefore I ask myself now, Is the same sort of thing going to happen again? I have the feeling sometimes that one has when one goes in to a see a film, "This is where I came in." I wonder whether this is the point where I came in, the point of failure to prepare in time and adequately. I ask, are we preparing with due seriousness and urgency for the problems we shall have to face after the war? It is not good enough to be told, as we were told by the right hon. Gentleman, that we are going to do much better than last time. Merely to do better than last time is not enough. We have very much more difficult problems to face after this war than we had after the last war.

The hon. Member for Stoke called attention to one matter which seemed to reinforce one's doubts about the reality of the Government's plans on these matters. He called attention to a Report by the Select Committee on National Expenditure which tried to examine this question of what would be the Government's stores and property at the end of this war. I was very glad he called attention to it because it is a Committee of which I happen to be a member, and we do not find that our Reports generally receive quite as much attention as we think they deserve. I can say that it came as a great shock to the Committee to find that nowhere within the Government was anyone charged with keeping a complete record, a complete inventory, of Government property. I refuse to believe that we can prepare properly for the disposal of property if we do not know what we have got.

On my next point, as to where is the responsibility, I would ask whether this matter is to be handled by one Minister or whether there is going to be confusion, or what is commonly called co-ordination. I want to raise one particular point in paragraph 17 (a) of the White Paper. We find that the Ministry of Supply and the Ministry of Aircraft Production will both have very important parts to play in this programme. The Ministry of Supply, as I understand it, is a war-time Department. How long is the Ministry of Supply to function? I know it is a difficult question to answer, but it is connected in my mind with what I believe to be a very important consideration which I wish to put to my right hon. Friend and to his colleagues on the Front Bench. We have been told in the White Paper on employment policy that the Board of Trade is to carry the primary responsibility on all matters of industrial policy, and that the Board of Trade is to be suitably strengthened for that purpose. I want to know when that responsibility is to begin to operate and when the suitable strengthening of my right hon. Friend's Department is to start.

I see the need for the handling of these matters with an eye to our constructive industrial tasks in the future, and I see my right hon. Friend apparently charged, or very shortly to be charged, with the responsibility for leadership in these matters. Yet I see him operating in a field in which there are huge colossi of wartime Departments, the Ministry of Supply and all the other wartime Ministries which, I imagine, must have a considerably greater say in all these matters than he has. Is he, for example, entitled to inquire into the future of the iron and steel industry? What has his colleague the Minister of Supply to say to that? Yet there we have a fundamental part of the structure of British industry which needs to be considered. Therefore I think one is entitled to raise this question, Where is the responsibility? Is it going to rest clearly enough on particular shoulders, so that we can trust to this job being done properly and in a properly concerted way?

I come to my next question, Will the national interest dominate at all points? There I claim to be on common ground with the hon. Member for West Fife (Mr. Gallacher) that when any question of doubt arises the only criterion should be, What is the national interest? I happen to believe that the Government are right in suggesting that the handling of the disposal of these stores should be left mainly to the people who are in that particular business already. I say that not because I want them to get a profit; I think the word "profit" is misleading. I want them brought in to do a service, but I would not defend that policy unless I felt convinced that by these means the Government would get the job done very much more cheaply and effectively than it would be if they tried to handle the whole thing themselves from some huge centralised Department. That is fair ground to take. I may be wrong and the hon. Gentleman may be right, but do not let us have this argument about "profit" all the time. It is out of their so-called profit margin that these people would have to carry their expenses for handling these very important transactions.

On the question of timing, my fourth point, that links up with what I was going to say on my next point. It seems to me that a great deal of business ought to be considered even now. I am very much concerned about all I hear of the way in which we are losing opportunities for just keeping a foothold in export markets. The excuse is always put up tat the war emergency comes first, and so, of course, it does, but I believe that if one goes about the country one finds now many places where there is not great urgency of demand. One finds materials available, and even a small quantity of material properly allocated now would help many of our export industries to keep a footing in markets which they are in danger of losing permanently. Therefore, I hope this whole question covered by this White Paper will not be considered as a problem which only begins when hostilities are over.

My last point, which I must deal with very briefly, is the question whether the problem will be properly appreciated. We have heard a great deal about consumer demand, and I hope very much there will be no attempt to hold stocks when there is a real consumer demand for them. But we have not heard nearly enough of the needs of industry for re-equipment, and I want to throw out an idea which I cannot possibly develop in full to-day. The whole of this matter of the disposing of the national assets and the handling of our national industrial equipment and set up must be viewed as a whole and fitted in together. We shall want to keep certain supplies going. We shall want to be able to supply certain export markets and our urgent consumer demand at home, but at the same time we shall lose our permanent place unless we direct some of our energies to the re-equipment and rehabilitation of our factories. I believe there needs to be worked out a sort of staggered programme by which certain factories are allowed to manufacture to meet consumer demand while others hold off to re-equip themselves. I do not believe that is a problem which can properly be regulated in the national interest unless the Government is exercising some general supervision and general guidance.

It is for that reason that I have pleaded for objective consideration of all these questions, without raising at every point the controversy about private ownership and Socialism. Let us, as I ventured to say in an earlier Debate, look at the matter and try to appreciate our position in a realistic way and ask ourselves what are the tasks that have to be done by bringing in the organising power and all the information and sources of information available to the State and at what points we are going to fail if we handle too much centrally. I believe that those two questions apply to the handling of certain stores just as much as they apply to all the other issues which are involved in our policy of providing full employment—that goal which we all long to see attained.

What I want finally to put to my right hon. Friend is simply this. I will back him up in every stage of his plans, if he means business, but I promise him, and every other Member of the Government, my complete uncompromising criticism and hostility on every possible occasion if I find that, when the need arises, they are not ready with proper plans to deal realistically with tasks which, as I have already said, are going to be just as vital to the future of this country as were those that faced us at the beginning of this war.

Mr. A. Edwards (Middlesbrough, East)

I am grateful to the hon. Member for Walsall (Sir G. Schuster) for expressing so clearly the grave doubts which many of us feel about the Government's preparedness for the emergency which is approaching. I agree with him that it will be almost as great an emergency as that which we faced when the war came. I believe that the Government are not nearly so prepared as they have led us to suppose. I am glad that the hon. Gentleman mentioned the Reports of the Select Committee on National Expenditure. I spent two years working practically full-time on that Committee, with the hon. Gentleman. I resigned from that Committee for the simple reason that, when we had issued 50 Reports, the Government had refused to give a single day for discussing any of them. Over 30 Members were giving practically their whole time to considering these important matters, and they issued Reports frequently, and all we got from the Departments was an offensive summary, saying that they had been carefully considered. I remember that a very important Report, to which I drew the attention of the House, was dismissed by the Department in four sentences. They said, "We hope that this will be accepted by the Committee as adequate comment." That was an insult to the House of Commons.

