SUPPLEMENTARY VOTE OF CREDIT, 1944

HC Deb 20 October 1944 vol 403 cc2679-731

EXPENDITURE ARISING OUT OF THE WAR

Motion made, and Question proposed, That a Supplementary sum, not exceeding £1,250,000,000, be granted to His Majesty, towards defraying the expenses which may be incurred during the year ending on the 31st day of March, 1945, for general Navy, Army and Air services and supplies in so far as specific provision is not made therefor by Parliament; for securing the public safety, the defence of the realm, the maintenance of public order and the efficient prosecution of the war; for maintaining supplies and services essential to the life of the community; for relief and rehabilitation in areas brought under the control of any of the United Nations; and generally for all expenses, beyond those provided for in the ordinary Grants of Parliament, arising out of the existence of a state of war.

11.8 a.m.

The Chancellor of the Exchequer (Sir John Anderson)

When I addressed the Committee on the occasion of the last Vote of Credit in July, I said I expected to have to ask for a further grant about this time. According to the latest estimates, the present Vote will be exhausted during the first week in November, and I have, therefore, now to ask the Committee for a further Vote to provide for war expenditure during the next few months. The Committee will notice, from the Estimate that has been circulated, that I am asking on this occasion for a grant of £1,250,000,000 instead of the more usual £1,000,000,000, and hon. Members may recall that a similar course was found necessary on the occasion of the corresponding Vote last year. The reason, as I explained then, is simply to avoid the inconvenience that would arise from a smaller sum becoming exhausted, as it very probably would, during the Christmas Recess.

During the last few months the average daily rate of expenditure from the Vote of Credit has fluctuated considerably, with a general tendency to rise. The average for the three months ended 30th June, for example, was a little over £13,250,000 a day, whereas in the succeeding three months to 30th September, it was nearly £14,000,000 a day. Taking a more limited recent average, for the eight weeks ended last Saturday, the expenditure has been at an average rate of £13,750,000 a day, of which £12,000,000 was on the fighting and supply Services. This rise, to which I call the attention of the Committee, has been attributable almost entirely to expenditure on the fighting and supply Services where, as I have said, £12,000,000 a day has been spent, comparing with an average of a little over £11,250,000 for the first quarter of the financial year. So that practically the whole of the increase is due to the greater intensity of our direct war effort.

In the light of these figures I hope the Committee will be willing now to agree to the Vote of £1,250,000,000 which, so far as can be judged from past experience and from present information, will carry us through till about the end of January. Of course, if any unforeseen developments should occur to necessitate an increase in the rate of expenditure, I should have to come again to the Committee with proposals.

Mr. Ellis Smith (Stoke)

It is not necessary for me to commend the Vote of Credit to the Committee. Most of us have proved by our record during the war that whatever is required for the war must be provided. We emphasise this morning that we look to the Chancellor of the Exchequer to ensure that the £1,250,000,000 is wisely and economically spent. We appreciate that some of this credit will be used to increase the pay of our men. There is some concern, however, on certain aspects of Government policy about which our people are, rightly, getting uneasy.

The first question I want to ask is: Shall we be given an assurance that it is the intention of the United Nations to act in co-operation on post-war economic policy? A few weeks ago my hon. Friend the Member for Gorton (Mr. Oldfield) and I were travelling home in the train, and seated opposite us were two American nurses. They offered us chocolate and we got talking. My hon. Friend and I, purposely, did not say a word to indicate our connection with public life. These two girls told us how they admired the British people, especially the English people whom they had met. [Interruption.] I think it is time someone spoke up for England. We hear so much about Scotland and Wales. Sometimes in this House listening to certain speeches one would not think that England had made a great contribution—abut we do not want to get involved in that discussion. These girls as I say paid a great tribute to the contribution which the British people had made. They referred to the fact that they had been in Liverpool and a number of other places and had been subject, along with our fellow-countrymen, to bombing and the black-out. They went on to say that when they wrote home they found that most of their people did not realise what the British people had gone through.

11.15 a.m.

There is no doubt that our people have passed through a terrible strain in this war, and I often think that some relatively well-placed people in London do not realise what the ordinary people in industrial centres have endured. I do not want to make too much of that, but I think it is time that it was recognised more widely in other parts of the world where they have not had to contend with the same difficulties. The President of the Board of Trade was one of the first in public life, along with a small number of others, to face the problem of the worsening international situation and accept the logical conclusion, which was to agree to an increase in our armed forces and armaments. I want to ask him and other responsible Members of the Government to approach post-war problems and the switch-over from the European war to the Far Eastern war in the same big way. Speaking on Tuesday, the President of the Board of Trade said: I have every hope that we shall find it possible to make a smooth and effective switch-over from war to peace production."—[OFFICIAL REPORT, 17th October, 1944; Vol. 403, c. 2320.] All sections of industry, in view of their war record, are entitled to expect the Government to plan an efficient and smooth change-over the situation that exists now, to that which will exist when we have to prosecute the Far Eastern war, and also when the war has completely finished. The Government are expected to plan to a greater degree than they are doing now. In the industrial centres we see no sign yet of preparation for this smooth change-over.

Mr. Lewis (Colchester)

On a point of Order. Is it in Order, on this Vote, to discuss something that is going to happen after the war?

The Deputy-Chairman

It will not be in Order to discuss legislation which may be necessary, but it is obvious, from what we have been doing in the last few days, that some of this money must be used by the Government in dealing with problems that will arise in the transition from the war to the peace period. Therefore, the hon. Member's speech, up to the present, has been in Order.

Mr. Smith

I thank you for that interpretation of the position, Mr. Williams, and I will carefully choose my words in view of your Ruling. In the industrial centres, I would emphasise, we see no sign of this smoothness yet. What we do see is the old method of discharge, after all that our men and women have done in the war. Since 1940, we have had to plan the maximum production for war, and all sections of our people have responded to every appeal made by the Government. We think the time has arrived when the Government should respond more readily to the difficulties that are arising through no fault of individuals, and that individuals ought not to suffer in the way that they are doing. We say that at this stage in the war there should be no wholesale discharges from industry, and that there ought to be a planned switch-over from the situation prevailing during the European war, to that which will prevail during the Far Eastern war. I have before me the White Paper dealing with the re-allocation of man-power between the armed Forces and civil employment. May I be allowed to read an extract: It is governed by the paramount consideration that there can be no break in the war effort after hostilities cease in Europe and that, in association with other Allied Powers at war with Japan, there must be the maximum deployment of the forces needed to bring complete and final victory at the earliest possible moment. It follows that in the interim period the problem will not be one of demobilisation, but of re-allocation of man-power between the Forces and industry in order best to provide for the requirements of the changed situation." We accept that and I believe that practically the whole Committee will support it. We consider that it is time we began to plan how to avoid discharges. The President of the Board of Trade, speaking on Tuesday, said: Tell us the sites, then the other things shall be duly considered."—[OFFICIAL REPORT, 17th October, 1944; Vol. 403, c. 2324.] That is an indication of the lack of national planning—

The President of the Board of Trade (Mr. Dalton)

That was a special reference to the tinplate industry, and was part of my account of the tinplate situation.

Mr. Smith

I thank the right hon. Gentleman for that explanation, but I did think it was an indication, to a certain extent, of lack of national planning.

Mr. Dalton

Quite the contrary; the exact opposite was intended.

Mr. Smith

I accept that. Between the two wars, we saw local authorities bidding against one another for sites of this kind, and we see signs in the White Paper that that is still likely to happen. We see one area after another offering inducements. This only leads to chaos. The time has arrived when all this bidding and offering of inducements should be cut out. We ought to have real national planning, with area or regional planning carried out in accordance with a national plan. If we are to continue to approach our problems in the way we have done in the past, this country will not hold its own and will not carry out the reforms that are so urgently needed. We want to maintain our economic position and to improve and build upon it so as to enable this country to be even greater in the future than it has been in the past.

While carrying out my duties at the beginning of the war, I met several representatives of the General Staff. I came away from meeting them feeling very disheartened, because, having followed modern warfare closely from the books that were published in Germany, Russia and other countries, I was convinced that a number of them had the Maginot Line outlook and that we were suffering accordingly. Later on, I met other members of the General Staff who had meantime been promoted to that rank, and I came away feeling that if our affairs were in the hands of men like that, I should have complete confidence in the way the war would be prosecuted. These new virile younger men on the General Staff, with their invasion courage, have been responsible for planning and executing the greatest military feat ever carried out in the world's history. Throughout the world now, and particularly in places like the Soviet Union and America, there is great admiration for the way we carried through that great military feat.

We heard the announcement the other evening on the wireless about the prefabricated invasion ports, with which I was previously familiar, owing to the fact that some of my friends were engaged on them. That work was a real tribute to the thinking that had taken place. It showed that the men responsible had thought big, planned big and built big. That is the way we must approach our post-war problems. This prefabrication of the invasion ports was a magnificent example of British public enterprise and was the result of the maximum co-operation between the big men employed in the National Physical Laboratory, the War Office, the Ministry of Supply, the Ministry of Transport, and the Royal Navy. I hope that we shall learn the lessons of that feat, and cut out the petty quibblings and our rather haphazard approach to legislation, which has always in the main been based upon expediency. We should learn the lesson of the magnificent contribution that Britain has made towards winning the battle for world freedom.

Hon. Members have been making a series of suggestions for the setting up of new Ministries—even those who belong to various organisations supposed to be against the growth of bureaucracy. We find on the Order Paper, and in their public speeches, suggestions for the creation of further Government Departments. Let me make one point quite clear. Speaking for the party and the movement to which I belong, I say that we will join with anyone in the elimination of bureaucracy, wherever it is to be found. No-one has suffered more in the past from bureaucracy than those who have had to apply for public assistance and for benefits of various kinds and when other hon. Members talk about bureaucracy we will join with them. We consider that the time has arrived when the Government should review some of these war-time Ministries and see whether we are getting the best results for our expenditure. I would like the Government to give special consideration to one aspect of the matter, although I do not expect immediate action. We set up the Ministry of Supply, the Ministry of Aircraft Production and the Ministry of Production. Has not the time arrived or will it not have arrived soon after the termination of hostilities when those Ministries should be merged into a Ministry of Economic Development and Resources? I see there is a proposal to hand over these important responsibilities to the Board of Trade, but I think the Board already have their hands full. If we are to approach post-war economic development in the way that we have dealt with our war problems, those matters should not be put into the hands of the Board of Trade, but entrusted to a new Ministry of Economic Development and Resources and that new Ministry should be given an adequate general economic staff, to plan our economic development.

