ECONOMIC AFFAIRS (MANPOWER)

HC Deb 27 February 1946 vol 419 cc1938-2043

3.22 p.m.

Mr. Oliver Lyttelton (Aldershot)

We on this side of the House welcome the opportunity which is now presented to us for some review of the economic state of the nation and a review of the progress which we are making towards the re-establishment of our trade and industry. I would ask the House to believe that, in what I have to say, I shall not try to be promotive of controversy or of party passions, and I shall genuinely try to be objective and not merely objectionable, although of course 1 cannot avoid criticisms. I think it worth saying that we on this side of the House do not approach these economic questions with any preconceived notion of rejecting any expedients which may appear to fit the times. We shall judge them entirely by the touchstone of whether they are practicable, and whether, in our opinion, they will serve the public interest.

I have a suspicion that today's Debate is about to herald a period of government by exhortation, and if it is to mark also the end of a period of government solely by restriction, the occasion is none the less welcome for that reason. However, the exhortations which I expect will be uttered by His Majesty's Government will fail unless certain things are done: first of all, unless we are willing to turn aside for a moment from facing the future to facing the present and looking at the facts; and secondly, unless the Government can try to achieve something of the national drive and national unity which we achieved at the time of Dunkirk, or try to unleash some of the energies which sprang to life when our task was to equip Russia when she was invaded. The Government, however, can only get such national unity by being willing to defer some of their most far-reaching projects, and by laying on one side some of those streamlined Bills with which we on this side of the House are becoming so painfully familiar; in short, by setting itself to close rather than widen some of the deep cleavages which separate the great political parties. If I may say so with respect, the violent propaganda which is carried on, with a virulence unequalled since the 18th century by the organs of the Left—[Hon. Members: "Oh."]—[against that part of the nation which has the misfortune not to share their political views, is not the best of preparations for a common drive for a common purpose.

I must try to give some review of the economic state of the country as it appears to us, partly, of course, to try to elicit information from His Majesty's Government which is not yet available to us. Perhaps it is right to consider first the progress which we are making towards re-establishing our export trade—[perhaps the most vital of all the economic problems which face us because, on the re-establishment of the export trade, depends our ability to buy the food and the raw materials to nourish our population and to sustain our industries.

In 1938 our exports averaged£39.2 million per month, and I think it is fair to say that if that sum were adjusted to today's price level, our exports should be computed at about£60 million a month in terms of today's money—[that is probably a slight under-estimate. Comparisons with today's exports must be rather rough and ready because it is extremely difficult to eliminate from the figures those hectic exports which I think will only be a passing feature of the scene. However, in November our exports were about£30 million, and it is necessary to state that they were abnormally depressed by certain passing circumstances, notably the dock strike. In December and January—[and I think this is on the Prime Minister's authority—[our exports were£43,500,000 in December and£57 million in January. These last two figures, just as the November figures were depressed, were raised by the release of certain goods held up in November, so it is fair to say that an average of about£43 million a month is the present level of our exports. Having adjusted the prices, we have to compare that figure with£60 million in 1938.

Now this general calculation is also borne out by looking at the volume index, and I cannot go beyond the last quarter of 1945, when the volume of our exports would be under 50 per cent. of the average of 1938. We must remember that we ' are aiming at a target of 75 per cent. above that, and so we are now under 50 per cent. in relation to the target at which we aim of 175. The figures which I have given, however, are very much worse than they appear at first sight because we must remember that anything we can now produce we can sell. This is a fact which cannot be gainsaid. No pressure in daily business is necessary on the unhappy commercial salesman; all the pressure that has to be exerted now is upon the production engineer and upon the workers engaged in production. It is disquieting, therefore, to find the rather pedestrian rate at which our exports are being re-established.

The cause need not be looked for in either the cost of our goods or their quality, nor, we are assured, is it due to any lack of ships. We have been assured by the Minister of Transport that there is no hold-up in shipping for export. That is not borne out in practice, because exporters.are getting ships at irregular intervals. We are driven to the conclusion, which is inescapable, that our exports are not rising with the buoyancy which they should, because our production is lagging behind. It is necessary to place the present value of exports in relation to the value of' imports, and to appraise the debt. I think the last available figure shows that the average value of imports is something of the order of£90 million a month. They were£90.2. million, for example, in the month of November. I think two-thirds of these imports come from non-sterling countries, and one-third from sterling countries. But, if we set these figures against the exports of, say,£43 million we are running into a deficit on international account of approximately£50 million a month on physical exports and imports;£600 million a year, which is a very formidable figure. I do not think any private in- dividual has the data on which to make an estimate of invisible exports at the moment, but on physical exports and imports we have a deficit of no less than£600 million a year. Although I am not suggesting it is entirely relevant, that is an amount which would exhaust the American Loan in about 18 months.

I confine myself to the physical exports in order to draw particular attention to the great need to foster our invisible exports by all the means that lie in the power of the Government. I again remind the House that this deficit is not due to inability to sell, but to inability to produce. I must turn therefore to the level of production. Let me say how much I welcome the public appearance of a very old friend, the Monthly Digest of Statistics. This document is very familiar to all who were Ministers in the Coalition Government. In those days, of course, the information could not be published for obvious reasons. The present document is a repetition, in many respects, and an expansion in others, of the information which was available to the Coalition Government. It is a very welcome and comprehensive document. 1 suppose the publication is in fulfilment of one of the pledges, or recommendations, in the White Paper on Employment. I congratulate the Central Statistical Office on this production. I hope they will now feel able to tackle the problem of compiling some production index to give us an estimate, first of all global, of our total rate of production, and afterwards to examine an index of production for particular industries. It will be a great help in appraising our position. Even without such an index, certain broad conclusions can be stated. The labour force engaged today on home civilian industry and services, and for exports, is almost exactly 2,500,000 workers under the total employed in mid-1939, which is a favourable reference year—[favourable to the Government. This figure is all the more striking, because, since 1939, the working population is greater by 1,220,000 workers, in round figures. The Minister of Labour is my authority for both statements, so I hope he will not look sceptical. If we presume, which we cannot, the output per man week to be the same, our index production would be somewhere in the neighbourhood of 85 per cent.

It is necessary to go a little further, and look at the production in some of the basic industries, on which our whole economic future depends. Our present rate of production of saleable mined coal is about one million tons per week under the level of 1938–52 million tons per annum down. That is perhaps the grimmest figure in the whole economic picture. I think it is becoming generally known that there are many plants working below capacity because of shortage of coal. I state categorically, after making inquiries, that by Easter, the railways will have to reduce the number of trains very drastically, or a number of plants engaged in production for civilian consumption and export will have to close down altogether. There are other bad consequences arising from the lack of coal. We cannot export coal to Sweden, and so cannot get the timber we require. The same applies, I believe, to fats from Denmark.

I next deal with the basic industry of cotton and wool textiles. Production of cotton yarn is still disappointingly low. The bottleneck, I believe, is still in yarn. The latest figures, while they show some recovery from the lowest points reached in the war, show no buoyancy. The figures for production in October and November, 1945, are no better than those for October and November, 1944, which was during the war. The supply of woven cloth is still approximately at the level of the first quarter of 1944. Steel output, on the other hand, over which the sword of Damocles is still suspended, shows a very much better picture. It is running at an annual rate of about I2£ million tons compared with less than Io£million tons in 1938. That is satisfactory, but there is an increased capacity of at least one million tons which could be reached with great benefit to our exports if we could import—[and that is a shipping matter—[a little more foreign ore and also if there were more adequate supplies of coal.

I turn to the question of employment and the reallocation of labour. We are still 2,500,000 under the 1939 level in civilian industry in spite of the increase in the working population. I am somewhat puzzled by the positive achievements claimed by the Ministry of Labour, so to speak, on the other side of the account. It is claimed that 1,850,000 workers have been transferred from war production or Government work, to civilian industry since the middle of 1939. Of this number 1,114,000 have gone, according to the Ministry of Labour figures, into the category of metals and chemicals. Unfortunately, this category includes metal manufacturing, merchant shipbuilding and ship repairing, engineering, aircraft motors and other vehicles, metal goods, chemicals and 'explosives. It is impossible for a private individual to get a close analysis of what is happening, but I can say, with good authority, looking at it from the intake end of industry, that these figures are not borne out; they have little practical significance. We know that these 1,850,000 workers have not been transferred from war production on to peace production. The great bulk of that transfer is not a physical transfer at all, but merely a reclassification of their occupation by the Ministry of Labour—the same man at the same bench who was previously on Government production and who is now on civilian production. That is not a criticism; it is a fact.

All over the engineering industry, we are very short of labour. I am in personal touch with the labour situation, the supply of labour in London, Manchester, Coventry, Leicester, Birmingham, Rugby, etc. The story is always the same, "Our production is inert and cannot be raised because we cannot get the labour." But it cannot be got I can only ask the Ministry of Labour to conduct an inquiry from the other end of the industry so that we can get a more accurate picture. They will find a labour situation at the intake end which does not at all accord with the release figures that are given. They will find the results extremely disquieting. in the engineering industry we are accustomed to receive exhortations and even eulogies from the President of the Board of Trade, but. we get no help with the main shortage from which we are suffering, that of labour.

One of the most serious aspects of employment at this moment, and perhaps one of the most serious aspects of our national economy, is that there are no fewer than 1,790,000 workers at the present time engaged on the production of munitions of war and warlike equipment. As far as I can see—and this is subject to correction—the labour force making munitions has, up to the present, not even been shrinking by the normal amount of wastage. It would appear that casualties of this labour force have, to some extent, been made up by drafts from the general pool. Very belatedly the scandal of these figures—and they are nothing less than scandalous—has been recognised by the Government, and in the White Paper on Defence a tardy, but nevertheless welcome, repentance is announced, and it is confessed that this figure of nearly 1,800,000 must be reduced by the end of the year to 500,000. This is indeed welcome, but it hardly excuses the fact that in February, 1946, six months after the end of the Japanese war and nine months after the end of the war in Europe, this vast number are making munitions, and no doubt still making jungle equipment for the welt in Burma. It is to be hoped that we can manage to stop preparing for the last war, but it really does not appear so from these figures.

I must refer to the Armed Forces, and again this is just a statement of fact. By June, 1946, we shall still have 2,000,000 men and women in the Armed Forces. I can say with great certainty that we shall then have more than 1,000,000 men and women making munitions, so that in June, 1946, one out of every seven of the working population will be engaged, either in the Armed Forces or in making munitions. That is a very serious figure. There is another aspect of the matter. I am now dealing with that part of our national economy which consists of "taking in one another's washing," to use the old phrase. There are 950,000 workers in national Government service, and 850,000 in local government employment. In June, 1946, adding that total to the 3,000,000—and that is an under-estimate—employed in the Armed Forces and munitions, we reach a total of 5,000,000 people on Government service and not really engaged on productive industry, out of a working population which may well have sunk by that time to 20,000,000; it is now 20,900,000. That means about one man or woman in every four will fall into those categories.

Perhaps the most ghastly monument of waste is represented by this production of munitions, nearly all of which are as obsolete as the cuirass or blunderbuss, the moment they leave the production line. Have the demands of the Admiralty for capital ships been adjusted to these times of the atomic bomb? I am told—I hope it is a joke but I believe it is serious—that for the first time, since the United States came into war produc- tion of aircraft, we have surpassed their monthly output of combat aircraft. I cannot congratulate His Majesty's Government on that left handed record, if it is a fact. It is also said, and if it is not true its denial will do good, that Stirling aircraft, which, to our certain knowledge, have been obsolete for some years, have quite recently been produced, and have been scrapped as soon as they have left the production plant. Can we have a reassurance about that?

Mr. Lee (Manchester, Hulme)

Would the right hon. Gentleman allow me to ask a question? In relation to the production of munitions, would he differentiate between those so engaged and many thousands of engineers, who in establishments under his chairmanship, as he well knows, never changed their prewar type of production during the war period? While that productivity was necessary for war purposes during the war those engineers are still employed on the same type of work, but are classified as being on war work.

Mr. Lyttelton

I recommend the hon. Member to study a footnote on page I of the employment section of the Monthly Statistical Digest. I had better read it. No doubt this will come as a surprise to the hon. Member. The figures for munition workers are here referred to as "mainly equipment and stores for the Armed Forces. The figures include some employment, which cannot be separately distinguished, on a limited range of goods which are put to civilian use, but as far as possible persons producing goods for civilian use ordered by the Supply Departments are included in ' Home market ' or ' Export.' That is a complete refutation of the defence which is sometimes put up.

I turn to other disquieting features of employment. The most disquieting, and the greatest cause of our disappointing rate of production, is the fact that we are not working as hard as we should. Output per man-week— [Laughter]—I put it in the least provocative way I could. I say, "We are not working as hard as we should "—the nation, if hon. Members wish. I have made extensive inquiries of nearly all industries, and everywhere I get confirmation that output per man-week is down by 20or 30 per cent, since VJ-Day. This is not a criticism; these are facts. I do not think that any industrialist or experienced trade union leader will deny the truth. of that state ment. Why has it happened? We have, of course, to recognise that management and workers alike are tired after six years of war, and they have very little variety in their diet.

Of course, there is the feeling (by those who have seen the New Jerusalem in technicolour during the Election, that a new era has dawned, and perhaps high earnings and high wages can still be gained without a high rate of work and effort. No doubt, there is some force in both those arguments, but I think there is a material factor which far outweighs the psychological factor. We cannot expect a full week's work out of the workers of this country at this moment, be wages what they may, because the goods which they want to buy are not available. I know quite well there is some outlet in savings. Certainly the working population has made a noble contribution to financing the war by savings but, human nature being what it is, there comes a time, when a man says, "I really prefer a day in bed to another war savings certificate." Is not that very natural?

It may interest hon. -Members opposite to know if they do not know already, that this particular problem was faced by Russia. The Russians had all the advice and technical assistance which we could give them in certain industries, in which production was extremely low. They could not make out what the reason was. The reason was that life was too drab. There was a uniformity of wages and a uniformly dull choice to the consumer. I know that this is a poor form of Socialist doctrine. The Socialists rather believe in cutting the tops off everything and making everything the same. [Interruption.] It is really quite a serious point There are not available enough of the things which the population want to buy. The President of the Board of Trade is always telling us that we have to tighten our belts. Unfortunately the situation of most people by now is that they have not got any belt to tighten. It is very difficult. We are told we must do without in order to export.. This, in broad principle, is very desirable but like so many of the theories of the President of the Board of Trade. it remains a theory, and has no relation whatever to human beings

Lieutenant Herbert Hughes (Wolver-hampton, West)

Is the right hon. Gentle- man aware that traders are saying quite openly, that, in fact, their sales during the war years were considerably more than they were before the war, because the average working population are buying more now, and have bought more during the war, than they did in the days of peace—the reason being they have more money to spend?