One of our Reports was about the overstaffing of the Departments. I visited the Ministry of Supply on one occasion, and saw the Minister. When I had finished my business with him I went to one of the highest officials there. He assured me that we need not worry about over-staffing, because they were going to get rid of many of the officials. He agreed that there were far too many people, drawing big salaries, but he said that it was all right, because there was going to be a clean sweep. I said, "What do you mean by a clean sweep?" He said, "I can give you 1,000 before lunch." I assumed, from the way he spoke, that there would be another 1,000 before dinner. I gave him a month, and then went back; and I found that the only person who had been swept out was that gentleman himself. That is an indication of the power of the officials who reply to a very important Report of ours in four sentences, saying, "We hope that this will be accepted by the Committee as adequate comment." This is not an attack on the Civil Service, but an attack on a state of mind. No individual is made to be responsible, but everybody is able to say, "It is not my responsibility," and you can never track down the person, or even the Department, that is responsible. I would far rather give one man very great powers, and make him responsible, and be able to sack him if he fails, than allow many people to pass on the responsibility from one to the other.

One hon. Gentleman, who has now left the Chamber, referred to some figures quoted by my hon. Friend the Member for Stoke (Mr. Ellis Smith), and misled the Committee, perhaps not deliberately. He said that the figures quoted by my hon. Friend showed that the Government investment amounted to £2,000,000,000, and the private enterprise investment to £350,000,000, and that, as private enterprise produced more than 50 per cent. of the total armaments, that showed how inefficient was Government control. He said that my hon. Friend's figures were wrong. My hon. Friend's figures were all right. He was taking into consideration the enormous sums of money that the Government had to spend on factories, not productive in themselves, which were let to these people with an investment of £350,000,000. If they had not produced more than 50 per cent., they would have been extremely inefficient. The hon. Gentleman was misleading the Committee by suggesting that the Government were just one-fifth as efficient as private enterprise. I hope that the hon. Gentleman will take the opportunity of apologising for that contribution to the Debate.

The problem facing us is that men, through hard work, through blood, sweat, and toil, have produced this enormous surplus. You would think the problem could be solved by the men taking a holiday. In any sane system they would be told, "Having worked so hard to produce this surplus, you can now take it easy for a time." One hon. Gentleman said that we should keep the controls until supply equalled demand, and then get rid of the controls. That is to say, we should get through all the real difficulties with controls, and then, as he said, rather naively, "Competition will take care of us." Of course it will. It may even cut prices for a time until the inefficient people are knocked out of business, and their businesses are bought by the others, but then prices will go up. What the Government are aiming at is the stablising of prices, of production, and of employment. The hon. Member who says "Competition will take care of us," seeks to destroy the whole of that policy. Under competition they do not profess to have stabilised prices. It is a matter of cutting prices until they have a monopoly, and then of raising the prices.

I have a friend who is in business, selling a very small commodity costing about 1s. 6d. At the end of the war there will probably be enough of these gadgets to last us for 10 years. The trade association say, "The Government should sell them to the industry at a penny apiece, arid we will agree to destroy them. Then we can keep our factories going producing the normal demand in the post-war world." That shows the falsity of the whole system under which we are existing. It suggests that men want work for work's sake. They do not; they want work for wages, and they want wages to buy the necessities of life. We have even tried the same thing with ships—destroying two ships to leave us with one new one. That is an insane way of doing things. There must be a more sane way. If we are going to preach coalition, let us practise coalition. The Minister said that one of our problems would be a shortage of factories. I thought there was going to be a surplus of factories. Does the Minister really contend that we shall have a real shortage of productive capacity?

Mr. Dalton

What I said was that there would be a shortage of good modern factories. As my hon. Friend knows, a lot of the factories in this country are neither good nor modern.

Mr. Edwards

I should have thought that there was an enormous number of very modern factories erected during the war.

Mr. Dalton


Mr. Edwards

The problem is that a good many of them are not in the right places. The Minister found himself in the position of having to put factories in places where nobody ever thought of putting them before. I should not, however, have thought that there would be a serious shortage. The capitalists do not want to rent these factories. They object to that. They want to buy them from the Government. Well, I have no objection to that.

I come now to paragraph 10, which is the heart of this thing, and to the question of the rate of release, the method or channel of distribution and price control. I would like to know just at what rate these stocks are to be released into the trade schemes. Some things, of course, will be obsolete, and you may have to get rid of them. What is the rate at which goods will be released? Will it be a varying quantity but a fixed percentage of, say, 5, 10 or 50 per cent. per annum.? Will the Minister give us some inkling of what the formula will be, because it will be of very great importance to people within industries making their own programmes? As to channels of distribution, someone argued earlier in the Debate that the newcomers in industry should have a share in the spoils. It is true that a lot of people came into distribution during the war who were not in it before. One gentleman was placed in control of a very important industry by the Ministry of Supply, and I watched the way in which he deliberately introduced his own tools. I have watched in the Timber Control people manipulating imports of timber. That was not very pleasant to watch, and on one occasion there was a noise made about it, but not too much.

These people, because of the advantage they have taken of the war situation, ought not to get all the plums after the war. I think the genuine distributors in the trade before 1939 should be the people to distribute these things after the war, in proportion to the trade they did before the war. I think that would be a very fair way. These goods are not going to the highest bidder in an auction sale. There will be a fair amount of wastage. Will not the Minister tell us that there will be a valuation of the property to be disposed of? In other directions, we have been given to understand the basis on which valuation is to be made. I hope people are not going to get great bargains as some people did after the last war. The Minister said, I think quite rightly, that was what we were trying to avoid.

There is only one other thing I would like to say, and that is on the necessity of having a war potential. If we are considering the possibility of another war and the question of putting ourselves in a position to meet that possibility, I should have thought that Government control of property would be necessary and that no property in our war potential is going to be sold to anybody. While it might be left, I should have thought it would always be at the Government's disposal. We have heard of the case of one boiler being sold for £800 and another for £80, and we have heard that this is necessarily destructive of trade. We want to keep the prices at the lowest possible level. The boiler sold at £80 should have made some contribution to the reducton of costs and the community should have got the benefit.