I see, by the Government's White Paper on full employment, that steps are being taken in that direction, but, unfortunately, the Government seem to approach the problem in too narrow and too small a way. For example, they talk about a small staff to prepare statistics, and to look forward, with a view to directing and advising the Government. I come from big-scale industry, and I will never forget how certain people used to be critical because it was necessary to have a large staff. In modern life, if we are to plan and work efficiently, we must have adequate staff. That is the direction from which we ought to be considering this problem. I find on the Table in the Library of the House of Commons seven reports issued by the National Resources Planning Board of the United States. We have a great deal to learn and to profit by from reading those reports. The Government should be considering action of some kind along those lines. We all have great regard for the achievements of the Soviet Union, but too many people fail to remember that military achievements could never have been carried out, had it not been for the industrial development that took place, upon the Five Year Plan. If we are to approach our problems in the way that the United States and Russia have done, we have to determine our policy upon a similar basis. Whatever happens, I hope that the Committee will not stand for going back to the 1939 conceptions of life.

11.30 a.m.

Here is an example of what we could do in this country if we were so minded. I have here a book the reading of which made me remember what we went through between the two wars. I thought of what we have achieved in this war. When I look at these photographs of what has been done in the United States and remember our prefabricated ports, I realise the kind of development that could have taken place, if we had not been held back. Here are a number of chapter-headings which indicate what I mean. "River is made to work for the people." "New life from the land." "The people's dividend." "A new way with an old task." "The unity of land, water and milk." "A common purpose." "For the people, and by the people." "The release of human energies." "Regional pillars of decentralisation." "It can be done." And then I read about John Winant, that great public-spirited man. He said: In spite of the fact that private enterprise had never envisaged this project nor was implemented to carry it through, vested interests in the United States fought it with a bitterness that has seldom been equalled in any country.

The Deputy-Chairman

I am afraid that what happens in the United States or Russia must be regarded as outside the scope of this Vote, except for the matter that we may have given them actual help with our money or goods.

Mr. Smith

The White Paper on the Vote of Credit refers to services essential to the life of the community. I am giving a concrete example of what has been done when we have been working in this country in unity with the United Nations. I am giving a concrete example of how we should apply this expenditure to prepare and build—

The Deputy-Chairman

I am sorry to interrupt again, but the hon. Gentleman has already given a very long list relating to one country, and I suggest that he should return to his main argument.

Viscount Hinchingbrooke (Dorset, Southern)

Before the hon. Member leaves that point, will he briefly tell the Committee what is the book to which he has been referring?

Mr. Smith

The book is about the Tennessee Valley Authority. It has been published in several forms. It is in the Library, and is well worth reading.

Mr. Reakes (Wallasey)

The hon. Member was also, I gather, referring to a speech made at Wallasey, in my constituency, a fortnight ago to-day, by the American Ambassador.

Mr. Smith

The point I was making, Mr. Williams, was that when we carry out the policy contained in the White Paper, it is along those lines that we ought to be thinking. It is five months since the White Paper on full employment was published, and, in our view, the time has arrived when we ought to get more information on how that White Paper is to be applied. In July this year we had a Debate upon surplus Government stores, and plans for their disposal, and we found, according to the Press of 11th October, 1944, that Sir Philip Warter—and let me make it clear that I am not speaking critically of the Civil Service, because I do not believe in doing that; I believe in speaking critically only when men have an opportunity to reply—made a statement that, in my view, should have been made in this House, by a responsible Minister. Could we be told more about that to-day, and could we be given more examples of how the policy outlined by Sir Philip Warter is to be applied? The President of the Board of Trade informed us he had been in touch with Dominion and Colonial representatives.

Captain Prescott (Darwen)

Could the hon. Member tell us what was this statement to which he refers?

Mr. Smith

It was something like this, if I recollect aright. He was outlining the Government's proposals for dealing with national factories, and also those factories which have been subsidised by the Government, such as shadow factories. He said that firms should be applying to the Board of Trade in order that they could, after the war, or when necessary, change over from war-time to peacetime production. His statement revolved round those main principles. The President of the Board of Trade said in that Debate that he was in touch with Dominion and Colonial representatives. I think the time has arrived when we should be told by the President some of the results of those consultations.

Mr. Dalton

Will my hon. Friend give the quotation to which he refers?

Mr. Smith

I have not HANSARD with me, but it was the Debate that took place on this White Paper in July. We have had the full employment policy published, but I do not see how that can be implemented fully unless we allow full development to take place in the countries for which we are responsible. Many Debates have been devoted to the position in India and a great responsibility rests on every one of us in that connection. I am therefore hoping that the Government will give consideration to that matter.

During the war the Board of Trade have carried out what in my view has been a very successful policy, namely, the provision and organising of utility goods. This has had great economic value. It has helped to avoid inflation, and it has been a contribution to the welfare of the people. The people recognise that in the main they have got good value, that in regard to most commodities indeed they have had better value than they have ever had in the past. It has been a contribution to the stabilisation of prices. If this is good in war it is also good in peace, and if we are to avoid that inflation, of which some of us live in dread because of the experience we had in the Army of Occupation after the last war, I think a certain amount of this policy should be carried on after the war, in order that we can provide our people, especially the young people when they come home, with furniture and household utensils of good quality, at minimum prices. Have the Government considered setting up a Government public utility company in order to carry out in peace time what we have so successfully done in war-time?

The Government are giving consideration to the serious problem of housing. These houses will have to be provided with furniture, and I hope the people who need this furniture will not be subject to what my generation was subject to after the last war. People want guaranteed supplies of the best quality and the best value, and they ought to get the benefit of mass production, instead of those who run chain stores and places of that kind. It is unhealthy that chain stores merely by handing commodities over a counter, and having little responsibility in production, should be able to pay dividends of from 20 to 50 per cent., while people in industry with great responsibilities, whether managerial or administrative, or engaged in manual work, can pay a dividend of only six, eight or ten per cent. at the very most. If we are to have a healthy economy after the war the Government should give consideration to that question.

As far as we are concerned we are very optimistic with regard to Britain's future, if the problems are approached in the way in which war questions have been approached. I see that Dean Inge has made several statements, supported by pre-war appeasers, who are now very pessimistic, that we shall be poor after the war. No one is readier to say that we shall be poorer after the war than I am. We shall be poorer in the loss of many of the most noble sons of this country. We all have responsibility towards them. They have not fought for a little England or with a narrow outlook. They have fought with a world outlook, fighting the world battle for freedom. It is in that way we ought to approach our problems. Having said that we shall be poorer to that extent, I say that in another sense after this war Britain should be richer than ever. Our man-power was never better organised than it is at the present time. Our industrial capacity was never greater than it is at the present time. The skill of our people was never more developed than it is. In all parts of the world it is admitted that the British people are more highly-skilled and developed than the people in any other part of the world. We shall be richer in experience. Therefore the accumulated assets of this kind, provided we are worthy of them, can make Britain greater than ever.

In 1939 I found that the stock of the British people was lower than it had ever been in our history. We had sunk to the lowest possible depths. Now, the stock of the British people is higher than ever it has been in our history, because throughout the world there is a realisation of what is owed to Britain for the period when we stood alone for 12 months, and held at bay the mightiest military machine that had ever been built. It was a tremendous strain but we were able to do it. Our stock is higher than ever it was, as our responsibility is greater. We, on this side, are prepared to accept responsibility when the people give us the power. We intend to work and fight for that power. If Britain maintains that new standing throughout the world, we ought not to be poorer, as the pessimists are saying, but richer than ever we have been in British history.

In conclusion I would remind the Committee that a Polish General recently telegraphed, under great difficulties, from Poland, to the Polish Government in Britain saying, "My men are demanding Socialism and the nationalisation of the land." The same thing is happening in Belgium. We find that General de Gaulle is making speeches of a similar tone. France, Belgium and Poland are being liberated as the result of the great sacrifices of our people. Countries in Europe which, as the result of liberation by our men, are being freed from those economic forces that have wrought such havoc in the past. I believe we shall win complete and overwhelming military victory. But that will not be enough for British democracy. We have voted millions and millions during this war, without any quibbling from these Benches. We say that, while we are going to secure overwhelming military victory, we also want liberation from the economic forces that give rise to poverty, Fascism, and war.

11.45 a.m.

Lieut.-Commander Gurney Braithwaite (Holderness)

I think that no more striking comment could be made on the times in which we are living than the fact that my right hon. Friend is going to get this Vote of £1,250,000,000 after a comparatively short Debate and with very much greater ease than £1,000,000 Was obtained in happier times. I think the time has come to remind hon. Members that the primary function of the House of Commons remains the scrutiny of expenditure. I know that we have come in these times to read and talk and think of millions with such facility, that the noughts at the end have come to mean little or nothing—so little that they were referred to once by a right hon. Gentleman opposite as "meaningless symbols." But may I give hon. Members a measuring rod to use next time they are discussing millions of pounds, or millions of tons, or millions of anything else? The war has now lasted nearly five years and two months—I do not know what other Members feel, but to me it seems a mighty sight longer since that Sunday when it all began. Do hon. Members realise that the war has lasted not quite 2,750,000 minutes? Any hon. Member who does not believe me can perhaps accept that as a little homework during the week-end, It is a solemn fact that this long and exhausting war has not yet lasted 2,750,000 minutes; yet that in some 20 minutes' time we are going to vote £1,250,000,000, and every day the war lasts we are going to spend another £14,000,000.