Mr. Lyttelton

The working population has greatly increased. This is really not an argumentative point It is a fact which every industrialist and every worker knows. The incentive is not there. This is the main cause of the very serious falling off in productivity of nearly 30 per cent. They have no incentive and the goods which they want to buy are not available in the shops

I think we ought also to look for a moment at other causes. A very serious cause—in which sometimes unholy alliances are to be found of the Government, the employer, and the worker—is a great tendency to remain in the attractive engineering industries which have been built up in the war, and, very naturally, not to seek employment in some of those basic industries, which are less, attractive but which are nevertheless vital to our economic life. A foundry is a less attractive place in which to work than a radio valve factory.

Mr. Kirkwcod (Dumbarton Burghs)

You will have to pay them accordingly.

Mr. Lyttelton

The hon. Member should address these exhortations to the Government and not to me. There are many workers who are hanging on to their jobs in the hope that they will not have to go to less attractive industries. There are many employers who are retaining workers because they wish to keep a command over skilled labour. There are many timorous officials, if not Ministers, in His Majesty's Government who are encouraging the process.

Another cause for the maldistribution and shortage of labour lies in national planning or national shamming, as it often is, in industry. National planning is only possible of industry if we are to direct and discipline the principal ingredient of production, which is men's minds and hands, in exactly the same way as we discipline and regiment the raw materials, the machine tools, the building licences, and the capital. The present national plan consists of putting every kind of restriction and control— many of them are necessary; I am not denying that—upon.the material ingredients of production, whilst leaving the main source, namely men's labour and brains, entirely undirected. We on this side of the House think that is socially undesirable, and at least hon. Members on the other side think it is politically impossible, to dictate to every man and woman where he or she is to work. Perhaps here is something upon which we all agree, though hon. Members opposite have rather different reasons. If we do agree, the national plan must be recast. At the present moment, and I say this with the deepest sincerity, we are getting the very worst of both worlds. We are cramping and confining individual enterprise and initiative; we are wrapping our industrialists, our traders, and now our financial institutions, in a mass of regulations which prevent them from doing anything which does not accord with the so-called national plan. But the national plan is a sham, and will remain as undefined as it is unattainable, unless this point is faced.

The last subject on which I must touch for a moment is that of our national expenditure. We are now informed that our national expenditure is to reach the really staggering figure of£3,940 millions in the year 1946–47. For the year which begins nine months after the end of the war in Europe, and six months after the end of the Japanese war, this vast sum is to be expended. It is no use the Chancellor inveighing against inflation and blowing the Treasury trumpets in the battle against it if he is to put out figures like this. I ask the Prime Minister how sums of this kind are to be financed. Is it not inevitable that the mass of the population will have to be taxed more heavily, unless we are able to make cuts which seem altogether beyond the immediate possibilities? There is no other means of raising a sum half as big as this by orthodox means.

Here is a field where some national planning might take place, but have the Government got any plan at all? Have they made a computation of the total liabilities which are now piling up one upon the other—the National Insurance scheme, the comprehensive medical service, the re-equipment of the coal mines, the great number of houses we must build, the subsidies to keep down the cost of living, and the possible cost of the pledge, rather unwisely given by the Chancellor, to keep the cost of living pegged down in all circumstances. We are entitled to look at everything which is proposed in the light of figures clearly presented to us, but they are not clearly presented to us, in my opinion, because the Government have not totted up the sum. I think this general survey shows that we are in a very grave economic condition.,

May I, with respect, suggest some of the means and measures which should now be taken, and taken quickly, to put things right? First, I think it necessary to arrest the policy of nationalisation at the point which it has now reached. I do not ask hon. Members to give up any cherished beliefs, but let these further measures be delayed for two years.

The Chairman (Major Milner)

I must ask the right hon. Gentleman not to refer to matters which require legislation. This is a matter which would involve legislation.

Mr. Lyttelton

I am suggesting that further experiments might be deferred, and it is a suggestion that the Government should refrain from legislation. If I did not express it properly, I apologise, but that is my point. I think we ought, at the present moment, to take a pull. Secondly, let us use more imagination, and devote more attention to the study of new industries which can be developed here, when we get the labour. That study ought to begin now. Does the Government's imagination extend beyond the watch and clock trade, about which they are taking active measures now? [Interruption.] I am talking about the provision of new industries

Mr. Medland (Plymouth, Drake)

Such as?

Mr. Lyttelton

Well, such as watches and clocks and film base. Thirdly, we must cut down national expenditure and plunge the knife even more deeply into the. bloated figures of the production of weapons and munitions. Fourthly, we should turn a critical eye to the nature of the weapons we are making. Fifthly, we should try to persuade people to get to work again. The Government will not succeed on the philosophy of the Presi dent of the Board of Trade. The apparent paradox is true; we shall not get higher production and higher exports, unless we can release more goods for home consumption. It will payx—and I am only taking the economic point of view—to give the home population some more motor cars, some more petrol, some more radios and even some more luxuries, even if these measures appear to be, at the moment, at the expense of exports. Sixthly, could we not use the eloquence of the Lord President of the Council to promote our trade, and not misuse it in telling everyone that British industry is bad and inefficient? I may say that I expect small positive results from this suggestion, but some negative gains. Seventhly, let us re-open the terminal markets, especially those in copper, rubber and metal, even if there are some foreign exchange difficulties in doing so.

This is, again, one of the means of re-establishing our invisible exports. These exchanges are a necessary piece of machinery for the trades which they serve, and they were designed, and their origin, nature and the very reason for their existence is, to prevent the taking of unnecessary risks by traders, whether manufacturers or distributors. They will cheapen the cost of many things which we have to import. I assert that, today, the price of cotton is several cents a pound above what it would be if the Liverpool Cotton Exchange was open, and that opinion will be supported by experts if they are consulted. Our present system in cotton is said to be block purchase. Actually, it is blockhead purchase. These terminal markets will bring, not only invisible exports, but much indirect business to manufacturing, warehousing, insurance and banking.

Eighthly, the Government should abolish the Excess Profits Tax. As a mere tax, it is bad, though it has won universal commendation in war as a means of taking the profit out of war production. But the war is over, and now this tax leads to inefficiency and waste, and is it surprising that this tax, on one of the sources of capital which the Chancellor of the Exchequer and the Government are narrowing every day, is now acting as a squeaking brake on the expansion of industry? There is no justification, other than that of revenue, for keeping such a tax on at this time. Ninthly, could we not have a more positive attitude by the Government to industry? Is it not time they dropped their present attitude of: I come to bury Caesar, not to praise him? Tenthly, eliminate restrictions wherever we can. We cannot do without controls on things which are genuinely scarce, but there is no control over the great motive force of industry, which is labour, and which is scarce enough. Could we not try to stop the game of battledore and shuttlecock between Government Departments? If the Government need an instance of that, they can find one in their own family, over housing; they will find this battledore and shuttlecock in the Ministries of Health, Works, Supply, Labour, Town and Country Planning and last, but by no means least, though, as I think, perhaps worst, the Ministry of War Transport. The Government should not forget that everybody has not the energy to hack their way through the jungle of Government restrictions. Let us have some measures to do things, and not more and more legislation every day to prevent us doing things. I really believe that the road to economic perdition will be found to be paved with streamlined resolutions.

Lastly, could not right hon. Gentlemen opposite ask some of their supporters to forgo the sport, however amusing it may be, of imagining everyone opposed to their political views to be, necessarily, a racketeer or a plutocrat? Those who do not belong to the Labour Party at least put up as stout a fight as anyone else in the last war, and shed as much blood, and perhaps more. They certainly have not changed, in six months, from patriot? to profiteers

4.9 p.m.

The Prime Minister (Mr. Attlee)

The right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) started his speech by saying that he was going to make a serious survey. I think he did begin, and, for the greater part of hi? speech continued, on those lines, but ! thought he rather departed from it at the end. I must say I was a little surprised, because I gathered that he classed himself among the lively and optimistic people. I cannot say that I saw very much optimism in his speech. I think it was rather excessively gloomy. I am not going to hide our difficulties from the House, but there is no point in overestimating the gloom, and I think the right hon. Gentleman was a little too much obsessed with reading what I call Left Wing papers.

I might retort that quite a number of papers which do not support the Government, might also refrain from a good many things they say which are not helpful. I have noted the right hon. Gentleman's proposals, both with regard to the oratory of the Lord President, and other matters. I do not think he brought all his suggestions actually in line with the evils he seeks to remedy He did not really show that proposals of nationalisation had hindered the progress of demobilisation and reconstruction. With regard to other matters relating to new industries, I can assure the right hon. Gentleman that the Government will pursue those matters in every possible way. We are not sitting by the bedside of dying or dead industries. We are perfectly alive to the fact that you have to stimulate new industries.

The right hon. Gentleman raised other points which seemed to me to belong to a budgetary Debate. It would obviously be out of Order now to discuss E.P.T. or such matters. I did not think he related—indeed he could not in his speech have related—the question of Social Insurance measures and the cost of Social Insurance and social services generally to our all-over budgetary position. They are matters of an internal reallocation of purchasing power. But I am sure he will be able to develop that at a later stage in this Session when we come to the Budget. I am glad the right hon. Gentleman opened on broad lines, because we want everybody to look at the major difficulties that face this country. This Debate gives us an opportunity to review the economic outlook, not with wild optimism—and certainly not with deep pessimism—but with realism. The first thing we all have to remember is that our prospects and our plans for the future stand against a background of international stress and strain, of war-time destruction and dislocation, that the shadows that were over the world have been lifted, but have not entirely departed, and that, after all, we are only some six or seven months from the ending of the war. Therefore, we have to see what faces us and consider the spirit in which to face our difficulties. I think that we have to face what I have never concealed—and what I do not think any of my colleagues has ever concealed—the immediate difficulties of the post-war period.

It is a mistake for hon. Members to suggest that either I, or my Party, at the Election suggested that immediately after the war there was going to be a wonderful paradise. I made- about 50 or 60 speeches, and 1 can assure the right hon. Gentleman that in every one of them I stressed the fact that the period was going to be a very difficult one, and I believe my colleagues did the same. We have to rebuild our physically battered homes, our schools and our factories. We have to restore the normal peacetime life of industry. We have to refill our shops and our homes which have been depleted of their reserves. We have to create an export trade on a greater scale than ever before. We have to fulfil essential requirements abroad, and it is just as well, looking at all these matters, to remember that we have those responsibilities abroad which we cannot avoid. We have to play our part, as well as we can, in restoring the shattered economy of other countries, and we intend to make a good beginning towards the achieving of all this in. the year 1946. No one suggests that all this ruin of six years of war and of many years of neglect before the war can be retrieved in six or 12 months, or even in two years. Today we were asked to concentrate particularly on the manpower problem. Our immediate problem is to try to allocate our limited resources of manpower, materials, finance and foreign exchange so as to try and meet these claims as far as we can. Just as we had to plan in the war to secure the maximum impact against the enemy, so we have to plan in the transition, while shortages continue, in order to make the best use of the supplies we have.

In any review of what is actually happening at the present time, we must remember that we are in a period of transition, a period in which the process of demobilisation is going on all the time. During this winter we have carried out a programme of demobilisation while working on our plans for the future. We have carried out the promises we made with regard to demobilisation. Thanks, I think, are due to all those responsible, the Service Departments and others, that demobilisation is proceeding smoothly. Nearly 100,000 a week are being demobilised, and during January 445,000 were released. Those are very big numbers. Think of the process of demobilisation, of providing for all those people. It is a very remarkable achievement for which we ought to take credit, not for a Government but for our own people who worked out this scheme. We can see in other countries that it has not always worked as well as here. That rate will necessarily decline during the coming months because we tried to speed up in the earlier time, but I think the success of our efforts give a reasonable hope of reaching a target of reduction by December, 1946, provided—one has to mention that proviso—we do not get external disturbances.

At the same time, there has been a great reduction in the number of people working on supplies for the Forces. Between June and December the drop here was by about 2,100,000. That is a very 'big change-over, and I may say that the figure my right hon. Friend gave me for December—not the most recent figure—was 1,790,000 engaged on equipment, but that figure has come down during the last two months fairly quickly. I would say a word on that, because the right hon. Gentleman made it rather a point. It is quite true that it is a very difficult thing to switch over to civilian work from war work all at once. We had to estimate in all cases where there was a great deal of work in hand, whether it was better to finish off that work or scrap it. A great deal was scrapped. I do not think the right hon. Gentleman is serious in suggesting that we should scrap all armaments because of the atomic bomb. While we have Armies in the field we have to keep them supplied. We have to have a certain output of aircraft so long as we have an Air Force. We have to keep a potential running while the world is in its present condition and, although I would like to have seen a speedier run off of munitions, there has, nevertheless, been a very heavy run off of munitions.

We are bringing it down still further to the numbers which were given in the White Paper. With regard to the number of war vessels, I can assure the right hon. Gentleman that, again and again, these were cut. They were looked at in the closest possible way in order that we might not be producing obsolete craft and wasting our resources. There has, therefore, been a great switch over Between the end of June and December the total number of workers engaged in working for export has risen from 435,000 to 920,000—that is, nearly 100 per cent, increase—and those engaged in manufacturing civilian consumers' goods from 2,624,000 to 3,684 000, which is an increase of about 40 per cent. That is an unprecedented rate of growth in the many sections of industry, and no one knows better than the right hon. Gentleman how long it takes to switch over from one process to another—the process of retooling and all the rest of it.

During this change-over it is worth while noticing that in the insured population unemployment has risen from only 75 per cent. to under 2.5 per cent. in January. One has to remember—and I grant it—that there is a lag in the time between men coming out of the Forces and their entering industry. That is due to the deliberate policy of this Government and the Government before if, that people coming back from the Forces should have a period of leave. There is, therefore, a lag, but in all our industries there has been an increase except—and I grant the exception—that of coal. I do not think the House will expect me today to go into the whys and wherefores of the difficulty in the coal industry. We all know what was the position of the coal industry before the war. We know the enormous difficulties through the war of keeping up our labour force. We know that the miners are becoming, comparatively, an aged part of our population, and there is the difficulty of getting young men in. One has to face these facts. If the workers in a particular industry, with heavy work like this, are getting older, we cannot expect to get the same out of them. At the same time, I am not going to suggest that I am satisfied with the output which we are getting now. There has been elsewhere an encouraging intake. My Tight hon. Friends the Lord President of the Council and the President of the Board of Trade will later on give details of individual industries and their particular intakes.