Sir G. Gibson

The question is perfectly simple. If, with any commodity, the Government flood the market at an uneconomic price, they will depress industry and throw people out of work. There is no alternative. That policy of buying a boiler for £80 at which price it could not be produced, operated throughout the whole of industry, would throw people out of employment.

Mr. Edwards

My hon. Friend does not see the fallacy of his own case. The boiler would have been used in any case, whether it was bought for £80 or £800.

Sir G. Gibson

I was dealing only with one instance, and I said that if that kind of thing applied throughout the whole range of commodities, and if that was the policy operated by the Minister representing the Disposal Board, it would spell disaster for any particular industry.

Mr. Edwards

I think I see my hon. Friend's point and I am trying to correct him. Let me put this to him, because he must face it sooner or later. Before the war, there was an abundance of everything and no shortage of anything that human beings required for their health and happiness, and yet there were deliberately organised scarcity, poverty and starvation. There was one period when men were volunteering to fight for their country and five out of six were rejected. They had been starved and were victims of malnutrition. Look at the records of the period, when five out of every six were rejected. In the midst of abundance we deliberately organised scarcity, and in the midst of war and of scarcity we have contrived to organise enough for everybody and a higher standard of life than existed before the war. Hon. Members who have preached that the system which did that is a bad system and must cease to be should thank goodness that many of us on this side of the Committee have insisted on some of this organisation, and they should set themselves to face, as the hon. Member for Walsall has just said to the Committee, a greater crisis ahead than that Which we had to face when we entered the war. Surely, in the interests of the people who have done the fighting, we are not going back to this insane, cutthroat competition. Let the Committee awaken to a realisation of the position.

Lieut.-Colonel Sir Thomas Moore (Ayr Burghs)

The hon. Gentleman the Member for East Middlesbrough (Mr. A. Edwards), who made what is from some points of view an admirable speech, ruined it, in my opinion, by using several times a term which I feel sure on further consideration he would wish to withdraw. He referred to "deliberately organised shortage" and "deliberately organised starvation." He has deliberately charged certain individuals in this country with deliberately organising the starvation of their fellow men. For one thing he knows it to be untrue, and he has no possible proof to justify such a declaration and charge against Members of this Committee or of any Government.

Mr. A. Edwards

Has the hon. and gallant Gentleman forgotten the time when, they used to pour milk down the drains, throw fish back into the sea, and stoke the boilers in America with wheat? Can it be said that to do this in the midst of plenty is not to do it deliberately? They did it deliberately for the profit system. Hon. Members should crawl on their knees and apologise to the community and should not pretend that they did not Know it. They did not care.

Sir T. Moore

I admit that at times there was a certain lack of organisation in our pre-war trade. There was not that collaboration which should have led to the preservation of all the essential means of life, to which the hon. Member has just referred.

Mr. A. Edwards

The hon. and gallant Gentleman is trying to evade the point. There was a deliberate destruction of foodstuffs and the necessities of life. The system and the people whom the hon. and gallant Gentleman supports were responsible. They may plead ignorance, but they should have known the consequences.

Sir T. Moore

I agree that before the war there was a certain amount of disorganisation about our trade and that certain individuals such as those to whom the hon. Member referred adopted the sinful policy of trying to corner certain products of the earth for the benefit of their own pockets rather than to secure them for the benefit of the people as a whole. But I cannot accept that charge, nor do I think he would willingly make it himself if he were not speaking perhaps from those Benches, that certain members of our community are deliberately trying to starve their own fellow people. But that is by the way.

I happened to be, after the last war, associated with the supervision of Disposal Board stocks, and I was shocked at the methods then adopted. That is why I hoped that I might catch your eye, Mr. Williams, so that I might be able to make a few remarks in this Debate. There were contracts involving millions of pounds given to obscure suburban auctioneers, to men with no knowledge of the types of goods they were handling at knock-down prices, and these colossal profits—I am using the word "colossal" deliberately—were made at the expense of the consumer and the Government. In fact the consumer was paying twice, first as taxpayer to produce the goods, and, secondly, as consumer to buy them. There were many palms being greased in the process. That is what we want to evade in this connection.

Mr. A. Edwards

The hon. and gallant Gentleman will be having to apologise.

Sir T. Moore

I think that the White Paper goes a long way towards providing the formula, but not far enough. I liked the speech of the President of the Board of Trade much better than I like the White Paper. It was clear, it was more decisive, and it was certainly much more enlightened. If the right hon. Gentleman carries out the obligations implied in his speech, and ignores the White Paper, probably we shall get much further in the wise and orderly disposal of the nation's goods after this war. There are many points in the White Paper with which I do not agree. There was one point which the right hon. Gentleman did not touch upon, although the White Paper mentions it, and it is one which is rather important. It is the last item in the White Paper and the first one with which I will deal, namely, Lend-Lease. I am not different from the rest of this Committee. I do not understand Lend-Lease and I do not suppose that anyone else understands it either. At the same time unless it is made clear what our obligations to the United States will be after the war, it is no use talking about disposal. We have received hundreds of tanks, planes, trucks of various kinds, including equipment, from the United States, and if Lend-Lease means anything it means that we hand back these trucks when the lease has expired or when the loan period is over. Obviously, that is absurd. We should have some specific declaration from the Government on what will be our position, vis à vis America, in regard to the goods and finished articles we have received under Lend-Lease.

I would like to refer to what has also been mentioned by the hon. Member for East Middlesbrough, namely, the suggestion in the White Paper, and one which was subsequently elaborated by my right hon. Friend, that each practical Ministry will become its own disposal board, while my right hon. Friend and his Department act as the useful friend, or the honest broker. I do not think that that is right. I do not agree with it. You will have clashing and competing interests, and overlapping as long as you do not appoint one definite, even if temporary, Ministry to deal with this problem. You have a Ministry of Supply which is a war-time Ministry. It is bound to disappear; we have been told that it will disappear after the war, and possibly immediately after the war. Why not turn the Ministry of Supply into a temporary Ministry of Disposal with a view to co-ordinating all the various Ministries, taking from them possibly useful members of their staff, but having one Minister solely responsible who, as my right hon. Friend said, could be sacked if he proved to be inefficient?