I do not want to contradict myself— and I do not think I am doing so—but, having said that we ought to scrutinise our expenditure, I welcome one item today. I am one of those who have harassed and criticised the Government on the question of Service pay. I would support the hon. Member for Stoke (Mr. E. Smith) by saying how much I welcome the fact that, at long last, these rates of Service pay have reached a level at which they are not—as they were—a disgrace to this House of Commons. It is some little consolation to me, as one who took part in the revolt against the Government on the subject in March, when the Government arrived at the winning post in a bruised and bleeding condition, by a majority of 23. [Interruption.]—I do not think that is a mixed metaphor: it is quite possible to arrive at the winning post in a bruised and bleeding condition. I was saying that it is some consolation to those of us who voted in the other Lobby, and who were told that such a step would lead to inflation, to find that it is now an accomplished fact; and that the country is no worse off, but, in fact, very much happier as a result.

That brings me to my chief point. I believe that we can discriminate. The hon. Member for Stoke made much the same point. It is quite possible to support a Vote of Credit, and yet to discriminate to this extent. I believe that hon. Members in this House, like their constituents who have to find the money, do not grudge a single penny that is necessary for the waging of this war to a successful issue. But the time has come when we Should grudge—and say so— every penny voted for interference with the waging of the war. A great deal of this Vote, I am afraid, will go in that direction. We are voting to-day not only for shot and shell, and pay for the fighting men, but for a multiplicity of Ministries and officials, who are jostling and jumbling one another to the detriment of the prosecution of the war. Action and administration are hamstrung over and over again by departmental overlapping. I was going to say that the Government's left hand does not know what their right hand is doing, but that would be an oversimplification: the first finger of their right hand does not know what the second finger of their right hand is doing.

Mr. Bowles (Nuneaton)

Their left wing does not know what their right wing is doing.

Lieut.-Commander Braithwaite

That may be true; but I do not want to revive yesterday's Debate. When we are voting a war credit, it would be a pity to allow party controversy to spring up again. I hope that I can carry hon. Members opposite with me when I say this: It takes a clever man in this House, when dealing with certain problems of his constituents, to hit the target first time, and find out the right Department to approach. It is a grandiose game of finding-the-lady. If hon. Members have a housing problem, affecting their constituents, how many have got hopelessly lost in the maze of the Ministries of Health, Town and Country Planning, and Works? I have never yet approached the right Minister at the first attempt. I have always got passed on to somebody else.

May I say how delighted I was to hear the hon. Gentleman opposite, with whom I have crossed swords before, deal with the subject which is my next note? He said for me what I want to say about the Ministries of Production and Supply and Aircraft Production. Surely, the time has come when we could have a merger of these Departments. What a labyrinth it is. Only the other day a carpenter in my constituency, with quite a small business, was given the job of repairing the black- out in a military base hospital. To do that, he had to get some timber some 200 yards down the road. It has taken some three months' correspondence to have that done. The Ministry of Health and the Ministry of Supply played pingpong with that matter, with the War Office intervening, as they say in the divorce courts, before it could be done.

May I give another example? I see opposite the hon. Lady the Member for Wallsend (Miss Ward). Last Friday, on the Adjournment Motion, she raised a matter which brought two Ministers down to the Front Bench. It was a question of an ex-Service man getting permission to drive a taxi somewhere in the Newcastle area. Apparently, the Minister of Labour and the Minister of Fuel and Power have been having a grand time over that. There was no decision and no satisfaction. Then there was the matter the other day of the disgraceful incident, as I call it, of the occupation of houses, which should be occupied by bombed-out Londoners, by Italian prisoners. I like to call them by their right name and not call them collaborators, because they are men who have been taken in the attempt to slaughter our own kith and kin. That was due to a hopeless muddle between various officials and Ministers. I believe it was eventually pinned on to the unhappy Ministry of Works, whose Parliamentary Secretary must have been delighted when the Question was not reached at Question time. Otherwise the OFFICIAL REPORT would have shown him bombarded with supplementaries.

When we have correspondence with Government Departments — and our letters get priority, do not forget—how long does it take to get replies to simple questions? I never do better than a month. I hope other hon. Members do better than that. What is the position of the ordinary factory manager, or anybody concerned with getting on with the war effort? Never was the Circumlocution Office, so admirably described by Charles Dickens, so active as it is to-day. Never were the Tite Barnacles more firmly fixed in position than now, and that is a sort of thing that is by no means confined to Civil Service temporary officials. It is rife in the Armed Forces. Plenty of people wearing uniform are engaged in the same thing.

Last week, I came across a couple of Commanders, R.N., doing work which could easily have been done by one of them. For two years now, these two gentlemen have been enjoying themselves. One likes golf and the other likes American films and each takes every other day, knocking off at lunch time. They are drawing the full pay of their rank plus 25 per cent.

Mr. James Griffiths (Llanelly)

Absenteeism.

Lieut.-Commander Braithwaite

Yes, but absenteeism with the approval of those who are in charge of them. I could not agree with the hon. Gentleman more. I agree with the miners and everybody else being asked to put forth greater efforts, but, when one comes across that sort of thing—and I think other hon. Members of the Committee have had experiences similar to my own—surely one must realise why this war has lasted five years, and why the Income Tax is 10s. in the £. Officialdom is perched, like a fearful Old Man of the Sea, on the shoulders of our export trade. I am not going to follow the hon. Member opposite into the post-war picture further than to say that officialdom is, at this moment, handicapping our export trade.

There are other consequences of unnecessary expenditure which I should like to mention, and which do not affect the big industrialists. Hon. Members opposite are inclined to get impatient sometimes when speeches are made on the problems of the great industrialists. Well, it is not about them I want to talk, but about the consequences of unnecessary expenditure upon the workers—War Savings Certificates. The Chancellor has said, over and over again, that it is his intentio to see that savings, when they are cashed, have the same purchasing value, or as near to it as he can make it, as the money had when it was lent to the Government. A very worthy objective. What is the chance of that happening? Every day the war goes on, we are piling up a debt service to meet the interest and sinking fund charges on these Savings Certificates. Does not that place upon the shoulders of every hon. Member the gravest responsibility to see that every penny we have is spent on something that is going to produce in order to bring us nearer victory? Pay-as-you-earn Income Tax is now working, as far as I can make out, smoothly, among the workers in the factories. I have not heard a word of complaint, and I have done a three months' tour for the Admiralty. The workers accept the situation; they realise that they have to pay their "whack," but for how long are they going to be patient under what is after all; a very heavy burden, when they realise that an enormous amount of the taxation which is taken from their wages is not being spent on the waging of the war at all? It is being spent to maintain in position a great many people who are redundant, and that goes for those in uniform, and out of it. To get promotion, you have got to get around you a sufficiently impressive establishment of people, and, if you do, you get promotion and your second-in-command goes up at the same time. That happens right through the whole Government organisation.

12 noon.

The tentacles of the State-control octopus are already gripping the workers in the factories. We are now facing, or appear to be facing, yet another winter of war. Six months from now, as I calculate it—and I have no Treasury officials to help me—the interest and sinking fund charges on our debt services will have reached an annual figure almost exactly the same as our total Budget expenditure in 1935—about £700,000,000. That is merely to finance the loan, and that brings me to the last point I wish to make. The hon. Gentleman opposite spoke of hyper-pessimists. I do not know whether my hon. Friend includes me in that category or not, but I think there is something worse than even hyper-pessimism or full-blooded pessimism. I think there is something very much worse. I think that to raise hopes, in the minds of the men who are fighting, that are not going to be fulfilled is infinitely worse than making pessimistic speeches. Pessimism is not a crime, if it is true, any more than is wishful thinking.

Mr. Ellis Smith

Before my hon. and gallant Friend leaves that point, would he allow me to say that one who has been brought up in industry, and has come through what we have come through between the two wars, makes a realistic approach and not a pessimistic approach?

Lieut.-Commander Braithwaite

I could not quarrel with that. I have been, like my hon. Friend, in two wars, and I know exactly what he means. But I think he will agree with this. After the last war, the men came back to a land of unfulfilled promises. How much better if those promises had never been made! "Homes for heroes" is not a slogan which any of us would condemn. "Homes for heroes" is a magnificent objective. All that went wrong was that the heroes did not get the homes. I never blamed the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) for saying that that was his object. He was voicing the views of everybody in the country at the time. With every day that passes, with the war debt piling up at the rate of £14,000,000 a day and with the cost of its service, we are jeopardising the prospect of a sound scheme of social security when all is over. With every day that passes, we pile up our National Debt higher. I favour the Government's objective of a sound scheme of social insurance. I am not going to impinge on the subject of the Debate which is to take place in a fortnight's time, but I do say that all of us, who believe in it, should be firmly behind the country in the demand for the most rigid cutting down of waste in the fighting Forces and in the Government Departments.

I know that I am speaking to the converted on the Front Bench. In fact I would commend to Members of the Committee who have not yet read it, the wise speech made by the Financial Secretary to the Treasury on the Motion for the Adjournment on 29th September—not all the speeches from the Front Bench are worth reading, but this one is—in which he said that when people said the Treasury should find the money for this or that, they really meant the taxpayer. And the taxpayer is everybody in the country who pays taxes, directly or indirectly. It is so easy to say that the State should find the money for this or that. Yesterday, during a heated discussion on the Town and Country Planning Bill, the hon. Member for Walsall (Sir G. Schuster), in an extremely able speech, made a suggestion to bridge the gap between the two sides but I was disheartened to hear him say that the cost should be met by the Central Exchequer. That is the quintessence of self-deception. We are all taxpayers. We are the guardians in this Committee of every taxpayer, and I suggest a motto for all of us in the country, whether we sit in this House, work in factories or serve in the Forces, to take unto ourselves, the slogan of an extremely egotistical French king. I think it was Louis XIV. Whoever it was, he had an exaggerated idea of his own importance. He was a budding totalitarian, who said "L' é tat c'est moi"—"I am the State," or "The State is me." Surely we could adopt that very excellent slogan when we are considering expenditure, because the taxpayer is the State, and the State is the taxpayer.