There is one point which is sometimes omitted and which is worth making. I know how hard pressed people are for getting clothing. It is sometimes forgotten how much clothing is rightly and necessarily going to the men who fought in the war. We have this great body of people coming out week by week and month by month, receiving clothing and a not ungenerous allowance of coupons, and if one look sat that in the ordinary course of events, away from the war, one will see that a considerable proportion of the population are getting big outfits. That necessarily means less for the rest. That demand, of course, will tail off as we proceed with the process of demobilisation. There is one misconception I would like to remove. I do not think the right hon. Gentleman made it, but it has been made sometimes, and I know it causes a great deal of trouble. It is the suggestion that we are taking a great deal of the goods which people might be enjoying, and sending them off for the export trade. I do not think that is true. We are not holding back consumer goods. As a matter of fact, out of the very encouraging. total of£57 million in January, the biggest items came from iron and steel—over£5 million; machinery— over£6 million; chemicals—nearly£5 million; vehicles and aircraft—nearly£5 million. But I know it has been suggested to the hard-pressed people that they could have everything they liked if we were not so strong on the export trade.

The right hon. Gentleman quite rightly stressed the importance of the export trade. But the export trade and our home trade have, at the present time, to count on a depleted manpower in a period of transition, when the right hon. Gentleman knows there must be a lag from the time when we get the people back to the time when we get the production of goods. The Government set itself to formulating a working plan for 1946. The right hon. Gentleman had something to say about plans and controls, but, although one may have to plan without having all the data, it is better than having no plan at all. We must make some kind of economic forecast. 'We cannot get certainties, but we can get targets to work to. We can get estimates, but they cannot be quite as precise as in wartime for the reason which the right hon. Gentleman pointed out, and that is why there are controls. We have relaxed a great number of controls and, in particular, we are not directing labour except in certain instances. Over the whole field of labour there has been a great relaxation of controls. I do not believe anybody suggests that the Government should endeavour to control labour in exactly the same way as it was controlled in the war, but we can make our forecasts and guide, as far as we can, industry into the channels which are most necessary in the national interest.

I was glad to see the right hon. Gentleman refer to the Statistical Digest which we have issued, and I think it will be realised that the Government are trying to give this House and the people of this country as much information as possible. I believe hon. Members will find it is a mine of information. It was suggested that it might be a brickfield for the Opposition, who might pick out from it things to throw at us. I do not mind that; they are perfectly entitled to do so. but it is just as well that people should have full information. I remember very well when I entered the War Cabinet that we found there was not, at that time, an adequate statistical survey so that we could see how our munitions and labour and everything were going. The Statistical Office did a very fine work. A number of people took part in it. We gradually got such a publication that we could see at a glance how we were progressing. It was a valuable yardstick., and we are trying to do the same for peace time. This first venture, I hope, as the right hon. Gentleman suggested, will be improved and added to, as our wartime yardstick was added to, and I think it brings together a great many tables and facts which formerly have been scattered in various publications.

We set about reviewing the whole situation, and the first job we had to do was to try to see what our total resources of manpower were; we really embarked on this project in what is really a new way of attacking the problem. We attacked it from the point of view of manpower rather than of finance—our human resources rather than our financial resources. The forecast was that by the end of 1946, through the gradual process of demobilisation and change-over, the total manpower in the United Kingdom able and willing to work—men and women civilians and Servicemen—would amount to 20,000,000. That compares with.20,970,000 in December, 1945, and some: 19,750,000 in 1939. The fall in 1946, compared with 1945 is due to the retirement from industry of women and old people.

The next step was for all the Departments, representing defence, exports, building, home consumption, transport and new industrial development to estimate and state what their requirements would be in manpower for 1946. There again requirements are not so rigid as during the war. Some could give exact figures, or practically exact figures, others only estimates and targets. Then we had to put together the figure of available manpower and the demands of Departments which represent the various activities of the national life and see how they fitted. What we found, of course, was that for what we wanted to do our manpower was insufficient. We then had to set about to see how to cover this deficit. In fact, seeing the amount of cloth available we had to see what kind of a coat we could produce.

The Defence White Paper is an example of what we had to do. Everybody who knows anything of Service Ministries will know that what they get eventually, is never what they ask. There had to be a cutting down, a consideration of what our responsibilities were, and then some drastic cutting down, and that now appears, the December figure being 1,100,000 trained men, and a figure of 500,000 men still working on production for the Services. We should like to get the figures lower, but these have been worked over with the greatest economy, and, as I have said before, it is not a very easy world in many places just at the moment. The number we leave in munitions is the number that is necessary to provide for war- potential. It cannot be run down to nothing. We learned that lesson after the last war. After providing for the Fighting Services there remained the forecast of 18,300,000 men and women available at the end of 1946 for all our civil work for the export industry. That was out manpower. I should say, there is a temporary alleviation—it can only be temporary—of which we are making as much use as we can, namely in the use of prisoners of war from Germany in agriculture and so forth.

Then we had to decide on the allocation. We had to adopt certain principles. The first thing was that many desirable projects put forward, desirable in themselves, desired perhaps by some section, had to be postponed because they had a lower degree of priority than others. They were examined very carefully. Our general principle was, first of all to hold back the less essential schemes; secondly, to push on with those essential to ordinary life or the recovery of industry; thirdly, to hold back in areas of labour shortage; and fourthly, to push on rapidly in areas showing unemployment, that includes particularly those areas that were called "depressed areas "before the war. In those areas, a great deal of war-work was put in, but inevitably with the cessation of war-work pockets of unemployment are beginning to show themselves, and schemes are already completed or approved to provide new work for about 178,000 in those areas, and further proposed schemes will provide work for another 102,500 in those areas. As a consequence of new labour going into those areas, subsidiary occupations will naturally get more busy. Already, 190 new factory schemes for those areas have been licensed, and no are already built or building today. That is an example of she putting into operation of the principles I have laid down.

On certain economic fronts there could be no cut. Housing is to get a very big share of the building labour force. Some of the building force is needed for factories, in addition to which there is civil engineering work. Our target, which we hope to reach by the end of 1946, is 1,400,000 in the building and civil engineering industries. It is a very high target. We may not reach it, but we have had to climb from 722,000 in June, 1945, and already it has been raised to nearly 900,000. The second place in which there could be no cut was the. export trade. The right hon. Gentleman emphasised that, in the White Paper on full employment, the export trade was put in the forefront. In making our plans we have assumed the ratification by the legislature of the United States loan. One has to make some working assumption. We all must realise that if we do not get that loan, the position will be even more difficult than it is today, and we shall have to press on even harder with our export drive. We planned on the basis of the loan. Even when we get the loan, it is not a loan to make us lie back and take things easy. The loan is to enable us to work all the harder.

Our target for the labour force directly engaged on exports is 1,285,000 for mid-1946 and 1,555,000 at the end of 1946. That last figure is 405,000 more than in mid-1939. Already, today as many persons are at work on exports as there were in June, 1939. I will say a word later about the need for increased productivity. It is not just numbers that count. Our target for the total value of exports in 1946,£750,000,000, is again a high one and we may not reach it. Owing to the time lag we shall not get payment for more than£600,000,000. That£750,000,000 target compares ' with£258,000,000 in 1944, and£471,000,000 in 1938. The right hon. Gentleman drew attention to the changes in value, and naturally the volume of exports for this year will earn much less than that amount at the prices ranging in 1938. We have worked exports up to the figure of£57,000,000 recorded in January, to which the right hon. Gentleman referred, and that is not a static figure. We are hoping to increase that month by month as we get more releases of labour and as we get more releases of factories, as changing over industries get into their stride. We shall not neglect that point which the right hon. Gentleman pointed out.

Even when we have done this there is a heavy deficit on our balance of payment. The figure, which I think the right hon. Gentleman used, is that of£750,000,000, which was used during the Washington negotiations. It is enormous even on that basis. That should only mean that everyone must realise the intensity of the effort if we are to get through this difficult time. The natural inclination of us all was to believe that what we considered normal economic life would return automatically at the ending of the war, but the fact is that this country is paying, economically as well as humanly, very dearly for our victory, particularly in the loss of our foreign investment income of which a big share was paid for our food We therefore have to work harder to import the same amount, and it is no use blinking the fact that the foreign exchange position is grim and difficult. Importation from dollar countries will be very hard without the most energetic efforts. Nevertheless, and again I agree with the right hon. Gentleman, ordinary everyday consumption must be encouraged to rise materially in 1946. It is perfectly true that you cannot ask people to work harder if they have not got something coming in as a result of their extra work. That applies not only to people here; we have had constant difficulties in the realm of food, where increased food supplies might be available from some areas if we could only get the consumption goods in. We have had to make special efforts to get consumption goods across to the producers

We have none of us, nor has the President of the Board of Trade, ever taken this grim austerity line. On the contrary, we have merely informed people of the grim facts of the situation, namely, that you cannot get all the things you want immediately. We hope, during 1946, to increase the provision of consumption goods to a point very much above 1945, though certainly below 1938. Figures would be misleading, but our hope is that, on the average, consumption goods will be somewhere about halfway back to prewar standards in 1946. That is an all-over estimate, because it will be found that there are shortages here and there. It is well to remember, too, that there is a better distribution today than there was in 1938. The poorest people in prewar unemployment areas are certainly consuming more than they did in 1938

That is the picture. It is a difficult one; we have a hard time to get through. I have described the plans by which the Government are trying to bring together the manpower resources and the requirements of the nation I have not attempted to conceal the difficulties. They are difficulties we foresaw when we were in the middle of the war; in the last Government we were already planning for reconstruction. The broad fact remains that, whatever we do, there is bound to be a gap between what is desirable and what is possible. However well and carefully the estimates are made, however skil fully plans are made by the Government, our ultimate success in getting through the next two years depends on the active cooperation, vigour and energy of all our people.

We are faced with a shortage of manpower. We must see to it that it is used to the best advantage, and that means a changed attitude of mind. For years before the war we were accustomed to having surplus labour on the market, to having a large amount of unemployment, and the existence of that surplus labour bred in all classes an attitude of mind which must be changed. Less enlightened employers used labour waste-fully; they disregarded modern conceptions of labour management and the provision of amenities. Cheap labour has often been the enemy of technical advance. Historically it is true that it has often been the action of trade unions, in combining and pressing for better conditions, that has made for technical advance. In an era of full employment employers will have to realise that there are not a lot of people waiting for jobs, and those who do not accept proper standards of wages and conditions will go short of labour.

Earl Winterton (Horsham)

The country will then go short of goods.

The Prime Minister

I think not necessarily. Where people find that they cannot get labour they will change their conditions in order to get it. I was going on to say that the workers have also been affected by the existence 0: unemployment. Everybody knows that in certain jobs a man is tempted to say, "When I have finished this job I shall be unemployed." That does not make for full service and work. Therefore, all classes must get away from the old ideas, and realise that we are now going to live in a world of full employment. We must face the tasks of the present era in a new spirit. During the war we all realised the value of every unit of labour. How often in the War Cabinet did we look most anxiously at the very last people who could be pulled out for some form of war service. All that. labour was valuable—it is valuable today.

I think we all realise also that the nation can only be saved if we all do the best we can. If today we want houses, clothes, coal, food, the necessities and amenities of life, we have to realise that we cannot depend on other people doing their best to provide for us unless we are ourselves rendering the best service we can. It was easier to realise our interdependence during the war, and to realise the importance of our job to other people. The complexity of modern society puts us so far away from other people that it is probably difficult for the industrial worker to realise the importance of the clerk's work, the clerk of the industrial worker's, or the farm worker of the town worker's. Many people do not realise the work done in a Government office, but, these people have worked very hard.

I think our motto should be to look first of all to see that we are all doing our own job well, and not always thinking that it is the other fellow who is slacking. My appeal today—it was suggested that this speech should be hortative—to all men and women, is to do their best to serve the country in this difficult time of reconstruction just as they did during the war. I am not making any sectional appeal. I ask employers to make the most economical use of the men and women available. Some people still show a tendency to think that only one sort of man can possibly work for them, but in the war we found that all kinds of people who had been rejected were able to do fine work. There must be a changed attitude on that. We must appeal also to employers to do their utmost in organisation—to use their brains, and to use modem science. If we are short of labour, we must use what is available to the best advantage, and we must also use science to save labour. In the past many people—perhaps quite kindly people—thought it was wrong to introduce improvements because they threw people out of work. I do not think that is true today. We are moving towards a society which makes full use of all its improvements.

I ask the workers of every kind, whether employed in production, distribution or clerical labour, to give of their best. I shall not single out one particular lot of people. There are some whose labour it is easy to measure, to say whether they are doing good work or not. Other people one cannot measure quite so easily. Some are, perhaps, held up as examples of slacking just because they happen to be in the public eye. I also make an appeal to older people to stay in industry during this difficult time. We do not want to think too much in terms of "output per man-hour." [An Hon. Member: "Why not?"] Because there is much work which cannot be measured by that yardstick. I would much rather think of "production per nation-year. "I would like this volume to be studied by people as a record of the progress of the nation towards recovery and as showing their share in it. I should like everybody, whether engaged in State or private enterprise, employer 01 worker, to regard him- self or herself as directly concerned in this task of reconstruction and, as these figures for production come out, to regard them as the score which is being put up by the team to which they belong. should like them to understand that every individual effort has contributed towards reviving our prosperity, just as the efforts of the humblest worker contributed to our victory in war.

National recovery does not depend just upon the numbers of workers; it depends upon securing continuity of work. I am well aware that many people are tired. I know very well the hardships that many are enduring. I know, particularly, how tired and worried many women are, particularly housewives. They have done a great job in the war, troubled with food anxieties, housing difficulties, shortage of clothing and of household goods; but the removal of the material basis of their troubles can only be effected by the work of the people of this country. I also appeal to everyone not to increase those troubles by suggesting that they are easily remediable, and that they are just the faults of the Government, the.employers or the workers. I have no doubt that all three—Government, employers and workers-could do much better; but if they were all perfect, they could not alter the broad facts of the situation as we find them at the end of this tremendous struggle. I am confident that that appeal will not be made in vain.