We know that the Navy and the Air Force will have planes to dispose of; we know that the Army, Navy and Air Force will have trucks to dispose of. There is practically the same type of vehicle or stores belonging to different Departments which obviously could be disposed of by the same Ministry. Therefore, I would ask my right hon. Friend to think that over. The Ministry of Supply is there at hand, and I suggest they should be left in sole charge of the distribution and disposal of these stores.

Mr. Dalton

May I get my hon. and gallant Friend's suggestion right? Is he including the question of fixing prices?

Sir T. Moore

I was coming to that. That will have to be done beforehand. It is not a question which could be decided as the disposal actually came into being. Price-fixing will have to be done before the war ends, with very slight fluctuations due to wear and tear, standing out in the open, and waiting at dumps, and so on. That can easily be arranged on a sliding scale, however, after the basic price has been fixed. There must, of course, be price control to protect the consumer. As I said at the beginning, I saw the consumer exploited to an intolerable degree after the last war, and it would be quite inconceivable for this Committee to agree that it should be done again. There will be a great temptation because a speculator, probably with vast funds behind him, or at his command, will come to the Government or appropriate Department and say, "I can save you all sorts of trouble and a lot of time. I will take over the whole of your particular type of stuff and arrange to dispose of it and take all the burden off your shoulders." Do not be deluded into that sort of thing. Let the Minister stick to his declaration that the various materials will be distributed, or disposed of only by the people who have been in the habit of handling them.

I am not so sure that my right hon. Friend is right in ruling auctions altogether out of the question. It may seem like tempting people to bid more than the actual market price, but what you want to do with these goods is to see that they are distributed where they are needed, all over the country, so that the small farmer who wants a plough will not be deprived of it because it may be disposed of 100 or 200 or 500 miles away. I think it would not be a bad idea to arrange for small dumps and auctions throughout the country so as to satisfy them that the market is where the goods are needed.

Mr. E. J. Williams (Ogmore)

But surely the Ministry of Agriculture would be the best Department to organise that?

Sir T. Moore

Then we come back to overlapping of effort, which I deprecate. I still think it would be better to have it all under one Ministry. But let officers from the various Departments who have been concerned in handling this question, be attached to the Ministry of Supply. As my right hon. Friend himself said, the Ministry of Supply has been responsible for buying the majority of the goods which will subsequently be disposed of, and therefore it would seem that my proposal is not a bad one. Then there is the question of utilising the man with a big organisation. I have no great objection to that provided you fix a consumer's price and add on to that your 20 per cent., or whatever it may be, to cover handling storage, and all the various items that must, inevitably, arise between the man who buys and the man who sells. Twenty per cent. can be quite easily disposed of, if you are arranging storage, having regard to labour and getting out various plans. But that is a matter for the Ministry. I am not concerned with it because I am not a competitor in this matter. However, if you fix your consumers' price and then add on a legitimate payment for services—I will not call it profit because it is not—then T think that is probably a good method of disposal.

Another thing I noticed during my experience of the last war was that when the Government gave instructions for a certain type of vehicle or commodity to be disposed of, they did not make it clear that that was the ultimate commodity. It is necessary to make sure that if new vehicles and new stores or part-worn stores are sold and a different price obtained for each, it is actually the new stores and actually the part-worn stores that are supplied. Therefore, although I dislike suggesting it, I am afraid there should be inspectors to see that correct stores are sold for the correct basic price.

To what extent will our men, officers, and N.C.Os. have priority of claim on these stores before they are released to the general public? There will be hundreds and thousands of young men with gratuities, who wish to start out in some form of business and who might well benefit considerably were they given priority rights in regard to this material and these stores before these are finally released to the public. I am quite sure my right hon. Friend has had that in mind because it seems such an obvious thing to do. Finally, my right hon. Friend mentioned in the White Paper that it might be advisable and appropriate to sell to or through a non-profit making corporation. I think there is a lot in that idea, for then we eliminate problems in regard to excess profits, trickery and duplicity. I believe that idea might well develop and, indeed, be adopted as the general policy by which these war department stores are finaly disposed of.

One very important point which has not been touched upon is, What will the Government do with their ammunition, shells, and all these weapons of war? After the last war they were disposed of to certain other countries, to South America, to the Far East, to the Balkans. Do not ever let us fall into that error again. It merely means undoing the very progress we are trying to make in building up a world in which there will be no war. Once we let loose these lethal weapons and their ammunition, we are giving moral encouragement to the nations to which we sell to break the international law which we hope to set up and see kept by all nations after this war.

Mr. Jewson (Great Yarmouth)

I do not propose to discuss the whole White Paper at length but to raise one point of particular interest. I am very glad we were told that pounds, shillings and pence are not to be the only consideration of the Government in realising the goods which remain on their hands at the end of the war. I think that is perfectly right. In the ninth paragraph we read that some of the surplus may be allocated to relief and rehabilitation of liberated territories, meaning, of course, territories on the Continent of Europe rather than here at home. I was a little surprised at the storm which suddenly sprang up when my hon. Friend the Member for Southampton (Dr. R. Thomas) suggested that we might look at home as well. But I am encouraged by the fact that my hon. Friend the Member for Rugby (Mr. W. J. Brown) was allowed to have his say without a similar interruption. I think perhaps that in the first instance the matter was a little misunderstood. Unlike my hon. Friend the Member for Rugby, I have no personal interest in the hotel trade, but everyone is aware that catering for holiday-makers is one of the chief occupations of Great Yarmouth. It is for that reason that I want to put in a similar plea to that which has been put in for holiday camps. I do not ask so much as my hon. Friend the Member for Rugby, for I do not intend to mention the prices at which furniture shall be sold, but the important point is that if we want holidays—and we shall want them for a large number of people as quickly as we can arrange them after the war—we must have hotels and boarding houses to which they can go. Apart from the consumer interest, there is also the other side of the question. Surely the coastal towns in the Defence Areas are entitled to be included in the relief and rehabilitation schemes because of the special way in which they have suffered during the war. I therefore ask the President to give very special consideration to the supplying of furniture and other necessaries to hotel and boarding-house keepers at the end of the war. If there is a large quantity of furniture and other things available, as I hope there will be, I hope he will see that the people I have mentioned will have first claim upon them. I hope he will consult the Hotel Keepers' Association—I am not quite sure if that is the right name—and see that arrangements are made for these things to be placed at their disposal as soon as the war is over in order that they may be able to rehabilitate their businesses, and that places such as that which I represent shall have a chance of gettting on their feet again after the long period in which they have suffered all sorts of disabilities. That is the only point I want to raise; I will leave other people to criticise the White Paper.