Mr. Lipson (Cheltenham)

We have had a quotation from a French king and perhaps I may give another, in view of the fact that we are discussing expenditure and waste. Another French king once said—I will quote it in English—"After me, the flood." When we are considering vast sums of expenditure we might bear that in mind. The hon. Member for Stoke-on-Trent (Mr. E. Smith) told us that after the war, this country will be richer than ever it has been before. I hope that he is right. Only the future can show. I suggest that what he meant was that we shall be potentially richer, if we make better use of our natural resources than we did before. We are concerned now with the present. We have to remember to-day when we are asked to vote another £1,250,000,000 of credit, that in this war already we have spent all our overseas investments, that we have also very largely mortgaged our future, and therefore the need for very careful examination of our expenditure is vital.

My hon Friend said he had faith that the Chancellor would see that the money that was being voted would be wisely and economically spent. I hope he is right, but the public would like a little more evidence upon which to build that faith. We have been given some examples in the very witty and able speech of the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) that there is still a good deal of wasteful expenditure going on. It may, perhaps, be in small matters, but it is our duty to those who are providing the money, and those who want our financial future to be as sound as it can be made, to see that no wasteful expenditure occurs.

Therefore, I would ask the Financial Secretary to the Treasury, when he replies, if he can give us a little more information. Will he tell us what has been the financial cost of the war to this country so far? We ought continually to be reminded what the war is costing, and not only the Committee, but the country also ought to realise—we cannot too often have it brought home to us— what an expensive business the folly of war really is, and the fact that, for wars, the public in every country, must accept some measure of responsibility. These figures should bring it home to people that, economically, it would be much wiser to take whatever measures they can to prevent future wars and to show an active interest in such measures when they are taken.

We have been reminded that the increase in war expenditure in the last few weeks has been due to the operations which have been taking place overseas. It is only fitting that somebody should say that our fighting men are making very good use of the materials which have been supplied to them as a result of the expenditure voted by Parliament. If there are, however, some forms of war expenditure that must, inevitably, increase for operational reasons, there are others which one would expect, at this stage of the war, to begin to run down. The plea has been made that certain war-time Ministries might either be closed down or merged. I am not able to say whether that is practicable or possible, but I am on perfectly safe ground in saying that there are certainly some Ministries where a good deal of pruning could take place. I would like the Financial Secretary to tell us what the Treasury is doing to effect such pruning. What steps has it taken to bring home to certain Ministries that the war has reached a new stage, and that in view of that fact their commitments ought to be considerably revised and reviewed?

The public would be relieved if they knew that the Treasury was active in this matter. The public regard the Chancellor of the Exchequer as the watchdog of the public purse and it is only right he should do everything he can to fortify them in that conviction. It is impossible for Parliament to scrutinise all the details of expenditure, but they want an assurance, from time to time, that certain steps are being taken, that certain sound financial principles are being followed, and that it is not being taken as a matter of course that we should go on voting and spending these very large sums of money, without deciding whether they are necessary. Those of us who want to see a better Britain after the war realise that it is going to be extremely difficult to secure it, if wasteful expenditure is allowed now. We shall have it thrown at us as a reason why expenditure which we think legitimate cannot be made, that we have been pursuing a rake's progress and are not financially able to do it.

12.15 p.m.

I think that the whole Committee was pleased that the hon. Member for Stoke paid a tribute to the part the British people have played in this war. I would like to ask the Financial Secretary to the Treasury if he can assure us that the financial burdens which have fallen on the British people as their share of the war are not greater than they might reasonably be expected to be. Huge as are the sums which we in this country have had to spend on this war we are well aware that but for Lend-Lease we should be spending very much more. I hope that hon. Members will remember this when at times they get up in this House to criticise certain aspects of America's economic policy so far as it affects us. We are under a very great debt to the United States, a great debt financially as well as a great debt in other ways, and we ought to remember that and not just forget it or take what they have done to help us for granted. I hope we shall be much more generous in our consideration of the policies which America is pursuing, and not indulge in what, if I may say so, is not only somewhat carping criticism but very short-sighted criticism, in view of the necessity for the closest economic and political co-operation between our countries after the war. We shall never get that political unity which is essential for the maintenance of peace after the war if we are going to pursue an economic war with the United States.

Mr. Boothby (Aberdeen and Kincardine, Eastern)

Does not my hon. Friend think that the United States are also under some obligation to us?

Mr. Lipson

Of course I do, and I think that the great majority of the people of the United States recognise that, but it is not for me to remind them of it. I am concerned only with the attitude which should be taken by this House, which carries a tremendous weight in the United States and indeed throughout the world, in its approach to what appear to be differences of view between the two countries. To come to the point I wish to make regarding the relieving of the economic burden upon this country, I would therefore ask whether Lend-Lease might not, even at this stage of the war, be more widely extended. We owe a great deal to the United States of America, and I think it is to her credit that she has adopted this policy of Lend-Lease, but I think I am right in saying that Lend-Lease does not apply between India, our Dominions and ourselves. This is a common struggle. The defence of India is our concern but is also India's concern, and I believe that we in this country have incurred in respect of that defence an expenditure which is out of proportion to what we might reasonably have been expected to bear, and I ask the Chancellor whether it is too late to see that our financial relations with India and with our Dominions are placed on at least as generous a footing, in as fair a position, as they are with the United States of America and that Lend-Lease should be extended between them and us.

I join with other Members of the Committee in saying that I would gladly vote whatever is necessary for the prosecution of the war, but I think I am only doing what I conceive to be my duty to those whom I represent in insisting that there should be the closest scrutiny of that expenditure. I do not want to pursue the question which has been raised of the advisability of raising in the people hopes for after the war which cannot be realised. We were told by the hon. and gallant Member for Holderness that it would have been better if those promises at the end of the last war had never been made. That seems to be a new variation of the theme that it is better to have loved and lost than never to have loved at all. Personally I have great faith in the value of hope as a stimulant to endeavour, and I trust we shall have learned this lesson, too, from the failure last time—that those promises were rightly made, but that what was wrong was that they were not carried out, and that we shall avoid making the same mistake this time.

The President of the Board of Trade (Mr. Dalton)

It might be for the convenience of the Committee if I intervened at this stage to reply to some of the points of my hon. Friend the Member for Stoke (Mr. E. Smith), in particular, before the Debate moves on to other subjects for which other Ministers are responsible. I welcome my hon. Friend's speech and I hope that he is now quite recovered. I know that he has not been very well. When I was in Manchester the other day I heard that he was then in bed and we are glad to see him here to-day.

Mr. Bowles

The same to you.

Mr. Dalton

I do not think that my hon. Friend was here when we had the Debate upon Welsh affairs the other day, but evidently he has read the account of that Debate. Some of the questions which he asked me to-day I sought to answer briefly on that occasion, but I will say something more on the subject now. I answered those questions then in a Welsh setting. He has put them in the broader setting of to-day's Debate. My hon. Friend, in a personal reminiscence, said something about the views that I held on certain matters before the war. I was very glad that I held those views about not being prepared for the tragedy which burst upon us, and I was glad to have the support of my stalwart friend, who was always a realist on disarmament.

Mr. Rhys Davies (Westhoughton)

What about all these bouquets?

Mr. Dalton

My hon. Friend was not always so stalwart in support of that view. After these bouquets, as my hon. Friend calls them, I would like to give a brief explanation of the way in which planning is proceeding from day to day and week to week in relation to what is called the "switchover." My hon. Friend said that it was time that we made plans about this and I should like to give some illustrations of the way things are going, the way in which the plan is being worked out and implemented from day to day in consultation between the Departments concerned. My right hon. Friend the Minister of Labour is very deeply concerned with these matters, and I am in constant touch with him and with my right hon. Friend the Minister of Produc- tion, who also occupies a very central place in regard to the switchover from war work to peace work. Ministers are constantly in touch, and, in addition, our officials are constantly in communication over the details of these matters. They are not only in touch here in London but regionally. In all the regions there are representatives of the principal Departments, and a great deal of this planning work is done in the regions among the regional officers concerned.

From my own point of view I have two principal concerns. One is that the civilian population shall, as soon as possible, get larger supplies of necessary goods. I only wish that I could take steps to increase those supplies very much more quickly than is possible. The reason why it is not possible to do so is extremely simple. It is because it is the deliberate policy of the Government, with the support of this House, to make in 1944 the maximum impact upon the enemy and to go all out to win the war, if not this year then as soon as we can next year. If our people are engaged upon war work they cannot be doing all the things which, from the point of view of the Board of Trade and the point of view of the House, we would like them to do—to increase supplies of pots and pans or bedding or clothing or other necessities of civilian life. But I constantly keep in front of my right hon. Friends, and in particular, the Ministers of Labour and Production, the various needs of the civilian population, and also the importance of reviving our exports as soon as possible. But vital as the export trade is, it is no good saying to the civilian population, "All the alleviations we can get by switching over from war to peace work have to go in providing exports, while you are still struggling with your present rations of clothing, furniture, pots and pans and the like." It is a necessary condition for getting an export drive that we should give the civilians a bit of a lift-up, so that they may realise that something is coming to them right now and not in the sweet by and by. Subject to that the export drive comes before anything else in the economic field so far as our post-war prosperity is concerned.

My right hon. Friend the Minister of Production, for example, will ascertain that in some industrial areas some capacity can be released owing to a reduction of war contracts. I have put before my two right hon. Friends and any others whom it may concern, a list of the requirements of the civilian population. These are very simple; the Committee would be able to compose a list for me. They principally relate to the supply of clothing, footwear, household textiles, including sheets and blankets, furniture— and so it goes down a list which is fairly obvious to any hon. Member. Whenever there is a release of workers from war production we always consider how far the requirements of the civil population can be assisted by a transfer of labour or by the switchover of some particular factory or plant from war to peace work.