I thought the right hon. Gentleman the Member for Aldershot was a little gloomy. I am sometimes inclined to be gloomy myself, but I have complete faith in the steadfastness, vitality and resolution of our people. We have great resources—industrial capacity, machinery, plant, skill—adaptability and enterprise. Just as, in the war, it took time to mobilise our full strength, so, in this period of reconstruction, the development of our resources to the full cannot be effected in a few months. I want us all to realise, without distinction of political creed—the restoration of the prosperity of this country is not a party matter at all—that we are all engaged in a campaign for prosperity and that it will mean a tremendous amount for this country, the not for this country alone It will mean a great deal to the world.

I believe that this country did an immense service to the world by its example in wartime. I believe we can do the same in reconstruction. We can show that this old country of ours, with our methods, which you can criticise if you like, the methods of a free democracy, can produce results. I ask everyone to join in a campaign for prosperity.

4.55 p.m.

Lieut. - Colonel Byers (Dorset, Northern)

We have listened to a very moving appeal by the Prime Minister. I am sure that all of us, and the nation, will give to it an adequate and immediate response. I am delighted that we have, at last, had from the Government what amounts to some sort of plan which has been put before this House. I wish we could have had it earlier, but it is important that it should have been made at last. Any Government in modern conditions must accept full responsibility for the economic and social development of the country. That is where the Liberal and Labour Parties are ahead of any other political movement in this country. They accept full responsibility for economic and social development, but that responsibility has not been fully accepted in the past. However much we differ about the methods which we use, we do accept the responsibility. Broadly speaking, one can regard economic development and full employment as the means of building up a sounder system for the people of this country.

If we are to get true economic development, three things are obviously required. The first is a comprehensive plan to guide the resources of private and public enterprise to serve the best interests of the community. The beginning of that plan was explained by the Prime Minister today. The relationship which has to exist between private and public enterprise must be more adequately denned in the near future, if we are to have the best value out of both. Secondly, we must have adequate and flexible machinery for this co-ordination, execution and development of the plan. I do not believe we have it. Thirdly, we must have adequate administrative machinery, which will be entrusted with the development and execution of the decisions of the Government administrative machinery, where the responsibility for decision is delegated to a relatively low level. We want to put an end to the tradition of "Passed to you for approval, please," and "I cannot give a decision on this, because it has to go to a higher level," and so forth. We have had from the Prime Minister today, the first signs of a beginning of a comprehensive plan. I make an earnest appeal that the country should be kept fully informed on how the Government are developing that plan. We cannot possibly afford merely to have an announcement every six months, stating that manpower has been allocated in such and such a way and that social priorities will be laid down in secret session of the Cabinet.

I stress that point. We found in the Army that we got a much better response from troops going into battle, if they knew exactly what was expected of them and exactly what was being done on every side of them. Thus they were enabled to have a clearer picture. That was one of the great changes that was made during the war, round about 1942, when the ordinary private soldier knew what the intentions of the corps on his right- were. I make a plea to the Prime Minister to see that the country is kept adequately informed of how this comprehensive plan is to be developed. Let us have continuous guidance. I am not asking—heaven forbid—for control and direction, but let us have guidance and the fullest possible information.

I believe that the proper relationship of private and public enterprise working for the common good is vital to the future, and I would deplore, with all the sincerity I can command, the attitude which this Government and the Labour Party—in which I have many friends—have adopted so far as nationalisation is concerned.. There is a tendency to regard nationalisation as a punitive expedition on private enterprise. That is not only wrong; it is throwing into disrepute all the virtues of public ownership. I believe in a great deal of public ownership, but it is futile to think we can carry out nationalisation of certain great industries and services, as a punishment for private enterprise. That throws the whole principle of public ownership, with which in many cases I agree, into disrepute. I hope we shall see an end of that petty-minded attitude towards nationalisation and public ownership. At the same time, we have been considering nationalisation far too much. I should like something to be done about private enterprise, and I should like to see something done about monopolies. I am not allowed to talk about legislation now, but I should like to know what the Government's intentions are so far as monopolies are concerned. I believe in public ownership of certain basic industries and certain essential ser vices, because I believe that the Government—that is, the nation—must accept responsibility for these things. I do implore Members of the Party opposite not to throw public ownership into disrepute by regarding it as a punitive expedition to be carried out on private enterprise. It is going to make things much more difficult for us when we are in power. [Laughter.] Hon. Members may laugh—

Mr. Kirkwood

"Hope springs eternal in the human breast."

Lieut.-Colonel Byers

The proper economic development of this country is of vital importance to the people of this country, and I am glad to see the Government have accepted responsibility for full employment. The President of the Board of Trade may laugh, but I would remind him that this is the first Government we have had for 20 years which will accept that responsibility in full. It is a landmark in history. The Government must accept the responsibility for increasing the efficiency of production. We must also, I believe, have a wages policy. That is a thing about which, I think, the Government are very weak indeed. We have now embarked upon social security. These four things, full employment, increased efficiency of production, a wages policy and social security, will give us the chance of developing a nation of which we can all be proud. But all these things are linked together, because social security will break if there is any widespread unemployment. That will break the scheme. Similarly, we must have a proper high wages policy so that people can afford to pay their contributions. We cannot get the high wages we want unless we get increased efficiency of production.

All these things are linked together, and I would ask the Government to give serious consideration to the wages policy. We had a lamentable display the other night in the Debate on agriculture when the Opposition put a series of questions to the Parliamentary Secretary to the. Ministry of Agriculture about a wages policy. Many of us went away with the impression the Government had no wages policy at all. That is a most important point, 'because the Government are 'becoming, probably, the largest employer in the country. Vast numbers are employed in the Armed Forces, in the nationalised industries, in the Civil Service; and the Government will be the employer of the majority of our people. The wage paid by the Government will set the standard throughout the country. I agree if should be a high and a good standard, but, nevertheless, it is going to be the standard; and I believe that the time has come to reconsider whether the old traditional system of settling wages by a wages board is not, perhaps, inadequate to modern times. I do not know but I think it ought to be reviewed.

I believe that if we are not to have direction of labour—and I am glad we are not—then there must be some inducement to get labour to move from industry to industry and area to area. How are we to do that without a wages policy? I do not think it can be laughed off by a Parliamentary Secretary in an agricultural Debate. We have had a statement from the Prime Minister of the sort of plan which is to be developed, but we have not been shown any new machinery which is being institute! to achieve the co-ordination of the various Departments which are to execute the plans. This is a very worrying thing, because if the food Debate showed nothing else,' it showed a lack of co-ordination between the Ministry of Food, the Ministry of Agriculture, and the Ministry of Labour. Certainly to those who knew only as much as Members of the House of Commons did, it appeared there had been a tremendous lack of co-ordination.

The Chancellor of the Exchequer, speaking on the control of investment, said that the whole of the economic development was to be carried out, as to financial control by the Treasury, and as to physical control by the Government Departments. I am wondering who will coordinate these two things. Are we to get any coordination at all? The right hon. Gentleman went on to say that the Government had turned down the idea of a national investment board; that they had gone past that stage, and that it was a matter for the Cabinet and that the Cabinet would accept the responsibility. I submit that it is a farce that 20 tired men, overburdened with departmental duties, can now be charged with the task of coordinating the execution of a comprehensive plan like this. Is it not time we got rid of the old Government machinery, which was designed for Conservative laissez faire, a sort of machinery not geared to the tempo of modern government? Is it not time we had a small inner Cabinet of five Ministers not overburdened with departmental duties, men who, as Sir William Beveridge said in one of his books, have the leisure to think. I am indeed afraid that we have not at the present moment the men in the Cabinet who have the time to think. If anything proves the attitude of this Cabinet towards this matter more clearly than anything else, it is the fact that when the President of the Board of Trade goes to India, the Lord President of the Council is called upon to do his job. They are the only two men in the Cabinet with less Departmental duties than the others, and when one goes away, the other is saddled with additional responsibilities. I know that this is a matter for the Cabinet, but the people of this country are not inspired with confidence that 20 Departmental Ministers, meeting in Cabinet, can coordinate the economic development of this country.

The Prime Minister

Do I understand the hon. and gallant Gentleman to say that the Lord President of the Council has heavy Departmental duties?

Lieut.-Colonel Byers

No, I said that. he was one of the two men who had no heavy Departmental duties; but when the President of the Board of Trade goes to India, it is from these two men who have not Departmental duties that you choose one and give him Departmental duties for a short time. This is surely an opportunity for obtaining two or more Cabinet Ministers—one to do the job of the President of the Board of Trade while he is away; and the other to help with the thinking, if, indeed, anyone is doing the thinking. The Cabinet should seriously consider whether the machinery for the coordination of Government Departments is adequate. I am extremely worried as to the financial side. The Treasury have far too much control, and on the physical control side there is not nearly enough co-ordination.

Finally, if we are to serve the people of this country as they deserve, it is vital that the whole of the Government administrative machinery should be overhauled immediately with a view to doing three things. First, to put first-class people into the responsible jobs. That will necessarily mean that salaries and conditions of service will have to be improved. I am sure that is essential. Secondly, I believe that every member of the Civil Service should be told exactly what his Government Department is doing, as far as broad policy is concerned. I believe that the President of the Board of Trade is one of the few people who is doing that. I do not know whether 1 am correct or not, but I implore Ministers to keep their civil servants fully informed of the broad lines on which Government Departments are to be developed. Thirdly, I should like to see the responsibility delegated so that people can take a decision at a much lower level, with the knowledge that they will be supported fully by the Ministers and the principal civil servants concerned. I would like to see— I would have expected to see from a Labour Government, and a progressive Government— every Minister overhaul his own administrative Department in order that it may serve the country to the best advantage. The whole of our administrative machinery should be overhauled immediately, otherwise it will break, and we cannot afford to let it break. We have tremendous things to do in the next few years. If the Government refuse to overhaul the Government machinery, both administrative and coordinative, and to take a fresh look at these problems, we may well not achieve full employment, and we may land our people in an economic and social mess. That is the last thing which I, as a Liberal, want to see happen to the people of this country. I do not mind about the Labour Party, but I do mind about the people of this country.

5.13 p.m.

Mr. Kirkwood (Dumbarton Burghs)

I listened with great interest to the Prime Minister and also to the right hon. Member for Aldershot (Mr. Lyttelton). Speaking for the engineers, Ican say that they can both rely on the engineer doing his best in the future as he has done in the past. Both the Prime Minister and the right hon. Member for "Aldershot have made an appeal today that the workers should work harder, and that the workers should give of their best. I agree with that; and if the workers give of their best, then there is nothing but the best good enough for the workers. I agree that we must have increased production in every branch of industry. My experience, which goes back over 53 years as a member of my union, is that the engineer is a very valuable worker in this country, and he has rendered yeoman service.

But I am driven to ask myself what happened after the last war. There were posters all over the country. The slogan was: "To get more, the workers must give more. "On these posters were photographs of outstanding labour men, including the president of my own union, Jimmy Brownlie, and Johnny Clynes, calling on the workers to work as they had never worked before. We had Jimmy Thomas, the then political secretary of the N.U.R, going round the country assuring the workers that Britain was on the verge of bankruptcy, and that they would have to accept a reduction in wages. My reply to him at that time was that he could not frighten the working class by talking to them about bankruptcy. The worker is always on the verge of bankruptcy. There is no denying the fact that we did work, and we did produce. What did we get? Well, I know what I and my comrade the hon. Member for West Fife (Mr. Gallacher) got. We got battered down in the streets with policemen's batons, and not only that—we were gaoled.

There are no finer workers under the sun than the British workers. British engineers were thrown out on to the streets by the tens of thousands. We were called on to give of our best and to work hard, and what was the result? It meant the harder we worked, the sooner we were on the streets. Such was our reward.. Wages were reduced to a starvation level; the wages of the Clyde-side engineers were below the level of those of the scavengers of the streets of London. That was all we got for our great effort. We have now produced another type of Government, and no one is better pleased than I am that we have been able to do so. I am a loyal supporter of the Government and I am delighted with the part that they are playing. They are doing exactly what the workers expect them to do, and if they continue to act along those lines the workers will never let them down. They are in there for keeps. We have produced another type of Socialist Government which is all for nationalisation, but I also know that we have the same old employers, out for profit at the expense of the worker. [Interruption.] Although the Noble Lord the Member for Horsham (Earl Winterton) is not as young as he used to be, he may have to work yet—

Earl Winterton

Hear, hear.

Mr. Kirkwood

Only last week we Members of Parliament who are engineers met our executive, and they gave us a report of their interview with the Minister of Supply and his two understudies. Our executive is anything but satisfied with the approach the Ministry of Supply is making to meet the situation today. We are all agreed on both sides of the House that what is wanted today is increased production. We engineers are prepared to do the same as we did in the days immediately after Dunkirk. We are prepared to increase output considerably not for the duration of a few weeks, but for very much longer, on condition that the proposals submitted by the engineering union and endorsed by the trade unions embracing the shipbuilding and engineering industries, are acceptable to the Ministry of Supply. If the best is wanted out of the workers, there has to be a slum clearance of the shipyards and many of the engineering shops, which are a disgrace. That does not apply to all-engineering shops. We have two firms, with which two hon. Members listening to me now are connected, and I have done my best to try to get others to follow them. I refer to Lucas's of Birmingham, and Kendall's of Grantham. But, there has been a very poor response. It will require to be forced upon them as has everything we have which we cherish today, for we had to fight for it from the ruling classes of this country. We want our workshops made more attractive. Just as the worker is demanding a better house in which to live, so we demand that the conditions in the workshop shall be in harmony with, the home life.

When I finished my apprenticeship as an engineer on the Clyde, well over 50 years ago, one was thought to be well blessed if when he got married he had a two-apartment house. The majority of the houses of those days were of one apartment. I would have forgiven the landlords and the ruling classes if they had not known better, but look at my native city There were slums all over the place until we Socialists arrived and cleaned out many of them. Look at the west end of Glasgow and see the beautiful houses that were built by the ruling classes. There were no eight feet high ceilings for the working class. They condemned us to bad conditions, but the advent of the last war and the arrival of Dr. Addison on the scene brought a great change, and we were given a new outlook. We demanded a higher standard, and the change from the one-apartment to the three-apartment house meant that the wife had to get a "three-apartment dress "and a three-apartment hat." The children also required a higher standard of life. The worker today, as a result of what he has seen and experienced, now that his representatives are in control of the country, is demanding an improvement in his standard of living.

When our country was up against it, the rulers of this land were glad to call on my colleagues to assist in the government of the country. They were men who had never had any experience of ruling what is the mightiest Empire under the sun. What has that done? It has taught the worker to see that these so-called Heaven-born rulers are only great as long as the workers are on their knees, but today the workers have risen and are demanding much better conditions. I would like to state the conditions on which engineers intend to enter the campaign for increased production. They are: an eight hour day, a five-day week, and a minimum of£5 a week.