Mr. Shephard (Newark)

Five minutes will be ample time in which to make the points I have in mind. We on this side of the Committee are just as concerned as anyone else to see that there is no profiteering in the sale of these surplus Government stocks. The hon. Member for Nuneaton (Mr. Bowles) said that these stocks should be sold without a profit. That, to me, envisages the Government setting a vast organisation all over the country to compete with ordinary retailers. Furthermore, even if this was done I am not at all satisfied that the prices at which they would be able to sell these stocks would be any lower, even after the normal trading channels had put on a reasonable profit. I think we can safely leave the matter of profit to the Central Price Regulation Committees which, in my experience—and I have seen some of their work—have limited profits, or at least have seen that there has been no question of profiteering where they have had the handling of these matters.

It was mentioned earlier in the Debate that Government Departments themselves would have a claim to any of the goods they required, and there was particular reference to the Colonies. I want to draw the attention of the Secretary of State for the Colonies to Malaya, and the attention of the Secretary of State for India and Burma to Burma, because both those countries will want some priority. Both will have been devastated completely by the Japanese, and I ask them to keep these two countries in mind when they are seeking to apportion their requirements. With regard to buildings, as most hon. Members know, the Government have taken over a tremendous number of factories and warehouses, in which they have stored war materials. These materials, which are the subject, presumably, of this White Paper, will have to be removed from that storage before the owners of those premises can resume their normal activities. About twelve months ago I, in common with other industrialists, received a long questionnaire from the Board of Trade dealing with the post-war requirements of industry, and I found it was impossible to fill it up with any satisfaction because I did not know when my own requisitioned premises would be restored to me, or when ample raw materials would be forthcoming. Therefore, I ask the President to keep this point in mind. It is quite impossible for industrialists to plan for the future unless they know exactly the Government's intentions with regard to the early release of these warehouses and factories.

One last point. I understood from the President that most of these factories would be leased. I am in full agreement with that, but I would point out that many will require considerable sums of money to be spent on them to make them suitable for whatever type of industry they will be used for, and I think that if a lessee has had to spend a large sum of money on making premises suitable he should be given the option of purchase after a certain number of years. Many of these Government buildings are of enormous size and I hope that those in the vicinity of large towns will under no circumstances be leased to one firm. I think they lend themselves very well to being split into small 5,000 or 10,000 feet areas, so that the smaller industrialists will have a chance of having adequate premises when the war is over.

Mr. Hugh Lawson (Skipton)

As there is not much time, I will come straight away to the point I wish to make. Almost every Member, including the President of the Board of Trade, has commented in some way or other on the necessity for preventing profiteering in the disposal of Government surplus stores. It is the main point of this White Paper. In his speech the President was interrupted, when he was talking of profit, by an hon. Member opposite who suggested that it would be better to call it "reasonable remuneration." It strikes me that hon. Members opposite regard profit in rather the same way as the girl in the story regarded her illegitimate child. She excused it on the ground that it was only a very small one, and it seems to me that profit is being excused on the ground that it is only very small. So I want to address my remarks to a consideration of what is reasonable remuneration in the disposal of these goods. The hon. and gallant Gentleman the Member for Ayr Burghs (Sir T. Moore) suggested that a fixed percentage, which he did not name, should be added on to the fair price. If he accepts that, 1,000 pairs of boots at £1 each is exactly the same thing as 500 pairs at £2 each, so that a man could get the same reasonable remuneration for distributing just half the amount of goods. That illustrates the difficulty of profit as a means of giving reasonable remuneration.

Why can we not see if we can pay the people who devote their time and energy to the orderly distribution of these products in accordance with the quantity and quality of the work they are doing and the responsibility they are taking? It would not appear to me to be a very difficult thing for the community to decide, as between one man and another, what should be the relative levels of income. I once asked an acquaintance who had spent a considerable number of years in Russia and who, as the result of a rather sensational trial, had been deported, what was the ratio in a large factory between the wages of the man who controlled the whole of it and the man who swept the floor, and he said, "Somewhere in the region of one to three." The boss got three times as much as the man who swept the floor. I do not suggest that we. should apply that exact ratio. I am not worried whether it should be one to five or one to ten, but we ought to try to get some reason in the matter of remuneration between the man in the office who arranges for the disposal of the goods and the man who goes down a mine to cut coal. I think it follows that the present principle, which is that nothing can be done in industry unless there is a profit, a profit which may be drawn by a person not actively engaged in distribution or industry at all, but who happens to own a proportion of the shares in the concern, is a principle that can never produce a fair distribution of income among the people. It seems to me that those who have asked that we shall have reasonable remuneration for work done are rejecting one of the principles on which industry runs to-day. The Committee may doubt my authority to speak on behalf of industry because I am not an industrialist, so I should like to quote the hon. Member for Pudsey and Ottley (Sir G. Gibson), who said: At the moment industry is actuated by patriotism and the desire to see this war brought to a successful conclusion. When the war is finished, the incentive in industry will be profit, because anybody who goes into industry knows that success in industry is measured by the profit one makes."—[OFFICIAL REPORT, 21st June, 1944; vol. 401, C. 263.] I do not think the British people are prepared to measure the success of industry by the profit that it makes. I think they want a means whereby the success of industry can be measured by the sum total of human happiness that it produces, giving jobs at reasonable wages and producing the goods we want. Therefore, I do not put much store on this Paper. The President of the Board of Trade said that to some extent it left things open for the decision of the future. I heartily agree with him in that. He spoke of other Governments and other Parliaments deciding this matter, and I look forward to the day when he and the party of which he is a Member are free to settle these problems in accordance with the principles in which they believe.