I will give an illustration from a, subject to which reference was made in the House last week. I gave an answer to a Question in which I explained that, owing to the policy of making the maximum impact upon the enemy this year large numbers of workers from the clothing industry had been taken into the Armed Forces and some into munitions, and that, in addition, the Ministry of Supply were going forward, as the House would wish, with the provision of suitable clothing for demobilised men, and that this had meant considerable pressure upon the resources of the clothing industry. I also said that I had strongly represented to my colleagues that they should give a very high priority indeed in returning workers to civilian production to clothing workers, particularly skilled workers, who would be of immediate value in stepping up production in the clothing factories. I am glad to say that I have had a very good response from my right hon. Friends. Some transfers are taking place at the present time, and in certain areas of special importance to the clothing industry particular attention is being given to this matter. I mention that as one illustration of many which I could give that this work of planning is going forward from day to day, and that it is not something which will need to be started in some elaborate fashion in the future. I hope that we shall see good results from it, as the war situation permits, in the gradual re-allocation of resources, which are now devoted directly to the war effort, to the benefit of the civilian population, and, as soon as the goods required for the civilian population have been built up to a reason- ably high level, to an all-out development of our external trade.

12.30 p.m.

My hon. Friend spoke also of the disposal of factories and referred to a statement in the Press by Sir Philip Warter. That statement was made with my authority. He is a member of my staff and is an exceedingly able public servant. He was a business man in time of peace, but that does not make him any less good a public servant in time of war. He is my Controller General of Factory and Storage Premises and is an outstanding man. He has had a lot of ungrateful work to do in acquiring premises from different people in order to meet the requirements of the Departments that want space for war production and storage. He has done the work extremely well.

The statement he made with my authority was not a statement of new principles. My hon. Friend suggested that it should have been made in the House but, in fact, the speech of my own on 25th July, to which my hon. Friend referred, covered the same ground, and all the main points in the statement made by Sir Philip Warter were made by me several months ago. But he was able to add a few minor details which have since been agreed and which, quite frankly, I do not think would have been worth a special statement in the House. Hon. Members might have resented my seeking, for example after Questions, to make a further statement on this, because there was nothing new in it beyond what has been said several times before by me, except that with regard to the leasing of these factories the Valuation Office of the Inland Revenue will be brought in to fix an initial rent on a 1939 basis, and that, within three or five years, that will be reviewed in the light of the current values, and so on. That kind of detail might usefully be known by those who are interested in these factories, but it does not add materially to what I have said previously.

I do not think my hon. Friend would wish me to go over that ground again. I will merely repeat very briefly that much attention has been given to this matter, and the final decision of the Government is that these Government factories are not, except in very exceptional cases, to be sold. They are to be retained; the Government will remain the owner of the factory, and will be the landlord in relation to whoever may be the tenant. When these factories are not required any further for the production of munitions or, for any other Government purpose, they will be allocated not in accordance with any competitive bidding for rent but in accordance with the contribution that can be made to employment in the area where the factory is situated, having regard, in particular, to the need for a diversified and balanced industry. A preference would be given, therefore, other things being equal, to someone bringing a new industry into an area rather than merely wishing to add one more unit to an existing industry. Account would also be taken of the importance of the industry from the point of view of the export trade. Regard would be had to war potential in the future; that is to say, in some cases consideration would have to be given to whether an arrangement could be made which would permit, if need should arise, of the switching back of the factory without undue difficulty to munitions production. Regard would be paid to certain other considerations, such as getting a quick start with peace production and giving preference, again other things being equal, to an applicant who was able to get on with the production that was desired to be carried on in the factory without a long process of structural changes and semi-rebuilding which would take time.

Sir Adam Maitland (Faversham)

Does that mean that before a factory coming out of war production can be let to a prospective occupier who is prepared to employ people, all these considerations have to be borne in mind? If so, it seems to be that, however good that may be as a long-term policy, obstacles are being put in the way of people immediately taking advantage of the fact that the factory is no longer used for war time purposes and can be devoted to peace time purposes.

Mr. Dalton

I am glad my hon. Friend has raised that point because I think I can dispose of his apprehensions. These are matters which have to be borne in mind in determining who, among a number of applicants, should be given the use of the factory, but it does not take very long to bear them in mind. If I may say so again, these considerations have been in our mind for a long time. They are all very familiar to us and have been set out frequently. As soon as a particular factory is declared by the Supply Department concerned to be no longer required—and very often this can be said in advance of the time when actual war production stops; indeed, I am urging my right hon. Friends at the Supply Departments to let me have as early notice as possible of factories which are no longer to be needed beyond a certain time for war production—we survey the list of applicants for that factory or for similar factories, and it is not difficult to make a choice between them.

I would like to make it clear that there is nothing new about this. As long ago as November of last year an invitation was given to industrialists to send in applications to the Board of Trade, if they were interested in any particular Government factory for peace-time purposes or in a general class of factory, and we have since had a very large number of applications. As I said to my hon. Friend the Member for Llanelly (Mr. James Griffiths) last Tuesday in the Welsh Debate, there will be no difficulty in finding good tenants for these factories. Very often it will be the person who has been doing war work in that factory. It will often be most convenient to allow him to switch over to peace work in the premises in which he is now working and to employ in many cases, a considerable proportion of the same staff.

Earl Winterton (Horsham and Worthing)

I am sorry to interrupt, but this is a rather important point. A lot of these factories are on what was formerly extremely good agricultural land. As my right hon. Friend will be aware, in many cases, for certain reasons, a large area of land round these factories is withheld from agricultural production. If these factories are being held for disposal under the circumstances he mentioned, for perhaps a year or so, will he consider handing the land over temporarily to the War Agricultural Committee so that there may be a short-term policy for production of food, and thus avoid the feeling in many country districts that good land is not being used?

Mr. Dalton

I should have to consider that point with my right hon. Fried the Minister of Agriculture, who is never backward in putting claims on behalf of the cultivation of land. It may very likely be possible in certain cases. For my own part I would have no objection whatever to that. I am only concerned to see that there is the least possible gap in the changeover from war production to peace production, and that all our administrative and other arrangements are made in advance so as to get quick decisions in order to minimise the gap and to ensure that the work undertaken in the factories is suitable in the national interest in the light of the various criteria I have given—in particular that it affords as much employment as possible of the right type, having regard to the area where the factory is situated, and that the products made are such that they will have high utility, whether for the home market or for export trade.

Mr. A. Bevan (Ebbw Vale)

My right hon. Friend is making a statement of very considerable interest and it is perhaps unfortunate that a statement on that subject—which I agree is not new, but nevertheless puts emphasis upon different aspects of the matter—should be made on a Friday when there is such very poor attendance. May I ask, if his plans are so far advanced as they apparently are, and it is very agreeable to hear that, why it is that discharges are taking place on such a scale? The point has been made in the House—indeed I think it is a part of the demobilisation plans—that men ought not to be released too hastily from the Forces in advance of the capacity to absorb them into civil employment. Ought that not to apply in the same way to people who are in employment on munition works, and so on? Great civil disturbance is being created now by discharges on a large scale, and a very angry feeling is being aroused in some parts of the country, particularly on account of the huge difference between the rates of wages and the unemployment benefit which they receive when they are discharged.

Mr. Dalton

I quite appreciate my hon. Friend's point. I think he will agree with me, however, that it is a very difficult problem. We all want the maximum production of munitions in order to beat the enemy; on the other hand, we do not want to go on piling up munitions just to keep people in work. What we must seek to do is to get a rapid switchover from war production to peace production as soon as the war programme permits. As to when the war programme will permit, that, of course, is the primary responsibility of the Supply Ministers, my right hon. Friend the Minister of Production, the Ministers of Supply and Aircraft Production and the First Lord of the Admiralty. It would be very wrong for me to have a view on that. It is a skilled and very technical matter. All I am entitled to say, and this I have already told the Committee, is that I am doing my utmost to secure that, when the labour becomes available, or when premises become available in whole or in part, then as quickly as possible this labour and these premises will be transferred to peace-time employment of a suitable character, whether for the home market or for export trade. Beyond that it is very difficult for me to go. But I will do my utmost to help to minimise the evil consequences of the switchover, which is bound, in any event, to be a troublesome process.

I hope that I have said enough on the question of the disposal of factories. I am very optimistic that we shall get a very substantial addition, when the war is over and we return to our peace time life, to the up-to-date economic equipment of the country. A number of these factories are as modern and as light and as good in every way as any factories in the world. They are models of construction, and I look forward to seeing these used after victory for carrying forward the task of supplying the needs both of our own people and of customers beyond the seas with whom we may be engaged in trade. I shall seek, so long as I have responsibility in this matter, to secure that we get good tenants who will make good use of these factories. I repeat that they will be tenants of the Government in the great majority of cases, and I hope that the arrangement will work out harmoniously. It is perhaps not a bad compromise, arrived at by a Government containing members of a number of different parties, that the thing should be approached from that basis. Other views, both to the one side and to the other side, have, of course, been ventilated in Debate, but we have chosen a course which will, I think, commend itself to the majority as being a commonsense and practical one at the present time. I want to turn to another matter which my hon. Friend mentioned. I was very glad to hear what he said about utility production, in which there are great advantages. It was begun in various lines before I became President of the Board of Trade. I have carried it further, and I am a very great believer in this policy, partly because you put your limited quantity of material to the best use, and partly because, unless you have a definitely specified and recognisable article, you cannot make a complete success of price control. You cannot fix a maximum price for an article unless you can define it and identify it, and as an aid to effective price control, utility production has been of the very greatest value.

The hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) and my hon. Friend the Member for Stoke referred to inflation and the dangers that would arise from it. I judge that one of the best means of fighting inflation is to continue an effective system of price control through a post-war period which we cannot now exactly measure, but which can be defined as a period when shortages will continue due to the effect of the war and what follows after—a period when, if we did not have price control, demand would be very much greater than supply, and prices would be forced up sky-high. Out of that would grow all the inflationary chaos and misery of which we had so much experience at the end of the last war. One of the most effective means of preventing this is price control, particularly when applied over a range of the necessaries of life under standardised utility production. Therefore, I welcome my hon. Friend's support of this. I am convinced that we must continue utility production, though possibly with many changes—we may extend the range of utility goods. I will speak of furniture in a minute as that will illustrate it. With regard to a number of the necessaries of life, these things can best be produced under a scheme of utility production—this does not mean bad products at all, but good and shapely, useful and durable products.

12.45 p.m.

Mr. Lipson

Will my right hon. Friend look into the question of utility shoes for children, and see that in future they are made to keep out the rain?

Mr. Dalton

Shoes are a sore subject.

Mr. Lipson

They are a wet subject.

Mr. Dalton

As my hon. Friend knows, because he has had conversations about it with me, no one is more anxious than I am to see that the population is well shod, but there are two difficulties. One is that we still have a tremendous demand for footwear for the Forces, and, important though it is that our civilians should be well shod, it is even more important that our fighting men should be well shod, because they have to go through far greater difficulties—which I need not detail— whether it be in Flanders, Holland or Italy. Therefore, the best leather must still go to the Services. Further, leather is in short supply, although we are doing our best to make it go as far as we can, and it is better to use leather of lower quality than in peace-time rather than not use it at all. We are doing our best to see that the standard is kept up, and I have instituted a plan, since I have been at the Board of Trade, whereby a manufacturer of footwear has now to put a stamp inside the boot or shoe he makes so that we can identify the maker and, if necssary, take steps to prevent him from turning out poor stuff, and, in the last resort, stop his leather supplies and give them to someone else. I hope that is having—as indeed it is—a salutary effect.

With regard to utility furniture, the present scheme is not only giving us cheap and shapely furniture, but a great deal better stuff than a lot of that which was turned out before the war. I am now in touch with the furniture industry, both manufacturers and trade unions, and I am hoping soon to announce the setting up of a committee for the furniture industry, on which there will be representatives of the manufacturers and workers and a certain number of independent people, who can contribute in one way or another to the deliberations of the committee. I hope that committee will be a valuable channel for advising the Government, will encourage the trade itself to raise its standards as compared with what was done before the war, and will give us a furniture industry of which we may be pround. There are good people in that industry, both on the manufacturing and trade union sides, and I want to encourage them to come along and give a lead to others, so that we can build up a higher standard than that which prevailed before the war.

Mr. A. Bevan

Has my right hon. Friend's attention been called to the portion of the Trades Union Congress Report on post-war industry, which makes the most valuable suggestion that not only should the Government provide factories for rent but should also provide appliances for rent, and that where patents are necessary for utility production they should be made universally available, under Government control? Is it his intention to try to extend that aspect of the Government's reconstruction plans?

Mr. Dalton

I am much obliged to my hon. Friend for raising that point. The Trade Union Congress Report is an extremely interesting one. I am going into it carefully, and it is my intention to have a talk with some of those concerned at an early date to see how far we can take advantage of some of their suggestions. I would not, however, like to commit myself in detail at this moment.

We have been struggling up to now with a great scarcity of materials for furniture and other things, owing to the claims of the war. But we are now coming to a point where, in some directions, there will be a slightly more plentiful supply of some metals. I am anxious to see that these supplies are put to good use. Whether it is for furniture, such as metal bedsteads, or whether it is for other lines of civilian production, I shall do my best to make full use of any metal which now becomes available. I hope that this will illustrate that the process of planning is going on all the time. We are constantly adjusting our demands, our sights, so to speak, from day to day, in the light of the war situation. I hope we shall have the continued support of this House for any suggestions designed to make planning for the future switchover as smooth and as efficient as possible.

Mr. Reakes (Wallasey)

I would like to congratulate my hon. Friend the Member for Stoke (Mr. E. Smith) on his excellent speech, and upon his having drawn from the President of the Board of Trade an illuminating and informative statement on matters of outstanding public interest. My hon. Friend's speech was picturesque in that he started on terra firma and ended up in fairy land. He certainly took a rosier view of the future than I take, and I prefer to take my stand alongside the hon. and gallant Gentleman the Member for Holderness (Lieut.-Commander Braithwaite), who issued a serious warning about the result of the colossal expenditure which is going on day and night. There is a serious danger that familiarity with the present astronomical figures of finance is breeding a contempt for national expenditure. We are getting used to the Chancellor playing the role of Oliver Twist every two or three months, formally asking for £1,000,000,000 to carry on the war for a month or two. Now he is asking for £1,250,000,000, and if the war is prolonged—and it will be longer than some optimists thought six or eight weeks ago— we shall see the Chancellor coming here again before long to ask for another £1,500,000,000. There is a danger in all this that the people of this country will feel that there is a bottomless pit from which money can be drawn in future.

I am a realist and I think it is far better to be so than an optimist who is constantly telling the people what a wonderful time they will have when the war is over. Look what happened after the last war. We had comparatively insignificant expenditure during that war, but there came a day of reckoning, and it is my firm belief that there will be a day of reckoning again unless the Government face the position and satisfy themselves whether there is or not wasteful expenditure on a big scale. Personally I can see no safety-catch on expenditure. I see ample evidence of waste in the country, and no one can dispute it. Although we have no alternative to-day but to agree to this Vote of Credit we should demand that there should be an an impartial inquiry into national expenditure.

Sir Percy Harris (Bethnal Green, South West)

A Select Commitee.

Mr. Reakes

Well, I would like to see some fruits of the efforts of past Select Committees. Some of this Vote of Credit will go to meet increased pay for the Services, but it is only a small proportion, an almost insignificant proportion, which is for that purpose. Most of the money will go to keep an unwieldy bureaucracy on its feet. From that angle I appeal to the Committee to tell the Government, in straight and plain language, that now that we have reached this colossal expen- diture it is time they faced up to the situation. I wish we could vote against this Vote of Credit, but we cannot. I do not think it is right to place the Committee in this position of having to take "Hobson's Choice" every few months. I congratulate the Chancellor on his courage. Thirty years ago I do not think any one would have visualised a man coming here and asking for £1,250,000,000 for a couple of months' expenditure, to be agreed to by 40 or 50 Members. [An HON. MEMBER: "There is not even a quorum."]That is so; it is another side-light on the days through which we are passing. It shows where we have drifted to in this country when such a thing can happen, and I am glad that the hon. and gallant Member for Holderness has given a lead, which I very gladly follow.

Mr. Rhys Davies (Westhoughton)

I desire to say only a very few words to the Committee. I have listened to several Debates on Votes of Credit for many years, and I think this is almost the first occasion since the outbreak of war when I have heard anyone suggesting that the time has arrived when we ought to be critical of how much money we are spending on the conflict. That is a healthy sign indeed. The hon. Member for Wallasey (Mr. Reakes) talked about waste of expenditure; I regard all money spent on war as sheer waste; and if I had any company here to-day I would vote against this Vote of Credit in the Division Lobby. I am happy to believe that there is a growing number of people in this country who agree with the point of view I have just mentioned. The time has come at last when our people ought to be told what the total debt and the interest on that National Debt will be when the war ends.

Lieut.-Commander Braithwaite

How can anyone tell that?

Mr. Davies

We can surely get estimates. The hon. and gallant Member himself gave a figure of £700,000,000 as the annual interest. Does he mean to imply that he is more intelligent than Treasury officials?

Lieut.-Commander Braithwaite

I am within the recollection of the Committee in that I said that if we had another winter campaign, by next April the interest on the Sinking Fund, as I had calculated it, would be £700,000,000. I did not predict the date when the war would end; I leave that to the astrologers of Fleet-street.

Mr. Davies

The Prime Minister said that the war would probably go into 1945, so that on the hon. and gallant Member's own showing he is not far from correct. I could not, however, understand his point about the Civil Service and the way they reply, or do not attend to his letters. He has been in this House long enough to know that if he cannot stir up a Government Department by letter he has only to put a Question on the Order Paper to move it to action.

Lieut.-Commander Braithwaite

It would never be reached.

Mr. Davies

As I have said our people must face up to the economic consequences of the war, and the state of our finances when it ends. The expenditure that we are passing to-day is of course simply mortgaging the future labour power of the people of the country. It cannot be otherwise.

Sir Irving Albery (Gravesend)

The hon. Member's party do not agree with that view.

Mr. Davies

That is my own view. The House of Commons is a place designed for people to speak their own minds. If we all said the same thing we would not need a Parliament at all. The House of Commons is always tolerant on this issue. What annoys me is the easy way Members of Parliament grant these huge sums of money to the Government. The last war destroyed one-half of our coal industry, never to recover, and it destroyed also one-half of the Lancashire textile industry, never to recover. This war, I am told, has sent 50 per cent. of our merchant shipping to the bottom of the sea. Then we are told we cannot secure the same standard of life after the war as we enjoyed in 1938 unless we export 50 per cent. more than we did in 1938. I think therefore that those who make glowing promises about a higher standard of life after the war are deceiving themselves and the people as well, and are living in a fool's paradise.

Incidentally, the question has often been put to me: How comes it that the Prime Minister goes twice to America and twice to Russia, when Great Britain is half-way between the two countries? That question is asked by many people. Why do not Stalin and Roosevelt come here for a change?

Let me say what I think will happen at the end of the war. The assumption is that we shall march into Berlin; occupy Germany and keep all the Germans in submission for a decade at least. For what it is worth my view is that what Great Britain and America are doing from now onwards is to make Europe safe for Communism. It does not matter how much money we spend unless we change our attitude of Mind towards the war. We ought to give some hope to the people of Germany who are opposed to Hitler and tell them to rise above the din of battle and help to make peace between the nations of Europe. The mere spending of money on war is not in itself enough; we ought to use our reason, intelligence and diplomacy to assist in bringing this infernal war to an end as soon as possible, and thereby avoid any Chancellor of the Exchequer having to ask for more money for war purposes in future.