Earl Winterton

Surely, the hon. Member means per day?

Mr. Kirkwood

We want effective workshop committees, which will have a say in all matters affecting their industries. We want a limitation of profits, and all available surplus profits to go back into industry. The Government have a glorious opportunity because, at the time of Dunkirk, the workers of this country proved beyond a shadow of doubt that they are a most valuable asset when they are infused with the idea that they are fighting and working for the good of the community. We must instil into our people, by giving them these conditions, the same spirit of enthusiasm as was shown at the time of Dunkirk. Unless we get a guarantee that those conditions wills be met, then trade union leaders, the men and women to whom the workers will listen, will do what they can to try and meet their obligations, but they will not succeed if the Government intend to go on in the old orthodox fashion and Ministers continue to smile" complacently.

The Government are up against a problem here, because there will be no photographs of Jack Tanner on hoardings, as there were of James Brownlie, to help exhort the workers to give more production. The workers must have a fifty- fifty representation. They are not coming in cap in hand. That day is past. They. are coming in on an equal footing, and. the sooner the Government realise that the better. At the time of Dunkirk, Beaverbrook—

Earl Winterton

Lord Beaverbrook.

Mr. Kirkwood

Well, the Noble Lord; give him any name you like. He, like every other Minister of Supply we have had up to the end of the war, asked me to use my influence with engineers all over Britain in order to increase production. I was delighted to do so. I remember that when Lord Beaverbrook fell foul of the employers in my presence, not once but many times, he told them, "I want production, and if this request "—he always called it a request, and not a demand—" by the workers is not reasonably met you will have to give in to the workers.'' Beaverbrook— [Laughter]—it is no use joking, because the Labour Party sent Noble Lords to me as well. Lord Beaverbrook caught the enthusiasm of that time, with the result that we beat all records. On different occasions we interviewed shop stewards. We believed that that was not the time for wild words, and we got results. It is because of that experience that I believe that, if the Government take the workers into their confidence, and meet their legitimate demands— [Hon. Members: "Requests."]—they will find that the workers will fall into line, and that the trade union movement of this country will use all their influence, which is very considerable, especially with Members of Parliament, to increase production. Nobody has the ear of the workers as we Members on this side of the Committee, and the trade union officials. It is the bounden duty of the Government to meet the just requests of the trade unions.

5.38 p.m.

Mr. Peter Thorneycroft (Monmouth)

The hon. Member for Dumbarton Burghs (Mr. Kirkwood) has spoken with his usual vigour and eloquence. It was a speech we much enjoyed. He shared with the Prime Minister the same desire to see a certain change of heart in the country, and I would not for one moment underestimate the part which the hon. Member can play in bringing about that change of heart. I want to deal more particularly, however, with the speech of the Prime Minister. He spoke, as he always does, in terms of moderation about this great problem. He made an appeal for a new spirit of cooperation, and he emphasised the need for hard work. It has always been open to a Government to make an appeal of that kind on a broad national basis, and to' seek to enlist the cooperation not only of those who supported them at the Election, but even of those who voted against them. It is no use making one isolated appeal in this House. It is necessary that the Government's policy as a whole should be directed on a national basis. If one wants to get the best out of all sections of society, it is better to avoid those issues which are most likely to divide the community. I do not want now to elaborate that aspect of the matter further.

The subject which we are discussing is the real stuff of politics. It is far removed from the kind of fripperies with which many politicians adorn their speeches at General Elections. The question of manpower is the basic one which all parties have to face. It is not merely a party political issue. The shortage of men would set the boundaries to any policy which any party, whether Conservative or Socialist would pursue if it were in office. I do not want to deal lightly with the appeal which the Prime Minister made, but I should be disguising my real feelings if I did not say that the policy of his Administration is wholly inadequate to the problems which he has set before the House.

There are two aspects of the matter. The first question we have to decide is whether we have got enough men to do the jobs which lie ahead of us, not in a short term transitional period, but during the next four or five years. Have we enough manpower in this country to be able to carry out the tasks which lie ahead of us? The second question is whether we are using those men to the. maximum advantage and with the maximum efficiency. If the answer to either of those questions is "No," then we shall be condemned, not for a short transitional period, but for a long period, to a standard of living substantially below that which existed in this country in 1938. We shall live in what will in those circumstances, perhaps inevitably, be a kind of organised slump. That is a very sombre picture. I do not want to be either pessimistic or optimistic, but to try to respond to the appeal of the Prime Minister that we should be realistic. But it is no good having in the House Debates of this kind, in which we merely hear the rival claims of one user of manpower set against the claims of another user of manpower, the claims of one industry set against another, the argument whether we should cut more out of the Forces in order to get them back into industry, the claims of capital against consumer goods, or of the home market against the export market. The hard fact remains that if, in fact, the over-all total of manpower is short, we are trying to do an impossible task. We are trying to make up a jigsaw puzzle in which one of the pieces is missing.

Obviously, in those circumstances, the first task of the Government, which I think the Prime Minister did with some considerable skill to-day, is to prepare some kind of manpower budget. We are all very grateful for the valuable Monthly Digest which has been produced and which enables us to see some of the facts of the problem. But a manpower budget, of course, is not an answer to the question. The right hon. Gentleman said, "We shall have 20,000,000 men available for employment at the end of 1946."He then said that there would be 18,300,000 available outside the Forces, which is an inadequate number. But if those men are merely listed for agriculture, consumer goods, capital formation, and the rest of it, it is still only a paper figure. What the right hon. Gentleman failed to say—I hope some Member of the Government will remedy the omission later—is how, having put those figures on paper, the men will be got into the industries in which they are required. That is the real problem on which we want an answer from the Government.

I hesitate to talk about manpower budgets. It is extremely difficult for a Back Bencher to do so, even with the Monthly Digest at his disposal, but I will try to deal with one or two figures. I understand the position to be this. The Prime Minister said that, at the end of 1946, there will be 250,000 more people available for work than in 1939. There were 19,750,000 in 1939, and there will be 20,000,000 at the end of 1946. The 250,000 is the margin with which we have to play. It seems to me that, against that number, we have already overdrawn to a very considerable extent. Our Armed Forces, estimated now at 1,100,000, would in any event be, say, 500,000 more than they were in 1938. The men employed in the Government service, according to the Monthly Digest, are 315,000 in excess, and I do not think that figure is likely to become less as legislation goes through. Shall I put it at 500,000, when the nationalisation programme is more or less complete?

I understood the right hon. Gentleman to say that the number employed in the export trades would increase by 405,000, but if we are to have the increase in exports which the President of the Board of Trade, very properly, requires, it has been estimated in the "Economist" that, even with a 20 per cent, increase in productivity—and heaven knows, there is no sign of that increase at the moment—we shall need 750,000 more people in the export trade, and for capital formation, building houses, re-equipping the coal mines, and the rest, another 750,000 My addition is notoriously inaccurate, but I work it out as being 2,500,000 against a balance of 250,000. From where are we to get the 2,250,000 that remain? Those 2,250,000 can come only from the people who would normally be making consumption goods in this country. That means that everybody has to be content with fewer consumption goods.

The President of the Board of Trade (Sir Stafford Cripps)

indicated dissent.

Mr. Thorneycroft

The President of the Board of Trade shakes his head. If the Government can show that these men will in some way be available—and the Prime Minister failed to do so—I very much hope they will do so before this Debate is concluded.

Mr. Gallacher (Fife, West)

Is not the hon. Gentleman aware that during the war there were fewer consumption goods than before the war, but that, nevertheless, millions of people enjoyed more consumption goods during the war than they enjoyed before the war?

Mr. Thorneycroft

I do not want to enter into that argument now. If the total number of people making consumption goods in this country is to be 2,000,000 fewer than in 1938, one can dismiss the idea that we are going to have a higher standard of living.

Mrs. Nichol (Bradford, North)

Why?

Mr. Thorneycroft

I will endeavour to explain to the hon. Lady. If there are fewer people making these goods, there will be fewer goods.

Mrs. Nichol

No.

Mr. Thorneycroft

I know there is the argument about mechanisation increasing productivity, but I should have thought the point was reasonably elementary. It seems to me that the real danger of the situation is that there is, in some respects, almost a vested interest in trying to keep that sort of situation in existence. A great many people are very happy to see a chronic shortage of workers in this country. The workers themselves—I do not say this in a critical spirit—will obviously profit in some sense from a shortage, because they hope that the shortage will lead to higher wages. In the present situation even the employers benefit to some extent, because they know that at least they will be able to sell whatever goods they produce. The position has some advantages because they can always come to this House and talk about the difficulties of the people and the shortages which everybody is suffering, and the Government at least have this knowledge, that in no conceivable circumstances are they likely to have any kind of recurrence of that mass unemployment which occurred before the war. They feel, possibly quite rightly, that if they can avoid that at all costs they have a reasonable chance of a favourable verdict at the next General Election. In those circumstances there is a great tendency on all sides to try and maintain the situation in which we have a chronic shortage of manpower.

I know that the hon. Lady and one or two others think that if you have this shortage you can get over it by the introduction of machinery, increasing your methods of production, and so on. I am not going to decry the possibility of increasing production in that way, but I do say that machines are really no substitute for men. In the coal industry at the present moment what we want, of course, is new machinery, but we also want a very great many more men. It is not just putting coal cutting machines at the coal face that is required, it is the driving of new roads, the sinking of new shafts, and I do not think that anybody could really imagine that it will be possible to bring about that kind of reorganisation with the manpower which is at present in the coal mining industry. Moreover, even if the machinery is installed it has to be used, double or even treble shifts may have to be worked, and it has been found, certainly in the United States, that the introduction of machinery leads to the creation of more jobs rather than less.

I want to know—if I right have the attention of the President of the Board of Trade for one moment—what is the Government view about the shortage of manpower. Is it merely transitional or is it permanent? The figures I have put forward would seem to show that it is permanent. If it is, what do the Government intend to do about it? Are they encouraging the Poles to leave this country as the Prime Minister said the other day, and, if so, why? I should have thought that there were in this country at this moment jobs for every citizen here and for as many others as we could conceivably get to come in from outside. One thing that would help the coal industry, as my hon. Friend the Member for East Aberdeen (Mr. Boothby) said the other day, would be 100,000 Polish miners in the pits. I think that would give us the coal we want, not only for our industries and domestic consumers here at home, but for the export trade we so badly need in order to get both food and dollars. I cannot see the sense in complaining in Debate after Debate of a shortage of men on the land, or a shortage of domestic servants, or, as I see in the Press today, that the Minister of Health cannot give a target for the housing programme because of a shortage of men, or that exporting firms have their order books full but cannot get any men to make the exports. I should have thought that, instead of turning men away from this country at the present moment, the policy of the Govern- ment would have been to turn every British Consul in the world into a kind of talent scout. We should try to get these men in, paying their passages to this country, even bribing them to come and work in the mines.

Mr. Mikardo (Reading)

Would the hon. Member please convey this argument, that we ought to be using to the full the aliens in this country, to his Conservative friends in Hampstead, who are conducting a continuous agitation against the presence of aliens in this country?

Mr. Thorneycroft

I do not know that I have any Conservative friends in Hampstead, but I hope that I shall have. If anybody is saying, "Turn the aliens out," then obviously what I have said is the reverse and I should not agree with them. I say, "Keep them in and use them, and get as many more as possible."

I know there is an unhappy history behind the strike-breaking in the Scottish coalfields many years ago, and I am not going back over all that, but I think it could be done much better. This does not seem the same sort of proposal at all. If I introduced the Polish miners into the coalfields of this country I would make every one of them join the Miners' Federation and give that Federation a closed shop. If that were done I do not think there would be the slightest reason why it should depress the standard of living or pull down the wages of any worker in this country.

Major Cecil Poole (Lichfield)

May I ask the hon. Member why he should single out the Miners' Union for a closed shop? Is he prepared also to extend that to every other industry, or, if not, will he say why not?

Mr. Thorneycroft

I would willingly debate the question of a closed shop but it would not be in Order for me to do it now. I was dealing with the particular case of the mining industry and suggesting a means to meet their perfectly reasonable objections.

What is the view of the Government about the Armed Forces? We are told we are to have 1,100,000 in the Armed Forces. It may be brought down possibly in a year or two's time, but in the un certain state of the world—

The Temporary Chairman (Colonel Sir Charles MacAndrew)

The hon. Member is not in Order in discussing the Armed Forces.

Mr. Thorneycroft

Very well, I will leave that subject. I was merely going to suggest that the question should be considered of employing foreign troops to get over the difficulty. I think I should be in Order in saying that the Prime Minister referred to the figure which was to be allocated out of his total manpower budget to the Armed Forces, and to say that J thought that that figure would be an intolerable burden to this country over a long period. I should like to see some steps taken to lighten this by the employment of Polish troops or a foreign legion or something of the kind After all, there are plenty of men in the world today who have no trade but fighting, and many of them would be glad to assist in that respect.

I turn now to the second part of the problem, which is how, having got the men, one seeks to get the maximum efficiency. The Prime Minister made an appeal for hard work. I remember that at the Election the Conservative Party also talked a lot about hard work, but I would remind hon. Members opposite that it is not always a popular cry, for we lost the Election. But then, as the Prime Minister apparently realises now, to lose an election is not necessarily to be wrong. I am not accusing the Prime Minister of this country of having painted glowing pictures of a new paradise in his election manifesto, but one of the difficulties which I would ask the Government to face up to is, that over a period of years the type of propaganda that has gone out from the Socialist Party has tended to persuade people that by some sort of economic trick you could get over the curse of Adam—that in the sweat of thy face shalt thou eat bread. I am not suggesting that individual Members of Parliament go about saying this kind of thing, but the fact remains that there are quite a lot of people in this country, perhaps the more illiterate sections of the electorate, who really believed that, by some miracle in the vaults of the Bank of England or by doing something about the directors' fees, it would be possible to swell the wages of the workers. These things do exist. If we are to change that attitude we have—and it applies to all parties in this country— to co-operate. It is in the interests of all parties; it is a national issue that the principle of hard work should be accepted. Hon. Members opposite believe that, if men work for the State, it is a great and glorious occupation. I say that is a fine idea. I am perfectly prepared to say to a man in. the nationalised coalmining industry, "There you are working in your great national industry with the State behind you. That is a fine ideal and you ought to put your back into it." But cooperation has to be a two-way business. What about the 80 per cent. of industry which at the moment is under private enterprise? Are the Government prepared to say to their supporters in the country, "Stop this ridiculous talk about the evils of working for a profit motive "? If not, it is really rather a waste of time to make appeals in the House of Commons about national approach and co-operation on all sides, and so on.