The Parliamentary Secretary to the Board of Trade (Captain Waterhouse)

We have had a Debate on one of the most difficult, as well as one of the most interesting, subjects that occupy us to-day. There has been a considerable measure of agreement, with one or two rather notable exceptions. The hon. Member for Nuneaton (Mr. Bowles) said I must have overlain the President of the Board of Trade. If that is so, he has come up smiling after the ordeal. The hon. Member for Stoke (Mr. Ellis Smith) opened the Debate with a good slashing attack, and I should like to deal with two specific questions that he asked me. Firstly about holiday camps, one at Filey and the other at Carnarvon. I have not been able to get information about the one at Carnarvon, but I will communicate with him. The one at Filey was built by Butlins on their own land and it was agreed that they should re-purchase it at half its cost. Therefore I do not think there was any jiggery-pokery about that deal at all. It was merely the fulfilment of an agreement.

Major Sir Goronwy Owen (Carnarvon)

The same considerations apply to the site at Carnarvon. Butlins Limited sold the land for a nominal sum to the Admiralty and were commissioned to rebuild the camp and repurchase it at a fixed price.

Captain Waterhouse

I thought that was probably the case but, not having been able to check it up, I could not give the hon. Member the assurance. The hon. Member also asked about a mountain of ore at Sierra Leone. The facts are that the company before the war was producing 250,000 tons of iron ore per annum. The Ministry of Supply assisted them by paying for the machinery to increase the ore supplied, to the value of £290,000, as a result of which the production of the company has gone up to 400,000 tons a year, all of which is being taken up and is the property of the Ministry of Supply. So that this mountain is possibly nearer a mole-hill in its effect. The ore is going steadily into consumption.

Mr. Ellis Smith

I know the difficulty about iron ore but there are large deposits still in the ground. What I am asking is this. Seeing that the Ministry of Supply will be responsible for this large capital outlay, what is to become of it after the war?

Captain Waterhouse

What will become of the capital invested in machinery?

Mr. Smith


Captain Waterhouse

I take it it will be dealt with as other machinery which has been supplied to so many factories or will be subject to the disposal arrangements which are now being worked out. The Committee might be interested to be reminded of the exact working of the Disposal Board after the last war. My hon. Friend the Member for the Abbey Division of Westminster (Sir H. Webbe) was actively concerned in it. The Disposal Board was set up in January, 1919. It took over the work of the Surplus Government Property Disposal Board under the Ministry of Munitions. This is relevant because the suggestion has been made in certain quarters that we should have a similar board now. The Disposal Board, in fact, outlived the Ministry of Munitions and was abolished in March, 1924.

Various estimates have been made in the Debate of the possible amount with which we may have to deal, and it has been suggested that we should already have an accurate inventory, just as any business would have, so that we might look up a large ledger and say what the stocks of raw materials, consumable goods and all the rest of it are. If hon. Members will reflect, they will see the insuperable difficulties of having such a record in the case of Government stocks and munitions. Where, however, records can be kept they are kept, and because no records have been quoted and no figures given hon. Members must not assume that no figures at all exist. The Disposal Board in the last war sold altogether £642,000,000 worth of various commodities and assets. To give the Committee an idea of the extreme intricacy of what has been referred to as the cataloguing of these goods, Sir Daniel Neylan stated that he had divided his stocks into 350,000 different store items. When we mention in the White Paper four things which are not very similar, we are giving but a small indication of the diversity of the stores which will arise for disposal. Out of this £642,000,000, raw materials accounted for about £320,000,000, other sales at home £232,000,000, and other sales abroad about £83,000,000.

The general system started in the same way as we do now. That is to say, the Government Departments had to collect their various stores. In those days, I understand, each Government Department, having collected its own stores, handed them over to the Disposal Board, who were acting under the Ministry of Munitions. Now we propose to have for each class of goods one Government Department which will collect the stores from all Government Departments, catalogue them, and hand the list over to the Department which will conduct the negotiations of sale. To that extent our system is a simplification.

Mr. Bowles

I thought the right hon. Gentleman the President of the Board of Trade said that the Department which bought the stores would sell them.

Captain Waterhouse

I will come to that point later. The principle adopted by the Disposals Board—and here I am quoting the words of the then Parliamentary Secretary to the Ministry of Munitions, Mr. Hope, who later occupied the chair of this Committee—was to test the market, find the best price and then take any good offer approximating to the market price. That principle of the Disposal Board may be paraphrased into, "Sale to the best immediate advantage of the taxpayer." I suggest that we might take as the principle underlying this White Paper, "Sale for the real interest of the taxpayer which will generally be best served by the ultimate benefit of productive industry as a whole."

I believe the Committee will appreciate that our proposal is better than the original one, and, indeed, it ought to be, for the Disposal Board started completely in the dark and were sailing in an uncharted sea. We have their painful experience to guide us. Do not let me be taken as condemning the work of that Board. They did a great and difficult work, and although there were many shortcomings, there were many great achievements. Their task was far more difficult than ours, in one particular, as my right hon. Friend has pointed out, for they had no system of price control and regulation. They had to hold the price as best they could and arrive at a price as best they could, and it would be very hard to blame them, working with the poor tools they then had in their hands, if in many cases prices soared to the grave disadvantage of the people of the country as a whole.

The methods we propose to adopt are set out in the White Paper and have already been referred to in detail by my right hon. Friend. If I may go through them again, I think I can in that way best answer some of the questions that have been put. One question that has been raised by many Members is what is being done to ensure that we do not have the abuse of the resale of goods back again for Government purposes. This particularly applied to furnishings, and it was asked why a Government Department could not get furniture from the store. In so far as that can be done it will be done. Arrangements are being made to go through the stores and to ensure that anything which can be used for public purposes will be so used and will not go as surplus. Again, relief and rehabilitation will take great quantities of stores from the market before they are declared surplus.

Next, we come to the operative machinery section of the White Paper, paragraph 17. The collecting and cataloguing is to be done by one Department, which is normally the Department which has bought most extensively from the trade during the war. In many instances many Departments have bought from the same industry. Therefore, it is necessary to decide which has the larger interest. Normally, that will be the Ministry of Supply and they will be responsible for the collecting and cataloguing. The goods, when collected and catalogued, will be passed along to another Department, normally the Board of Trade, who will carry out negotiations for their sale. Why has this system been adopted rather than that of letting the first Department do the whole thing or, the other possibility, setting up another Disposal Board? In this war Government Departments—the Board of Trade, the Ministry of Works and others—have been in close touch with the distributive side of industry. In the last war Government Departments were in fairly close touch with the producing side, but not with the distributing side. We are now in close contact with the distributing side, and it would be the height of unwisdom to throw away all the departmental experience we have got, scrap the departmental organisation and to set up another. Hon. Members may say that the staffs could be transferred, but why transfer them? Is it not far better to work through an organisation which is in existence, which is doing good work now and working smoothly, rather than to move the organisation, reorganise it to a certain extent, and run the risk, as must always happen with large organisations, of getting creaking wheels and less smooth operation?