Mr. Boothby (Aberdeen and Kincardine, Eastern)

I thought it might be quite a good idea if someone made some reference to the financial position of the country, which, perhaps, is more affected by the Vote of Credit that we are asked to pass than any other aspect of our affairs. We are getting into a financial position which is quite serious; and some of us will soon have to begin to think about how we are going to get out of it. Everyone agrees that our internal financial policy has been extremely well handled by the Government. There has been a good balance between borrowing and taxation direct and indirect. Savings have been achieved on a voluntary basis which amount, in the aggregate, to a truly remarkable sum. I do not think we praise ourselves enough for what the savings movement has achieved and for the work of Lord Kindersley and his organisation. Disparaging remarks are sometimes made by the hon. Member for Ipswich (Mr. Stokes)—who has left us for a short period, and with whom I do not always agree— and remarks are also made in the Press about savings days and savings weeks. But in fact it was necessary that the ordinary people should save a great deal of money during this war; and at the beginning of the war Lord Keynes actually produced a scheme for compulsory saving. He has since admitted that what he thought would have to be done by compulsion has been achieved on a voluntary basis, and it is a very remarkable achievement. Finally, I think we can say that expenditure on consumer goods has been beautifully controlled by the Government Departments concerned.

But there is another side to the picture; and we must now begin to face up to it. We are piling up a colossal external debt. I heard the hon. Member for Stoke (Mr. E. Smith) say how much richer we were going to be at the end of the war. I agree that we shall have better equipment, better-trained workers, a healthier, population and, what is most important, our land under cultivation instead of derelict. But at the same time we have to face the fact that if this war lasts through the winter, as now appears probable, we shall have an external debt amounting to something of the order of £4,000,000,000.

How are we to deal with this situation? Our political position is very strong, because we have been in this business from the very beginning, with all we have got; and most of this debt that we have incurred overseas has been incurred on behalf of other people. Certainly the whole of it has been piled up for the sole purpose of winning the war. For a long time we stood quite alone against Germany—and, when I hear the hon. Member for Cheltenham saying what a tremendous debt we owe to the United States, I agree that they have been most generous, but I say that they also owe us a pretty good debt for what we did for them in 1940–1. The fact has to be faced that at the end of the war, our external international financial position will not be strong.

I want now to direct the attention of the Financial Secretary to the master agreement—Clause 7 of the Lend-Lease Agreement—under which many of our obligations have been incurred. The Chancellor of the Exchequer, at the Mansion House the other day, said we had an obligation under that agreement, to work for the elimination of discrimination in all forms, with a saving clause about Imperial preference. But there was another point in the agreement which has been largely overlooked, and that is that we were also pledged to work for full employment. This is absolutely essential. Our produc- tive capacity must be used 100 per cent. But I want to put this question. Suppose the two things, non-discrimination and full employment, are incompatible, at which of them are we going to aim? My belief is that they are incompatible, for two reasons. First, I think that in the modern world, unless you have some kind of purposeful direction of trade as a whole, it is impossible to prevent depression in one country spreading to another. If we go in for non-discrimination and the United States goes into a depression, as is not impossible, and if we have no means of protecting ourselves against the consequences of that depression in the United States, then the same thing will happen as happened after the last war, in 1929. We shall also be dragged down; and we shall be unable to pay our way, or to achieve full employment, social security, or anything else. It is important to get our minds clear on the subject.

There is a second reason why I think these two things, non-discrimination and full employment, are incompatible. It is because the policy of non-discrimination involves treating national political States as being on an equal footing from an economic point of view. I think that this is a ridiculous proposition in the modem world. It is no good telling me that Monaco and the United States have the same economic position and power, because they are both sovereign political States. That is what non-discrimination ultimately means. Most States and nations have sprung up from political causes; some are very large, like the United States and Russia; some medium, like ourselves and France; and some smaller, going right down to Guatemala. Are all to be treated on an equal footing as far as economic policy is concerned, although political independence has nothing whatever to do with economic realities? We must face this issue. What is the implication? It is that the poorer political States have to get together, in some form of regional organisation if they are to hold their own; and this involves discrimination in one form or another.

Viscount Hinchingbrooke

Does my hon. Friend mean throughout the world, or only in certain areas?

Mr. Boothby

I mean in certain areas. Frankly, I think our only hope lies in rebuilding the sterling area, which will then be in a position to come to good terms with the dollar area, and the rouble area. If we go into some international arrangement country by country, we shall not be sufficiently powerful to do a deal at all. On 10th May the Chancellor of the Exchequer made a speech from which I am about to make two quotations.

The Chairman (Major Milner)

I do not see the relation between the hon. Member's present observations and the Vote of Credit.

Mr. Boothby

My observations are addressed to this point—that we are now asking for a very large sum, which will put us still further in debt. We are in consequence getting into a very difficult financial position. Your predecessor in the Chair, Major Milner, ruled very definitely that anything that had a direct bearing on the question of our financial position after the war, was in order. I am addressing myself to the proposition that the construction of the sterling area is the one way in which we can hope to get out of the mess.

The Chancellor said on 10th May: I have said more than once that the Government would not be disposed to favour any plan which was likely to interfere in any way with the relationship between the different States which have been in association with one another under what we understand by the sterling area arrangement. We adhere quite firmly to that. In a further passage he said: always provided that there is nothing in the plan which will prevent us from entering into reciprocal trade agreements with other countries or groups of countries, either in the monetary or in the economic field."—[OFFICIAL REPORT, 10th May, 1944; Vol. 399, c. 2045.] That encouraged me, and think encouraged many hon. Members; but the other day at the Mansion House the right hon. Gentleman seemed to me to go back completely on those two statements, because he said we were pledged, as an act of good faith, to work for the gradual elimination of discrimination in every shape and form, under the terms of the Lend-Lease Agreement. I do not think the House of Commons was ever committed to that; and I do not think the House is very happy about it. Here we are being asked, in a small House, every three months, to add another £1,500,000,000 or so to the Bill. We are entitled to ask in return have the Government any plans for getting us out of the financial difficulties that we are getting into so far as external debt is concerned? 1.15 p.m.

May I also say a word or two about this question of reconstructing the sterling area? It is a vital matter. The Chancellor of the Exchequer admitted the other day that it was. I am not going to ask my right hon. Friend for a definite statement of policy to-day about how we are to deal with the vast and growing sterling balances in the City of London; but I want some assurance that the Government are giving consideration to the matter.

There are three possible ways of dealing with the problem of these sterling balances, which exist entirely as the result of our expenditure on the war effort. The first way is, you can fund them and pay. The effect of that on our balance of payments is bound to be very great, because it at once means that we shall have to export at least 50 per cent. more than we did before the war, in order to pay our way. The second way is, you can block them altogether in this country. That would affect our credit adversely, and would lead to the immediate withdrawal of all other balances held in London. The third way is to reconstruct the sterling area.

At the end of the war the countries of the sterling area will have large sterling credits in London. I instance India, which already has a colossal sterling balance, and will also have many urgent requirements. These countries cannot buy everything here; but, so far as both they and we satisfy our import requirements within the sterling area, that is to say, the British Empire and Western Europe, then our imports simply become a set-off against our exports, leaving only the difference in terms of uncompensated export. We cannot possibly do this unless the existing limited convertibility of sterling within the sterling area is maintained.

As long as sterling countries are able to use their sterling reserves in London for any purpose they like within the sterling area, they will keep them in London. But if non-discrimination is to be applied to all countries, then exchange control is bound to be introduced for all intra-sterling "bloc" payments. The conclusion of the matter is that the prohibition of limited convertibility within the sterling area must ultimately lead to the total blocking of all these sterling balances in London; and that will place us in an impossible position. Before the war Dr. Schacht used the economic pulling power of Germany, by means of bilateral agreements, to force the other countries of Europe to buy goods which they did not want. We are in a much better position than that. We could use our trading and financial position as the centre of the sterling area to enable countries to export to us; and, at the same time, to import in exchange from all the other countries in the sterling area, with a very wide range of choice. It seems to me that that is our best hope for the future.

We come back to the doctrine of nondiscrimination This is a vital issue; and we shall have many discussions on it in this House before the next six months are out. I think myself that it is based on two false assumptions. The first is that all sovereign States are of equal economic status; and, therefore, that the size of national protected markets is of no consequence. The second is that prices absolutely determine all social advantages. If we are to go on spending money like this, and create new debt at this rate, we shall have to face this issue, and thrash it out; and get non-discrimination clearly defined, and then see where we stand with the United States. At present, it would appear to mean total discrimination in favour of the creditor nations with a high capacity to build up an export surplus, as against those countries, like ourselves, which have nothing but their productive capacity and import market to offer. If we go in for a policy of non-discrimination, we put the entire responsibility for the conduct of world trade in the hands of creditor nations like the United States; and leave ourselves defenceless in the face of their economic power.

We shall not have the power to use our greatest asset after the war, which is our manufacturing capacity, and our capacity to absorb raw materials from other countries all over the world. My fear is that if we allow this issue to drift, if we have the Chancellor of the Exchequer making one kind of speech on 10th May and another kind of speech at the Mansion House shortly afterwards on the subject of discrimination, no one knowing what our real objective is, there must in the end be complete confusion as between the United States and this country; and we shall get into the same sort of mess with them as we got into after the last war, over the repayment of debt. We shall find in the end that we cannot carry out our obligations to the United States; and we shall get much unnecessary bitterness as a result. We have a good cause, and a good case, and we have every right to state it. My appeal is for the Government not to go on quibbling and hedging on this business. I do not think that they have yet made up their minds. They must. It really is necessary to face this issue now with the United States. I believe that we can come to a good agreement; but we shall never do it by dodging the facts, and refusing to face the issue of non-discrimination, which is by far the most important economic issue confronting this country to-day.