With regard to productivity, I wish I thought the Government really believed in it, but I do not believe they really have much faith in the idea. Let me take one industry as an example, the dockers. We have just decasualised dock labourers, and the dock industry of this country is riddled with every kind of restrictive practice imaginable. There are cases where you have six men working on a grab where two could be employed, or eight men working on a truck where two could be employed—this in a time of great manpower shortage. When we decasualised the dock industry, some of us on these benches tried to persuade the Minister of Labour at least to have an investigation into these evils and restrictions on output. We got nowhere, and all these practices are going on today in exactly the same way as they went on in the years of 1929 and 1933, or at any period of depression.

With regard to coal, there is a lot of talk about a five-day week and a seven-hour shift. [An Hon. Member: "Why not? "] I do not say why not, I only say there is a lot of talk going on about it. But there is little talk about the need for double-shift working, and if you are to get machines down the pit you have to work them to the maximum capacity. It is no good the Prime Minister saying that the ageing labour force in the mining industry is the cause of the trouble, when we have been told by the Minister of Fuel and Power that, in fact, more young men are coming into the. industry than old men are going out. It must be a labour force which is getting younger; you cannot have it both ways. In all these things it seems to me the Government are approaching the matter with the same outlook that perhaps any Party might have approached production in 1933.

Mr. Kirkwood

Before the lion. Gentleman leaves that point, will he explain just what he means by running the mines at double-shift? Where can we get the men to run that double-shift?

Mr. Thorneycroft

I have just explained that you want to get some Polish miners into the mines. That is one answer.

Mr. Gallacherrose—

Mr. Thorneycroft

The hon. Gentleman will have a chance of speaking later. Let me take housing as an illustration of the approach to these things. Suppose there was a really up-to-date town council in this country—I am prepared for the purpose of argument to suppose that there was—which really wanted to get on with the job of housing. Incidentally it seems an extraordinary thing that one should have 40,000, 50,000 or 60,000 people living in a provincial town in this country unable to house themselves; it is an extraordinary verdict on civilisation. But suppose at this moment that town council should say, "Get rid of these difficulties. Appeal for voluntary workers." Then suppose the men came out and prepared the sites; suppose the Boy Scouts started putting up prefabricated houses, suppose the W.V.S started making the tea, instead of the building labourers who number one for every two skilled workers. Suppose that approach was tried, what a shocking thing it would be, a violation of building labour and all the rest of it. I know full well what is the reason for the Government's difficulties in this matter. The basis of their policy really is fear; they are afraid of going back to some sort of mass unemployment and, because they are afraid of unemployent, they do not want any extra men in this country. They do not want to run any risks, they are frightened. They want to perpetuate at all costs a condition of chronic labour shortage, even though it means a steadily declining standard of living in the process.

If we do that, what we are really doing is to try to tackle the problem of 1950 with the ideas and policy and outlook of 1930, and I think we are doomed to disaster if we follow that course. I am not prepared to see this country slide into a kind of steady, respectable decay. I feel that we on this side of the House should not be prepared just to sit back and watch, without some kind of protest, appeals for productivity being made on the other side when, in point of fact, hon. and right hon. Gentlemen opposite are always prepared, every day and every month, to sacrifice the larger hopes of adventure and expansion and enterprise on the altar of their own security.

6.7 p.m.

Mr. Cobb (Elland)

It is a matter of some regret to me, that I do not see the right hon. Member for Aldershot (Mr. Lyttelton) in his place, because I want to follow him on a few remarks he made in his speech. One thing he said was that we should not pay so much attention to facing the future, we should face the present. I would have liked to ask him, is it not necessary in facing even the present, to do some planning, and in facing the future should we not do some long-term planning? Further, he said that the goods were not available to act as incentives to the workers. The cause, I suggest, is low output per man hour, due to out-of-date plants and out-of-date factories from which it is impossible to get a high output per man hour or use our labour to the best advantage. The third thing he said was that we have not enough exports, and he would like to see them rise still further. I would have liked to inform him that there are goods in this country at the moment, waiting for export, and we are prevented from exporting them, because of the patent machinations of some of the hon. Gentlemen opposite. International patent cartels are, at this moment, preventing goods from being exported from this country, and I would commend this point particularly to the attention of the Government.

I turn to the question of exhorting our workpeople to greater effort and I suggest that this is only a temporary palliative. Will it do any good, and to what will it lead, to exhort them to greater output, in many cases from out-of-date factories, out-of-date machinery and in some cases from places that can only be termed industrial slums? In too many places, they are being exhorted to do this from factories which are still under incompetent management. The workers under such conditions will only treat these exhortations with scorn, while those in efficient organizations—and there are, thank goodness, some efficient organisations in this country—are already on the road to high output. I suggest that the question before us really is the effective use of labour. The hon. Member for Monmouth (Mr. P. Thorneycroft) was asking what we are going to do to get more labour. The answer is the effective use of the labour we have, and if he had worked on the floors of the workshops of this country he would have a better appreciation of that point.

Our total labour force cannot exceed 20 million people in the postwar world and we have to organise these people for the maximum output per man hour. I know the Prime Minister decried too much emphasis on output per man hour. He asked us, if I understood him correctly, to look at the national product, but surely the national output is the sum of all our individual outputs per week or per month or per annum. Therefore I do net apologise for mentioning the question of output per man hour. Is it not a fact that the output per man hour in many American factories, is double that of factories in this country? Do not let us forget where the responsibility for this lies. It lies with the industrial and political leaders who are represented on the benches opposite and who led this country for the 25 years preceding the war. They have no right whatsoever to talk about misuse of labour. Their ideas were based on cheap labour, the unemployment pool and out-of-date machinery. There is an old Yorkshire saying of which I am reminded every time I look at the Opposition—" Clogs to clogs." The hon. and right hon. Members opposite are the living epitome of that saying. Their grandfathers fashioned the workshop of the world, but those of the present generation all but put it into liquidation. That is what we have to put right, and we are expected to do it in six months—this mess they got us into over the past century.

We have to reorganise our resources to make the greatest use of our workers. To this end I would commend to the Government three things. We may have the best workers, the best technicians, the best factories, the best plants but we will not get efficient output if the management is bad. There are far too many managements which are not so goad as they should be. We have to promote the best man for the job. I would like to see more men promoted from the floor of the shop, men who know the job from A to Z. That has not been done by supporters of the party opposite and their industrial associates to the extent to which it should have been done.

Air-Commodore Harvey (Macclesfield)

I should like to ask the hon. Member, was he promoted himself in the firm in which he worked in recent years?

Mr. Cobb

Yes, as a matter of fact I was, but largely due to my own efforts and no great thanks to private enterprise. I know a little more than the hon. and gallant Member may imagine about the methods of private enterprise, and if he would like to challenge me on it, I will tell him a few more things about it. We should cut out nepotism in industry. I would like to see production made a profession and a more progressive attitude adopted to new methods by the right hon. Gentlemen and their industrial associates. I would like to see a more progressive attitude towards new plant and machinery, towards research and towards special training for management. I question whether it would not be better if some of the directors sitting on the opposite benches did not see that their managers were chosen to a great extent from people trained in the universities. I do not want to see too much of that but it should be given some attention. Many of these problems are in the hands of hon. Gentlemen opposite and their industrial associates and it will be very difficult for us to influence private industry to the extent which is necessary to put these things right.

I would also like to see improved relations between labour and management and better training of our workpeople. The question of incentives should be dealt with. We are living in a new world in which we have to face up to full employment and its problems. We want new thought and new study of these. I desire to see workers taken into the confidence of the management to a greater extent and the encouragement of our workpeople to make suggestions. Those suggestions should be given better attention and consideration than they have some- times been given. I want to see team work in the factories developed to a greater extent, but I will admit that labour must operate the machinery which is available to the optimum output possible. Our standard of life depends on an increased output per man-hour and labour and management have to work together to this end.

Thirdly, I would commend to the Government in tackling this thorny and difficult problem the need for more scientists and technicians in industry. This would lead to something which in the past has been neglected to a great extent. More applied research. With additional, scientists and engineers better methods would be worked out and adopted, for it is on these people that we have to rely for better methods We have to depend on more scientists and engineers for better plant and machinery. I would like to see more technicians on the floor of the shop. I do not want to see trained technical people coming into industry and being poked into offices. I would prefer to see them actually working in the shop at practical problems. That is where many of their problems lie. On the question of provision of scientists and technicians I would mention the increase of foreign control of industry in this country and ask the Government to investigate to what extent it is coming under foreign control. What happens to scientists when a company comes under foreign control? From the capitalist point of view it is very often efficient when this happens and becomes part of an international organisation for research to stop in this country and go abroad. The suction effect by industry on the universities for scientists is thereby decreased, and this matter is urgently in need of investigation.

How can we get more labour for production? I suggest that the Government should look in two places. I am somewhat perturbed about black market operations. I have studied the figures and cannot make them quite tie up, although my efforts at addition are in fact no better than those of the hon. Member for Monmouth. I ask myself, Where are the demobilised Servicemen going? They are not all going back into industry. There is some indication, although I cannot prove it, that they are in black market or grey market operations, while we want them in productive industry.

Major Poole

With all due respect I think the hon. Member for Elland (Mr. Cobb) has made a very serious allegation. I think he ought to give some evidence for a statement like that, which is a very grave reflection.

Mr. Cobb

I am not making any allegations. I am saying that the matter ought to be investigated because it is being bandied about in the City of London. 1 suggest the Government could find some of the labour required for production in distribution. There is not enough known about distribution costs, nor their effect on production. We do not know enough about the effect of this on our living standards. The Tory political and industrial regime kept us in ignorance of these facts. No research has been done on this. For every pound spent in the interwar years on production research and original research we did not spend twopence on distribution. But the indications are that in 1938, out of every four people working in this country, two were producing. It is not strictly accurate to say they were productive, but they were working in factories, or in extractive industries, or in agriculture. But it is a fact that only two of them could be strictly classed as productive. Of the remaining two one was distributing and the other was providing services of one kind or another. The latest complete figures there are on this point are those of 1931, and it is urgently necessary to bring these figures up to date so that we can ensure that for some years to come labour on distribution is kept to a minimum, so that those engaged on production rise to a maximum.

Too large a part of the selling price of goods consists of distribution margins, which leads to high prices, curtailed demand, poor factory load, high production costs and lower living standards. T suggest that the Government have to grasp this nettle of distribution costs firmly. That is where the hon. Member for Monmouth can find a large amount of the labour for which he is looking. Thus we must allocate resources between production and distribution just as we must allocate resources between capital and consumer goods. But the statistics to enable us to do this are entirely lacking. We require scientific methods, as opposed to the old Tory "hunch," which has to go by the board for good and all. We require new vision, new methods and new men. All these are required if we are to bring our industries out of the wilderness of inefficiency into the promised land of high output per man hour, flowing with cheap and plentiful goods of high quality and usefulness We have to increase our output per man hour. On this depends a higher living standard for our people.

6.22 p.m.

Mr. Kendall (Grantham)

I am sorry the President of the Board of Trade is not here as I feel compelled to refer to him many times. I think the whole House will agree that the Prime Minister's speech was one of full sincerity, and everyone will agree that the appeal he made was a genuine appeal for the good of the nation. I think that the nation as a whole will respond to that appeal, and respond very generously. But it seems to me that the Prime Minister might have taken to task some of his Ministers. It is not all private enterprise that is bad; it is not everyone who runs a business who is a bad employer. Yet, from time to time, we find Ministers saying—indeed I have heard the President of the Board of Trade himself say so—that some of the evils of industry have come about because all industries have not been nationalised. He said that the other day in the Debate on the Trade Disputes Act—that there would not have been strikes if we had had full nationalisation, or words to that effect. I suggest that the Prime Minister, in making this appeal, might say, once and for all, how far nationalisation of industry is to go, and when. And if it be true to say that when the present nationalisation programme is fairly complete, there will still be 80 per cent. of the industries of this country run by private enterprise, then for goodness sake let the Government and all its Ministers, encourage private enterprise just a little.

I thank most sincerely the hon. Member for Dumbarton Burghs (Mr. Kirkwood), who paid a tribute to my firm. I say to him that all the time we shall try to do better and better by the folk who work in our factories. But it is awfully difficult, with the various conditions laid down for us by the various Departments, to make progress and really stimulate the production for which the Prime Minister has called. We are willing to do it; we are willing to work harder and harder than ever before, but we want some help, and we have a right to go to the Government, to the Prime Minister and his Ministers who make this appeal, and say, "Help us a little, encourage us. We are not all bad, we are not all wicked, and we can do a job of work. We have done it in the past." I am not talking about monopolies and that kind of concern, but of the rank and file of the employers in the country, the decent people, who are very close to their workers. The hon. Member for Elland (Mr. Cobb) suggested that there is a gulf between workers and employers as a whole. It is not so. I am very close to my employees; so are many other employers.

Mr. Cobb

Will the hon. Member allow me to say that I never made any such suggestion? I said that the two ought to be closer in many factories.

Mr. Kendall

The suggestion was that managements as a whole were very bad. The hon. Member said that on two occasions.

Mr. Cobb

I said that there were too many bad managements.

Mr. Kendall

The fact is that there are many good managements—and certainly more good ones than bad ones.

Mr. Cobb

Question.

Mr. Kendall

The point is that it is always the bad ones who are held up and exhibited. In this new Parliament I have not heard any Member of the Labour Party say any good things about the employing class, except for the hon. Member for Dumbarton Burghs.

Mr. Cobb

If the hon. Member will come up to my constituency, I will show him some rat-infested industrial slums 150 years old, which ought to have been pulled down 100 years ago; and if the hon. Member had been the manager, he would have pulled them down.

Mr. Kendall

There are many employers who would not have allowed such a condition to exist. If the hon. Member would care to come to my constituency and see our factories, I should be glad to show him around.

In reply to the Prime Minister I would say that we shall work as a great team, not one political party against the other, but as folk who mean well, who mean good by our country, folk who will cooperate with the Government in the ter- rible and difficult tasks they have ahead of them. The Government have all my sympathy, because to accomplish many of the things they have set out to do will take every bit of energy and every bit of co-operation they can get from every class and every kind of society in this country. We are willing to do it, but do not condemn private enterprise all the time. Tell the President of the Board of Trade not to say that the final answer for prosperity for England is full nationalisation, wholesale nationalisation. It is a lot of nonsense. If he believes in this as a private individual, very well, but when he makes his speeches do not let him present such views as representing the Government's views, if those are not the views of the Government. If they are, let the Government say that they intend to nationalise every industry in the country. If they do not mean that, let them say to the industry that is to remain in business, "We shall leave you alone, provided you work hard, and we shall help you." Believe me, industry will come along and not disappoint the Government or the country in any way.