Sir H. Webbe

I find it a little difficult to reconcile what my right hon. and gallant Friend has said with paragraph 17 of the White Paper, which says that there will be one Department designated as the disposal Department, and that usually the Ministry of Supply will be the disposal Department and will arrange for the sorting, assembling and so on and for making the contracts of sale. I rather understood from what my right hon. and gallant Friend said that the actual opening up of the channels of disposal and, therefore, the contracts of sale, will rest with the Board of Trade because of their closer contact with the distributive trades.

Captain Waterhouse

I am glad that my hon. Friend has raised that point, because clearly there is a possibility of misunderstanding. The making of a contract, in that sense, is the actual physical making of the contract, such as the giving of instructions to the solicitor for drawing it up. The details of the contract will have been worked out by the Department which has done the negotiation.

Various hon. Members, for instance my hon. Friend the Member for Walsall (Sir G. Schuster), complained that there is too much generalisation, and asked whether we were really "getting down to brass tacks." I can assure him that this charge is ill-founded and that we are "getting down to brass tacks." We have already made approaches, as he may know from his industrial contacts, to a very large number of trades. I can give the Committee a very long list, but I will take five or six miscellaneous things, some small and some large, such as bedding, typewriters, cinema equipment, furniture and textiles, both wool and cotton. In a number of heavy industries we have also got agreement in principle to the formation of a non-profit-making corporation and the organisations themselves have submitted proposals in the form of memoranda. I think my hon. Friend will agree that that is real progress and that we are getting somewhere.

Sir G. Schuster

I do not want to interrupt my right hon. and gallant Friend, but I do want to get this point clear. I appreciate that a great deal of detailed work has been going on, but the point I am always trying to make is that all these details have to be fitted into some sort of national plan. I want to know from the Board of Trade, which I understand is to carry the leading industrial responsibility for the future, whether it is making its own survey of the whole of the industrial structure to see that these various parts fit into a proper plan.

Captain Waterhouse

On this White Paper we are not discussing the whole industrial structure. That is a much wider problem. This paper deals with a comparatively small part of that problem. I quite agree with my hon. Friend, however, and I must ask the Committee to believe that we are doing our best to see that the arrangements we are now making will fit into the general picture of this country, as the Government see it, after the war.

Some questions have been asked about certain specific industries. My hon. Friend the Member for West Birmingham (Mr. Higgs) raised the subject of machine tools. He realises, of course, that some of the machine tools now in use are specialised for munitions and will have no post-war value at all, but the vast bulk of them have some general use. Some of these will presumably be left in the factories and disposed of with the factories. I can assure him that we have definitely in mind the desirability of persuading engineering shops and repair shops of all sorts to take the opportunity of throwing out their old machinery and of putting in plant which we shall be able to offer at a fair price, thereby increasing their general competitive power, both in the home market and, what is far more important, in the foreign market as well.

Mr. Hammersley

Does that mean that, when machine tools are known now to be surplus, a list of those machine tools is circulated to the trade so that, if the trade require them, the tools can become available?

Captain Waterhouse

No, I do not want my hon. Friend to think that I mean that. I do not know what arrangements the Minister of Supply may be applying to the immediate disposal of machine tools, but I should have thought that machine tools for disposal now were very few and far between. I am speaking of the surplus which will arise when the war is over.

The hon. Member for Rugby (Mr. W. J. Brown) spoke of his holiday camp and of the furniture which had been requisitioned therefrom and for which he was to get only the 1939 price. This 1939 price, I agree with him, is a very vexed question. It does not only arise in connection with furniture, but also, as he knows, under the town and country planning legislation which we had before us a little time ago. I do not know whether he would adopt the same critical attitude towards those proposals for compensation as he does in regard to his own furniture.

Mr. W. J. Brown

It would be out of Order for me to reply fully to that point, but perhaps I may say in a general way that consistency is not always the hallmark of great minds, and that inconsistency is sometimes characteristic of great ones. I think it would be found that what I have said in connection with town and country planning will not be out of harmony with what I have said in connection with the present Debate. May I add that this is not my holiday camp that I am talking about? I find I am credited in the smoking room already with the possession of £10,000 worth of furniture.

Mr. R. J. Taylor (Morpeth)

Did not the hon. Member say "my holiday camp?"

Mr. Brown

It is not my camp. I was speaking of the general industry.

Captain Waterhouse

I was under the impression that it was a little private venture of the hon. Member, and if it had been, let me say that I should not have thought any worse of him for that. The Government have promised to give hotel keepers and others whose furniture has been requisitioned the right to buy back similar articles from Government surplus stocks at the prices paid by the Govern- ment, less the ordinary depreciation for wear and tear. I hope that will be of some use to the hon. Member.

Now I should like to deal with one of the most vexed questions of all, that of factories. One of our major aims is to avoid speculation. But we have been asked, "Why sell at all? Why not let this property remain Government property? Why hand back factories, for example, now being run by the Government, to private occupation?" I do not know that we intend to do that. Practically all these factories are being run by private enterprise.

Mr. Edgar Granville (Eye)

They have an option on them.

Captain Waterhouse

The factories were built by the Government and are being run by private firms. My hon. Friend says that they have an option. Where there is an option, quite definitely it is not the Government's intention to go back upon it. That option must stand, because it is in the agreement. The political issue is not quite such a vexed one as it might at first appear, because during the war it has been not the Government who have been the main producers, but private enterprise. The Government have taken private firms as their agents and it is private firms that are producing in the factories of which I am speaking, with the exception of some score or 30 Royal Ordnance factories, which come into a different category altogether.

Mr. Bowles

Suppose the Government provided a firm like Vickers at Weybridge with extra floor space for production on Government account; will that extra accommodation after the war be the Government's or Vickers'?