Commander King-Hall (Ormskirk)

The subject that was raised by my hon. Friend the Member for East Aberdeen (Mr. Boothby) is of first-class importance. It is, no doubt, due to the arrangement of Business that there is a small House. Unfortunately, it is a subject which the layman supposes to be beyond his comprehension. It is not beyond his comprehension. Anything is understandable, provided it is intelligently explained. This subject is one which is very much in the hands of experts, and I sometimes think that a great deal of the jargon they use is for the express purpose of mystifying the layman. It is a subject which is of vital importance to every person in the country and to the whole world. I want to detain the Committee for only a few minutes while I make a few comments, almost by way of footnotes, to some of the remarks which fell from my hon. Friend the Member for East Aberdeen. I do not disagree with him in a big way, although I think that he has omitted certain considerations in the case that he put, considerations which we should keep in our minds. As he rightly said, the main subject which he felt to be of importance at the moment was whether the policy of full employment and the policy of non-discrimination are or are not incompatible. There is no disagreement anywhere on the need for full employment. I agree with what he said that, if the productive capacity of this country is not functioning to 100 per cent. capacity and, incidentally, with a great deal more efficiency than it was pre- war, then we are going to be in a bad way.

I need not labour the statistical background of our overseas debts, and the loss of our overseas investments, and so forth. While agreeing with what my hon. Friend said, that, if you are linked up with other people you cannot possibly avoid suffering from their economic troubles, I would also say that you can also benefit from their economic prosperity. When he points out that one of the advantages of discrimination is that you may be able to do something to isolate the sterling area from some other area, such as the United States, which may be undergoing a depression—and frankly, I think the United States may well be in a very severe depression after the hectic boom they will have after the war—it is also arguable that the world has reached a state of economic unity in which, instead of trying to isolate ourselves from countries that have a depression we should try to go to their rescue. I would ask my right hon. Friend the Financial Secretary and the Committee to cast their minds back to what happened in 1931. There was then an economic blizzard, starting in the centre of Europe. What happened? Among other things, the governor of the Central Bank of Germany was flying round Europe in a very second-rate aircraft trying to get £20,000,000 in gold to pay his civil servants. Broadly speaking, there was a general sauve qui peut. Everybody fled back behind their tariff barriers. We went and made the Ottawa Agreements, and there was a general attempt to wrap a kind of cloak round oneself and to isolate oneself from the economic blizzard which was sweeping through the world and causing such distress and misery. The London Economic Conference—

The Chairman

I do not see how this past history has any relation to the present Vote of Credit. I thought the hon. and gallant Gentleman was drawing an analogy.

Commander King-Hall

I was relating my remarks to the fact that my hon. Friend has advocated that it is impossible to have a policy of non-discrimination and at the same time have full employment. I am arguing that we have to be careful how far we go in pursuing the policy of creating the sterling block and thereby isolating ourselves. I was giving an example of a previous occasion on which the policy of isolation was attempted, with results not altogether satisfactory to the world economy.

Mr. Boothby

I would remind my hon. and gallant Friend that once we got going we had a substantial recovery in 1937.

The Chairman

We can talk about the present and the future, but not about the past, except in passing.

Commander King-Hall

I will not be drawn into pursuing that subject. I would also put this point. My hon. Friend obviously hoped for a sterling area which will have a bargaining value. I take it he will agree with me that he has in mind the Argentine and certain South American primary producing countries as part of the sterling area. He must not forget that there is a tendency in those countries to deprecate the notion that their future consists in being an overseas farm linked up with Great Britain as an industrial centre. I commend to his attention a speech recently made by the Minister of Agriculture for the Argentine which shows that this notion of self-sufficiency and of a balanced economy is also growing up in those sections of the sterling area. I am not sure that my hon. Friend's view of the sterling area which might have existed in 1931–32 is the sterling area of the future.

It is of the greatest importance that the Committee should remember that we cannot divorce political matters from these great economic questions. We have to be careful for the highest political reasons that we do nothing to harm Anglo-American relations upon which the future of the world depends. I do not disagree with my hon. Friend when he reminds us that America owes us a great debt but I think we have to be careful, particularly in view of what I should venture to say is the less well-informed public opinion of America on monetary matters as compared with opinion in this country, of allowing notions to grow up in the United States which would foster a kind of power politics atmosphere arising, in which a sterling bloc will be competing or in a position to bargain hard with an American bloc. I do not think it would be to the interests of this country to get the United States into the kind of atmosphere which existed when the question of naval power cropped up between the two countries, and some people in this country thought that we should start a race. That would be very unfortunate and the same misfortune would arise if the notion got abroad that after this war, Anglo-American co-operation, which, politically and economically, is essential to the welfare of the world, was to start by some hard talking across the table in the course of which we were to be the centre of a sterling bloc trying to mobilise our forces in opposition to the United States.

I started my remarks by emphasising that this was not a mysterious subject but it is a very important subject. I have said this before to the Financial Secretary, and I say again now, that it is the duty of the Treasury, who have shown during the war what they can do to improve knowledge and statistical information, to make a serious attempt to get across to the lay but thoughtful public what is really involved in the kind of subject which we are skirting round the fringe of to-day. In the last resort, what happens in this House will be linked up with what public opinion thinks on these matters, and the nonsense which is now being put out, very often for suspicious reasons in the cheap newspapers, on this subject is simply nauseating.

1.30 p.m.

The Financial Secretary to the Treasury (Mr. Assheton)

Perhaps it might be convenient for the Committee if I were to intervene for a few minutes at this stage of the Debate. We have already had a reply from the President of the Board of Trade, which has covered a good many of the speeches made in the earlier part of the Debate. I understand that certain hon. Members wish to raise matters to which they expect the Under-Secretary of State for Air to give them a reply. I will, therefore, deal with some of the more recent speeches which were made particularly on financial topics.

I understand what my hon. and gallant Friend the Member for Ormskirk (Commander King-Hall) means, of course, when he says that the public need greater education in these financial matters. He knows as well as I do how difficult it is to bring that about. There is not a Member of this House who has ever taken the opportunity of addressing his constituents on financial matters, who does not realise how extremely difficult it is to bring home to the ordinary man and woman, however intelligent he or she may be, the full complexities of these financial problems. My right hon. Friend the Chancellor of the Exchequer does what he can in public speeches, and he will bear in mind what my hon. and gallant Friend has said.

My hon. Friend the Member for East Aberdeen (Mr. Boothby) has asked me to do something which he knows it is not possible for me to do, to give him a full answer on a large number of questions in relation to our post-war economic policy. He certainly knows, and I believe the rest of the Committee know very well, that we are to have a Debate in this House on the Bretton Woods proposal, and I regard my hon. Friend's speech more as a preliminary shot in the campaign which perhaps is to come, and may already be in evidence, than a speech expecting from me a full reply at this present time. He knows that these matters are not only having the consideration of the Government, but having the very closest consideration of the Government at the very highest level, and he must be patient and wait for the replies which he will, one day, get from those who may be much more qualified to give them.

I am bound to tell the Committee that I was very pleased to see a healthy increase of interest in our expenditure. We have brought many Votes of Credit before this Committee, involving incredible thousands of millions and this Committee has given us these Votes from time to time without great Debate. No one speaking on behalf of the Treasury can possibly Object to any criticism on these matters, whether it be criticism in this House or in the Select Committee of National Expenditure. It is the duty of the Chancellor of the Exchequer and the Treasury to listen to all criticisms upon these matters, because the control of spending is one of the most difficult duties that anyone can have to carry out, and all the help my right hon. Friend gets he is very grateful for. My right hon. and gallant Friend the Member for Holderness (Lieut.-Commander Braithwaite)—

Lieut.-Commander Braithwaite

I am not "right hon." yet.

Mr. Assheton

Not yet. I was a little premature. He asked the Committee to remember how necessary it was for us to scrutinise expenditure, and so on. He complained of the over-lapping of Ministries and of the size of the Civil Service, and of what he called the bureaucracy. I know well enough that in time of war there are a great many Ministries and sometimes it is very difficult to prevent over-lapping. On the other hand, the pace at which the machinery of Government has to be built up in war makes it extraordinarily difficult to get it to work as perfectly as we should like it to work. All the same, the Treasury are all the time doing their best to cut out waste and to see that the taxpayers' money is looked after and carefully spent. My hon. Friend the Member for Cheltenham (Mr. Lipson) also touched upon this subject. He suggested that there was wasteful expenditure. In a vast expenditure such as ours is, £5,000,000,000 or £6,000,000,000 in a year, who can deny that there is some waste of expenditure? It is our effort to limit it to the lowest possible figure. My hon. Friend asked me what has been the cost of the war up to date. I ask the Committee to steel itself while I give it the figures. Our total expenditure during the first five years of war up to 2nd September, 1944, was £23,893,000,000. That is what we spent in those five years—just on £24,000,000,000. It is very difficult to understand what those figures really mean.

Commander King;-Hall

Have the Treasury ever attempted to make an estimate of what one might describe as the real cost of the war; that is, the actual value of things that cannot be replaced?

Mr. Assheton

No, I am afraid we have been too busy on other matters to make such an estimate.

Commander King-Hall

Otherwise the figures might be rather misleading.

Mr. Assheton

It would undoubtedly be a very difficult task. My hon. Friend also asked me whether I could assure him that the financial burden is no greater than it need be. That depends upon the control that we are able to keep upon expenditure. I have already told the Committee that we do all we can to keep that control. In the Treasury, there are officers whose duty is entirely concerned with criticising the expenditure of the Departments, yet in this House we are constantly being told from all quarters, that we are restraining some expenditure that ought to be allowed. The Treasury are always between the devil and the deep blue sea, and we are, therefore, glad to have the support of hon. Members who have economy at heart.

I must mention the speech of the hon. Member for Westhoughton (Mr. Rhys Davies). He said some things which were wise and sensible, and some things with which this Committee cannot agree. He said that the whole of the expenditure on this war is waste. That is a proposition which this Committee cannot accept. If this money had not been spent on this war, we should be now under the domination of Germany, and that is the defence for its expenditure.