6.29 p.m.

Mr. Norman Bower (Harrow, West)

I wish to speak briefly on only one point, which seems to me to be a point of considerable importance, and one which has not hitherto received its due measure of attention, though it was touched upon by the hon. and gallant Member for North Dorset (Lieut.-Colonel Byers). It is the subject of wages. This is the age of planning. I have always believed in a planned economy. I have never believed in the policy of laissez faire. I subscribe wholeheartedly to the sort of planning adumbrated in the various White Papers issued during the last Parliament under the aægis of the Coalition Government. I believe that a good deal of the planning which is being carried out today is necessary and desirable although I also think that a good deal is unnecessary and likely to be harmful. There is one sphere, apparently, from which planning of any kind is to be rigorously excluded by the Government. That is the sphere of wages So long as there is no attempt to evolve some kind of national wages policy, it is inconceivable to me that the reallocation of our restricted resources of manpower can possibly take place on the most satisfactory basis from an economic point of view.

Some weeks ago in a Parliamentary Question I asked the Minister of Labour—I am glad to see the right hon. Gentleman is present—whether he would consider approaching the trade unions and associations of employers with a view to formulating a national wages policy in conformity with the general Government policy of economic planning and with the White Paper on employment policy. He replied that there was no intention of interfering with what he described as the "well-tried system of collective bargaining in individual industries." It is perfectly true that that is a well-tried system so far as the past is concerned. It has probably worked better than any other system that could have been devised, but I would remind the Minister that, as he himself said at another time in another connection, we are today living in wholly different and unprecedented conditions, quite apart from the present shortage of labour, which may or may not be permanent. Nobody seems to be quite certain about that. The point is that it has now become one of the primary responsibilities of government to promote full employment. We as a community have taken it upon ourselves, quite rightly, to create permanent conditions under which there will always be more jobs available than there will be people to fill them. Under those conditions, it seems to me that if wages are still to be fixed by a process of collective bargaining in individual industries, and on a scarcity basis alone, without reference to any kind of overriding principle, without making any attempt to keep the unsheltered industries, for example, or those industries which are essential in the national interest, in step asregards their wages and conditions, with the sheltered industries, or with those which are less essential in the national interest, then it is hardly conceivable that it will be possible to guide labour into the right channels without employing some form of compulsion.

The Temporary Chairman

I do not think that could be done without legislation.

Mr. Bower

With great respect, I suggest that legislation is not required for the kind of policy' I am suggesting. It would be possible to formulate a wages policy for various industries by negotiation, as I am hoping to show, by persuading people that it is necessary. I say this with great respect. I should not have thought that any legislation was required.

The Temporary Chairman

The hon. Member referred to the guidance of labour into the right channels by compulsion.

Mr. Bower

I am only suggesting that labour is not likely to go into the right channels, unless conditions in essential industry are made sufficiently attractive. In my view that can be done without legislation. I was going on to point out that the President of the Board of Trade said a little while ago that there was a distinct reluctance on the part of labour to go back into certain of its pre-war occupations, some of them of an essential character, such as, for example, the cotton spinning industry. I know that whenever any one on this side of the Committee talks about wages he is suspected of wanting to keep wages down generally. Nothing could be further from the fact. My point is that wages in the essential industries must be made more attractive, if necessary perhaps at the expense of wages in the less essential industries. In other words, one section of workers, particularly the most essential section, must not be compelled permanently to subsidise another and possibly less essential section.

Everywhere today in industries which are engaged on producing essential goods or performing essential civilian services, there is the same cry—lack of labour everywhere. It seems to me, now that so many people have already been released from the Armed Forces and the munition industries, that cry cannot be entirely due to the fact that there is no labour anywhere available. There are, of course, many people who are still not free to resume their ordinary normal peacetime occupations. We also have to remember, as the Prime Minister has reminded us, that before the war we were frequently carrying as many as 2,000,000 unemployed. That represented a considerable wastage of our resources, which does not exist at the present time. Although I personally would not be prepared to endorse the suggestion made by the hon. Member for Elland (Mr. Cobb), that many of these ex-Service men and others who have been released, are going into the black market, I suggest that the reason for the scarcity of labour in some of the most essential industries is partly to be found in a reluctance on the part of these people to go back into the jobs where they are most needed.

1 can understand the unwillingness of the Government to tackle this problem,. because any interference with the present method of settling wages in the various industries must, to some extent, presumably, weaken the position of the trade unions in that particular sphere. I suggest that, in this age of comparative enlightenment, there are many even more important functions to which the trade unions can turn their hands, such as, for example taking an increasing share in the direction and control of industry and working out, in co-operation with the employers, a policy for increased efficiency and greater production. I therefore urge the Government not to be intimidated by any instinctive 01 initial reaction on the part of either the trade unions or the employers,' both of whom, I feel convinced, can be brought to see reason in this matter if the issues are clearly placed before them.

The only alternatives that I, personally, can see to some real attempt to hammer out a national wages policy, are either permanent shortages of practically everything which the people most need, or the permanent retention of the Essential Work Orders and the direction of labour. It is, of course, grossly unfair and highly unpopular to prevent a man from doing a highly paid job that he wants to do, and to force him to do a much less highly paid job that he does not want to do, simply because he happens to fall into a certain industrial category. I foresee, however, in the absence of some more skilful form of planning in this respect that this highly undesirable type of control will, perforce, become a permanent feature of our peacetime economic system. Therefore, in conclusion, I earnestly urge the Government to think again about this matter and to approach without any further delay the two sides in industry, with a view to evolving a wages policy based on scientific and carefully thought-out principles.

6.39 p.m.

Major Cecil Poole (Lichfield)

It was my intention, like other hon. Members who have taken some figures from the Statistical Digest already quoted, to frame my speech around it. But as one who has a great love of figures, I know full well that figures can be made to mean almost anything that one wishes. Moreover, a number of hon. Members seem to have got into considerable difficulty in this Debate with figures—the hon. Member for Monmouth (Mr. P. Thorneycroft) in particular. I do not think that, in a Debate as wide as this, we can prove very much from those figures, so I have discarded those things that I wanted to say from a purely statistical angle, and instead I propose to raise one small point—small, perhaps, in relation to the whole Debate, but one which is of some importance to the people of this country in relation to the question of getting them back to a larger measure of production.

Before I do so, I would like to refer to two points made by the hon. Member for Monmouth. We always enjoy listening to him, and we are all fully convinced of the deep sincerity with which he speaks in this House. He said one thing, however, which amused me. He said the Tory Party lost the Election because they talked of hard work. I think that is probably true. We, on this side of the Committee, are fully convinced that we won it because we did some hard work. There is all the difference in the world between talking about hard work and getting down to it, and the difference between the two is largely the difference between the approach to these problems of the hon. Member for Monmouth and of some of us on this side of the Committee. It will be conceded by every hon. Member that there is a greater body on this side who have really done some hard work, and, on the other side, a larger proportion of hon. Members who know it only because they read about it in "The Times." I do not make that remark as a reflection on the hon. Member for Monmouth, because I believe he has done quite a lot of hard work in his lifetime. The hon. Member said that the Government's policy was based on fear. Well, it is not, but it would be excusable if it were, because there are so many people on this side who know exactly what unemployment meant to so many homes in this country in those dark years following the last war. Therefore, we could be forgiven if we really had made a very guarded approach to this problem, and if we went very carefully, so as to see that nothing was done which might make it possible again for that awful spectre of idle hands and homes stricken by poverty, to become a feature of our national life.

On the subject of dividing up the available labour strength, the hon. Member addressed to us, on this side, one question. He said "You will want so many men here, so many men in that industry and so many in the other industry. How do you propose to get them there?" It is said that anyone can ask questions. I invite the hon. Member, and I will give way if he wishes, to tell us how he would propose to get them there. It is easy to ask "How will you do it?" I remind the Committee that the only industries in which there was a shortage of labour were those in which conditions were appallingly bad. As soon as we remove intolerable conditions of work, and make conditions of employment decent, running them parallel with conditions in other industries, we shall have no difficulty in getting men to take employment in those industries. It is the most fantastic suggestion that we on this side desire that there shall be created a permanent labour shortage in this country. It is far more fantastic to suggest that, than it is for us to suggest that many hon. Members on the other side were very pleased to see a surplus of labour in order that it might be used in the bargaining for conditions of labour. I think it is equally preposterous to suggest that, at this period, with over 2,000,000 men remaining in the Services, we should invite people from all the countries in the world to come here and take the jobs of those men before they come out. It is a monstrous suggestion, which I hope the Government and hon. Members on this side will not consider for a moment. When our own men are back and established, we will always be prepared to consider it, and it has always been our policy, and the policy of a Tory Government under pressure, to let others seek employment in this country. But many of us remember the refugees of Nazi Germany, clever doctors and scientists, who were not allowed to work, and some very clever women, also including doctors, who were not allowed to take up employment. The record of the hon. Gentleman's party on the employment of aliens in this coun- try is not one that commends itself either to me or to this House.

Commander Galbraith (Glasgow, Pollok)

The hon. and gallant Member will be alive to the fact that the hon. Member for Monmouth (Mr. P. Thorneycroft) made his case that there was going to be a shortage of labour, and it was from that point of view only that he was arguing. He was not suggesting for a moment that foreign labour should be brought into this country, but only that the shortage had been established, and it was necessary to remedy it.

Major Poole

I am grateful for that intervention, but I must disagree. The one specific suggestion which the hon. Member for Monmouth made was that the Polish Forces in this country should be allowed to take up employment, not at some distant date, when we found we were short of labour, but tomorrow morning. I appreciate that he was not making a point about some anticipated shortage, but I think all his argument was based on something completely hypothetical.

Mr. Osborne (Louth)

Would the hon. and gallant Gentleman allow me? Does he think that, in agriculture, we should not use the Irish labour which comes over here year after year, when we get rid of the prisoner-of-war labour?

Major Poole

I am not suggesting any such thing. That is quite an extraneous matter, and in any case, the Irish, to us, are not aliens in the accepted sense of the word. They come from a part of the Empire, and perhaps that is something which the hon. Member has forgotten. I think the speech of the Prime Minister today was a sober, honest approach to this great problem. In fact, I was reminded by it of a speech which hon. Members of this House heard some years ago from the right hon. Gentleman the Member for Woodford (Mr. Churchill). The speech of the Prime Minister today seemed to be the counterpart of that "blood and tears and sweat" speech of the right hon. Gentleman the Member for Woodford during the war This was the "tears and sweat "speech of the interim period between war to peace. There is no need to tell the people of this country that they have to work hard to get through this period. There is no need for hon. Members on the other side to tell them that. It is fantastic to me, and this Debate seems unreal, viewed from this angle, that we are only eight months from the end 01 the war. The war is hardly round the corner, and yet representatives of the party opposite talk as if the new heaven and the new earth ought to have been created in those eight months.

I wish to reinforce a point made by a previous speaker, and in that connection I would put this suggestion to the Government. The people know they have to work, but they are not working to the maximum. What is the difference? I venture to suggest that the psychological approach of the Government to the people of this country is wrong. I also venture to suggest that every time my right hon. and learned Friend the President of the Board of Trade stands up in this country and makes one of his austerity speeches, there is a downward reflection in the production of this country. I would appeal to the Government to cut out this austerity talk; The people know; they do not expect beer and skittles or any easy path to the new heaven and the new earth. They know of all the grimness. I suggest to the Government that they should point out to the people the brightness that is going to come, the really better future and the greater measure of security coming to them, instead of continuously telling them that they cannot have an extra tablecloth, or an extra tea cloth. It would be a much greater contribution to increasing production. People are expecting a gradual improvement in the availability of essential things, and one of the items in the Government's policy is that the maximum use should be made of accumulated stocks. I challenge the Government to prove that they are making the maximum use of accumulated stocks. I believe they are inflicting upon the people of this country a larger measure of austerity than is necessary, and that there are, in the accumulated stocks, an enormous quantity of goods which could brighten the way for the people.

In support of that view I want to quote two illustrations. Although I quote them only in their local application they have their parallels throughout the whole country. On 14th February I addressed to the responsible Minister, the right hon. Gentleman the Home Secretary, a Question based on requests coming to me from constituents of mine who were fulfilling important functions in industry and the professions—doctors and nurses—who were without transport and who wanted cars to get to their jobs. I asked the Home Secretary whether he was aware that in Region 9 the National Fire Service had many motor vehicles surplus to their requirements which had been standing in the open all through the winter. The reply I got was: Owing to the shortage of covered storage space, it is unavoidable that large numbers of these vehicles should be stored in the open, but, so far as is practicable perishable parts are removed beforehand. My Department notifies all surplus vehicles to the Department responsible for the arrangements for their disposal."—[OFFICIAL REPORT, 14th February, 1946; Vol. 419, c. 134.] That reply is a thoroughly dishonest one, and has no relation to the actual facts of the situation. I took it upon myself to inspect the vehicles, and I want to tell the Committee and the Government what I found, because this sort of thing is being repeated in every region. I am speaking now only of Fire Service vehicles. I found 265 vehicles—cars, lorries, a 31-seater coach, Austin 8's and 10's, Hillmans, Morris's and Fords—not a single one of which had done over 50,000 miles, which were fit for the road when placed on the dump 12 months before, and were now growing into the ground. There were brand new spare wheels, tyres and bulbs. To talk about making the maximum use of accumulated stocks in such circumstances is absolute nonsense. In this one dump—

Mr. Paton (Norwich)

If the hon. and gallant Member will permit me, I should like to ask whether he says that these vehicles were placed on the dump 12 months before and whether, having lain on the dump for 12 months, he says they were still serviceable vehicles?

Major Poole

No. What I said was that every car, when placed on the dump, was fit for the road.

Mr. Paton

They had been on the dump for 12 months?