Captain Waterhouse

I really cannot make a definite statement, because circumstances in each case will vary tremendously. Sometimes the building work will have been done principally by Vickers, and the factory will be useful to Vickers after the war. Sometimes the extension will be nothing but a nuisance, and will have to be pulled down. Clearly, one cannot lay down a general rule in that case. Manufacturing enterprises may be asked to pay for work which has been done during the war, and which will be useful to them after the war, but it would be very hard to ask them to pay anything like market prices for work which, though valuable in itself, was not valuable for their particular trade. A certain confusion has arisen, or has been made to arise, on the question of margins and profits. My right hon. Friend said quite clearly——

Mr. E. J. Williams

Could the right hon. and gallant Gentleman tell us what the Government propose to do with the 20 or 30 Government factories?

Captain Waterhouse

The hon. Member is referring to the Royal Ordnance factories? They were not in my mind when I was answering that particular question. Many of the Royal Ordnance factories will remain Government property, and it has already been laid down in the Debate on the White Paper that there will be selection, according to local needs, of which factories will so remain and which shall be disposed of.

Mr. Williams

Has any selection been made so far?

Captain Waterhouse

No, it has not yet been possible. I will return to that for a moment or two if I have time. There has been some confusion, I think, on the question of profit and margins. It has been asked, "Why should any profit be made out of the disposal of Government stores?" Exactly what do hon. Members mean by "profit" in that sense? If the wholesaler or retailer is allowed to add 15 per cent. or 30 per cent., as the case may be, to the price he pays, do not let it be assumed for one moment, as has already been pointed out by my hon. Friend the Member for Walsall that this is profit. This contains an element of profit, but it pays for the service the trader is rendering by distributing these goods throughout the whole country. One does not expect a man, when he is working for the Government, to work for a bare subsistence wage. So one does not expect a trader to work for bare cost. He has a right to his margin, which goes to meet his overheads and a wage on his capital, in the same way as a workman has a right to his wages for his work for the Government. It is quite definitely our object to limit these margins and so limit the profits. To quote again from the Debate of 1920, Mr. Hope said: Attempts have been made to lower prices, but it was soon found that the benefit did not go to the consumer. Prices soared. Now we intend either to have a definite statutory selling price, or defined margins at each stage which will be laid down under our Orders. The House is very often critical of many Orders which my right hon. Friend lays on the Table, though this criticism is generally proved not to be justified, but criticism of price control, I am glad to say, is very rarely made at all.

Questions have been asked about sales abroad, Allied sales here and Allied sales overseas. Clearly these all intimately affect the problem with which we are dealing. Lend-lease goods, mutual aid goods, all these must be matters of negotiation, and I cannot pretend that negotiation has yet got very far. Negotiation will have to take place with the Dominion Governments and Allied Governments, but I can at least give an assurance that as far as our property abroad is concerned its sale will not cut across the general principles which we are laying down to-day. The Government have every intention of making arrangements with the Dominions and Allied Governments to bring policies into line, because, after all, their interest is directly the same as ours. They also must dispose of their stocks with as little dislocation to world trade as possible. May I finally say a word or two in rather greater detail about the factories?

Mr. Hammersley

Before my right hon. and gallant Friend does so will he deal with the point I made about the trade associations and narrowness?

Captain Waterhouse

I am glad my hon. Friend reminded me of that. We have said quite definitely, that we will negotiate through the existing trade channels, and my hon. Friend is nervous lest that should be too exclusive. Let me therefore explain that when we say that, we mean that we intend to prevent the outside speculator butting in to any of these trades and trying to take the cream off the milk. We do not at all intend to stop any bona fide entrant to the trade from coming in and starting up, if there is every indication that he is going to be a long-term trader as distinct from a short-term speculator. I think that is the answer.

If I may repeat the words of my right hon. Friend, which cannot be too much stressed, as regards Government factories, our normal procedure will be by way of lease for a suitable term, but the possibility of a sale out and out in appropriate cases must not be excluded. I have been asked how factories are to be allocated. Allocation will be a Government decision. The Government Departments concerned will be consulted, and the President of the Board of Trade will be answerable in the House for allocations so made.

Sir G. Owen

There is just one point I should like to make. Is it the policy of the Government to try to persuade people who are now working Government factories in certain areas, to shift their factories after the war to congested areas like South Wales?

Captain Waterhouse

My hon. and gallant Friend will remember we had a Debate on that very subject only a fortnight or three weeks ago. It is not really relevant to this particular matter and I hope he will forgive me for not being drawn away on that. There are other points with which I wish to deal. Allocation of theses factories will where possible be made forthwith. There is no question of waiting until after the war for all allocations. I believe that will relieve industrialists who wish to make their arrangements as soon as possible. My hon. Friend the Member for East Willesden (Mr. Hammersley) asked about security of tenure. It is in our mind to give a 10 years' lease of these factories in the first instance, but of course there will be cases where that will not be nearly sufficient to enable dispositions to be made. Such cases would come within the proviso of the quotation from my right hon. Friend I have just read—an appropriate case for an out and out sale.

My hon. Friend the Member for West Birmingham said that in the case of large factories leases might be unsatisfactory sometimes. It is for that very reason that my right hon. Friend—I again stress this—has put in these words that in appropriate cases sale must not be excluded, though the other will be the normal practice. I hope I have done something to remove the worst fears of some opponents of this measure. I hope they will take my assurance that the President of the Board of Trade and I did not have an angry wrangle about this White Paper at all. We found ourselves, on this as on most other subjects, in happy accord. It is in that spirit of accord, arising from a sense of what we believe to be best for the ultimate progress of this country, that I submit these proposals to the Committee, and I hope they may be acceptable.

Question put, and agreed to.

Resolved: That a further sum, not exceeding £83,981,473, be granted to His Majesty, to complete the charges for the following Departments connected with the Disposal of Surplus Government Property for the yeas ending on the 31st day of March, 1945, namely:

Class VI., Vote 1, Board of Trade 1,448,833
Class X, Vote 12, Ministry of Supply 90
Class VII., Vote 4, Ministry of Works 4,162,270
Class X., Vote 16, Ministry of Works (War Services) 90
Class X., Vote 2, Ministry of Aircraft Production 90
Revenue Departments, Vote 3, Post Office 78,370,000
Navy Estimates, Vote 12, Admiralty Office 100

The CHAIRMAN then proceeded, pursuant to the Order of the House this day, to put severally the Questions, "That the total amounts of the Votes outstanding in the several Classes of the Civil Estimates, including Supplementary Estimates and the total Amounts of the Votes outstanding in the Estimates for the Revenue Departments, the Navy, Army and Air Services be granted for the Services defined in those Classes and Estimates":—