Major Poole

They had been there the whole of the winter. The site is at Sutton Coldfield and I hope the Minister will send somebody there tomorrow morning to inspect it. There are four such dumps in Region 9 and there are 12 regions, so that it is a safe estimate to say that there are 12,000 National Fire Service cars available, which the ordinary man in the street could have tomorrow. They have all deteriorated by probably£100 whilst on the sites. The Revenue has lost that capital, and the man in the street who cannot get a car to go to his work passes the dumps and says, "I wonder why." Why should people be deprived of such stocks? But that is not the whole of the story. I addressed another Question, on this occasion to the Minister of Works, and asked him why his Department had issued instructions to Region 9 for the destruction of serviceable fire extinguishers which were in great public demand, and whether he would make the articles available to the public. The reply I got was: Extinguishers of the type referred to are subject to deterioration "— and I want hon. Members to take particular note of this— which is not readily apparent. In view of the very large production during the war it has been decided that it would be wrong to sell to the public any extinguishers which have been subject to the risk of deterioration or, alternatively, to incur the expense of testing and reconditioning."—[OFFICIAL REPORT, 14th February, 1946; Vol. 419, c. 161.] Again, I suggest to the Department concerned and to the Committee that that is a thoroughly dishonest reply. There has never been any attempt by the Department to examine the stores or to segregate them. I took a representative selection of 24 extinguishers out of 750 and every one was in perfect working order. The Department's instructions are to destroy them. They are not extinguishers subject to deterioration at all; they are the Pyrene type of extinguishers. They were purchased at a cost of not less than£3 each and in Region 9 alone there are 750 of them. Every motorist in this country would gladly pay I0s. or more to purchase one. This is not making the maximum use of our resources.

Even that is not the end of the story. All through the winter I have been badgered by farmers and agricultural labourers asking whether I can do anything to induce the Board of Trade to let them have some rubber boots. I have sent every letter I have received on the subject to the Board of Trade, and back has come the reply that they are very sorry, but the position is so acute that there are no rubber boots to be had. What. do I find? I will take any hon. Gentleman with me tomorrow and show him 8,000 to 10,000 pairs of brand new rubber boots, which have been declared surplus to Fire Service requirements ever since the end of the war. There are 12 regions, and it is a safe assumption to say that there are 100,000 pairs of rubber boots languishing in stores. They are taking up storage space, often in factories which have been taken over and which ought to be going back into production, but which are being used to store rubber boots which farmers and farm labourers require in order to get on with their work.

I also found, neatly stacked, 200 ladders 17 ft. 6 in. long, extending to 30 ft., of which farmers and fruit growers would be very glad. They were being sold to those people, but the sale was stopped because, I understand, the trade objected. I ask the Government: What is the trouble? Why are you destroying Pyrene fire extinguishers which people need? Is it so that the manufacturer may have a free field and an open market, and so that these articles shall not depress the market? Why are the Government hoarding ladders and other things which people want? Why are they keeping in storage rubber boots for which the people are loudly clamouring? Why are they letting good cars—1938 Morris eights and tens— deterioriate on this dump to which I have referred?

I should also have mentioned a number of fire tenders which would be most valuable to industry, and not one of which has done more than 3,000 miles; yet they too are growing into the ground. There are 5,000 pillows in the same stores. True, they have been used, but they have been thrown into a heap and there is a pile up to the ceiling of 5,000 of these pillows which only need processing at the cleaners, in order to be made available to the public. It makes this austerity talk, which we read in our Sunday papers, seem a little ridiculous. The trouble is that many of the people in this country know these things. They know these stores are available and that they are languishing in storage. We are losing in production because, on the one hand we have a Minister appealing for austerity and, on the other hand, the people know there is no need for it. It does not help people to be contented and to give of their best if they know, for instance, that although they cannot buy curtain material because the coupons do not run to curtains, if only they could afford to pay£50 a window, they could have all the best curtaining they needed. In the shops and stores there is heavy curtaining for the rich. It works out at about£50 a window. I worked it out for my wife because we wanted curtains for our dining room and lounge windows. We have decided that we shall have to carry on with the curtains as they are and as they have been through the war. Also, if one can pay the price one can now get tablecloths. The poor and the middle class cannot get tablecloths, but the people who can pay an unlimited figure can have them.

So far, I have only dealt with the stocks of National Fire Service stores. I now want to ask the Government whether they have examined their Service stocks of blankets and sheets and articles like that which were accumulated for an Army exceeding 5,000,000 men and which will be down to 1,500,000 very shortly. I want to know if they have examined these and, if so, with what result; and when are we likely to have much of the Service stores which are available in Service Departments? I apologise for having taken up so much time, but I ask the Committee to realise that the picture which I have drawn affects only one small region in this country. It is a picture which is paralleled and duplicated time and time again, throughout this country. It is no wild statement because I ascertained my facts before I came here. If the Government have, as part of their policy, the full use of accumulated stocks, they must look at their records of storage, get some of these things out of store and make them available to the people. That will be one large contribution towards the uplifting of the morale of our people, and the increasing of our production.

7.5 p.m.

Mr. Spearman (Scarborough and Whit by)

I was rather depressed by that part of the speech of the hon. and gallant Member for Lichfield (Major Poole) which referred to the manpower position. I thought he was speaking in the spirit of restrictionism rather than in the spirit of expansionism. He said that the amount of wealth and employment available was limited and that, like a pot, the more that was taken out the less there was for others. But surely he knows that the limit to wealth is the amount of labour and organising genius which we can put in, and the more labour we can get, the higher the standard of living in this country. I hope the Minister in reply will make it clear that the Government do not accept the old-fashioned restrictionist view expressed by the hon. and gallant Member for Lichfield.

The first task in home affairs for this Government is the unwinding of the war machine. Under war conditions, in such a war as we have been engaged in, it was vitally necessary that the State should control all the resources of the country— both human and physical. That in wartime was practicable, first of all because people, inspired a great deal, I hope, by the emotion of patriotism, and inspired perhaps by the emotion of fear, were prepared to make great sacrifices. It was practicable because the State knew all the time just what it wanted to produce. It knew it wanted guns, tanks, aeroplanes, etc., and it was possible because waste did not matter. The one thing that mattered was speed; speed saved lives. Those conditions are not present today. The people will not work for the State with any greater happiness than they are when they are working for other people. Waste matters a very great deal. We cannot afford the extra cost which was involved in the war conditions. I would not agree that right hon. Gentlemen opposite really know what the consumer wants. They are not infallible in choosing whether we want bicycles, gramophones or what. That should be left to the consumer. Therefore, it is vitally necessary to unwind this war machine as soon as we can.

A great deal of the time of this Parliament and a great deal of the energy of right hon. Gentlemen opposite, which, with all respect, must be limited, has been devoted to long-term projects of the nationalisation of the Bank of England, the control of investments, the nationalisation of coal and the repeal of the Trade Disputes Act. All those plans, whether they are good as they think, or bad as we think, are not going to have an immediate effect on production. I believe the people of this country, of all parties, want at the present time above anything else an abundance of the necessities of life and perhaps a few luxuries. I do not think this pre-occupation of the Government is getting that conversion from war to peace which will give us that abundance which is so much wanted. The present state of affairs leads to scarcity. I have heard a number of hon. Members opposite today deny that, and say that scarcity does not matter because the standard of living has gone up, but I would point out that scarcity breeds inflation and inflation produces not only terrific dislocation but also great social injustice. It destroys the value of people's savings, old age pensions, payments to war pensioners and so forth. The ideal safeguard against that is to increase production, and that really depends upon manpower.

My hon. Friend the Member for Mon-mouth (Mr. P. Thorneycroft) gave us his idea of the manpower budget for 1946, and I am going to be still more brave and give the outlines of one for 1950, based on the very interesting article by Mr. Barna in the London and Cambridge Economic Service. Supported even by that powerful aid, I realise, of course, that the figures which I shall put forward are mere guesses and I am not confident of any accuracy, but if they could elicit from the Government some, definite statement of their inaccuracy they will have served their purpose, and if the Government cannot say they are inaccurate I think they point to a very dangerous situation. I have assumed a greater increase in the manpower available than did my hon. Friend. I think by 1950, with a high level of employment, we might get something like 500,000 more in the labour market than there were in the war. I have assumed that defence, based on the reduction of the figures in the White Paper, will take 1,000,000 men more than before the war; that is in respect of defence services and the production of munitions.

I have assumed that exports are increased by 50 per cent., with a 20 per cent, increase in productivity. That is pretty optimistic, because we have to face the fact that at this moment I do not believe there is any increase in productivity at all. That would take 750,000 men. For capital reconstruction—under which heading I include industrial reconstruction, housing and deferred maintenance—there must be at least an increase of 25 per cent, of the men employed before the war. That would give 750,000 men. Those three added together, give a total of 2,500,000 or a deficit of 2,000,000 which has to come out of those producing consumer goods. I suggest that, if those figures are anywhere near right, it means that unless we can increase productivity, increase the output per man, we will have the present rationing not for a year or two but for the life of this Parliament. And if the Government commit us to any further expenditure on other sources, we may have not merely this rationing but drastic cuts in it, that is to say much lower rationing than we have at the moment, and for a very long time.

I think it is convenient to put our expenditure under three headings: that by the State and the local authorities; that by the consumers, articles bought in the shops; and that by industrialists, capital re-equipment, houses, etc. If the total demands under those three heads exceed the resources available, quite clearly we spill over into inflation.

The Prime Minister in his thoughtful and moderate speech, such as we always expect from him and for which I think we can truly say we admire him on all sides of the House, gave a survey which I shall study with care tomorrow morning. But I am bound to say that on hearing it I felt he was conscious of a need for something like a Chiefs of Staff Committee such as there was in the war to sort out which plans could be dropped and which taken on. I felt his speech was perhaps rather an apology for the absence of a plan. I had no conviction of there being any coordinating plan showing what resources we had, what demands there were, and how those demands are going to be cut down.

I would like to quote the "Economist." That is a paper which does not go out of its way to be friendly to the Conservative Party, but perhaps does go out of its way to show that it is not unfriendly to the Socialist Party. The "Economist," after giving a list of the commitments to which the Government are already involved, said: Each of these, regarded by itself, it can perhaps afford. But can it afford them all together? That is the question that this Government of professed planners is apparently unwilling to ask, or at least unable to answer. Neither in terms of pounds sterling nor in terms of man-hours will they cast up their accounts. Everything, it appears, is being gambled on a prodigious increase in the national capacity to produce wealth. But the formula of productivity is hard work plus modern equipment. No one in authority will preach the former,"— but they can claim that the Prime Minister has now taken their advice— and the margin of savings needed for the latter is being mortgaged for non-productive purposes. Who could have foreseen that, six months after a Labour Government took office, the chief complaint against them would not be that they are Socialists, but that they have relied too much on laissez faire." My hon. Friend the Member for Mon-mouth made many suggestions as to how the Government could extend the national wealth and thereby beat the fear of inflation. I had certain views which 1 wanted to put forward, but in view of what he said, I confine myself to talking about a wages policy. It seems to me that the absence of a wages policy is incompatible with a Socialist economy. It is vitally necessary not only to demobilise men as soon as possible, but to get them into those industries where they are most needed. As far as I know, there are only three ways of doing that. One is the old way of unemployment, which we are all determined we have left behind; secondly, direction of labour, which we on this side of the Committee at any rate would detest; thirdly, higher wages. We cannot give higher wages, unless there is greater productivity. Hon. Members opposite must learn to face the future. We are in a new age, and they have got to give up their traditional ideas with regard to wage levels. I have heard it said that industrial workers are entitled, inalienably entitled, to higher wage levels than agricultural workers. I hope that will be denied. If not, how are we to attract men into the more unpopular industries?

I will now quote from a very excellent article on the question of wages, because it puts, far more concisely than I can, exactly my views about it: What, then, is the effect of an increase in wages at the present time? The truth is that while extreme shortage lasts wage increases for one section of industry are liable to raise costs of production and be passed on in higher prices to the consumers so that the original increase is at the expense of workers in other sections of industry as well as at the expense of citizens a as whole. And once prices begin going up there may be a general demand for wage increases to meet the increased cost of living, the further wage increases raise the cost of living again, and the vicious spiral is at work. In such circumstances wage increases may even be positively harmful to the community. That is why, from the point of view of the nation, restraint should be exercised about pressing for indiscriminate wage increases. That is not produced by the Right-Wing Press, commonsense though it is. It is produced by the Labour Party research department. Hon. Members opposite are probably very familiar with it. No doubt they had the advantage of me in getting it for nothing, whereas I had to spend 3d. to buy it, but their swelling funds are so enormous, that they hardly want my mite. During this Parliament comparatively few days have gone by without hon. and right hon. Members opposite telling us about their mandate. Time and time again, they have come out with that phrase, that they have a mandate because of the result of the Election. I wondered why they did it, because after all it is not the first time a great Party has won a General Election. It is not the first time a great Party has got a clear majority over all other Parties. I am now beginning to feel that perhaps the reason is they think it will cloak their absence of plans. I must say that last summer I thought it quite possible the Labour Party might win the Election.

I thought that if they did, we should be sure to want to criticise their plans for being bad, but 1 never expected to have to criticise them for having no plans, or inadequate plans. I, like perhaps many people on this side of the Committee, sometimes wish that we lived in the days of our forebears when there was a simpler society: In those days Government planning was not necessary, but now, alas, it is; in this highly industrialised society in which we live we have to have planning; I think one of the best instances of planning was the White Paper on Full Employment brought out: by the Coalition Government. There we had set out a scheme of planning at the top accompanied by freedom below. Unless we have really adequate planning at a high level we cannot get freedom, and we cannot get high standards. It looks to me as though right hon. Gentlemen opposite were going to give us no'- planning at the top and freedom below, but chaos at the top, and regimentation below.

7.21 p.m.

Mr. Gordon-Walker (Smethwick)

One of the things that has most struck me about this Debate so far is the contrast between the two opening speeches. My right hon. Friend the Prime Minister made a careful and sober appeal to the nation which con trasted very sharply with the speech of the right hon. Gentleman the Member for Aldershot (Mr Lyttelton), who made a speech of great, and indeed studied, pessimism containing a thinly veiled threat that we could not count on national unity unless we withdrew the policies which have been approved by the people during the Election. He attacked our long-term policy, and particularly our policy of nationalisation, and then gave a list of industries which were in such a plight that nothing could save them but our policy of nationalisation.

The Prime Minister emphasised the importance, and some of the consequences, of a policy of full employment in this country. I would like to say a word or two about some' aspects of a policy of maintaining full employment. I would say to hon. Gentlemen opposite that we should not be misled by the labour shortage in this critical transition period. Over there, now, they all talk as if the maintenance of full employment was the easiest thing in the world, but the nation will not so easily and quickly forget the experience it had between the two wars, when it was realised that uncontrolled and unplanned capitalism involved mass unemployment. It seems to me that full employment will need skill and planning to achieve. It will be the key to our future. Without full employment our other policies will fail. And with full employment everything else will be added unto us, and we shall be able to solve all our serious and difficult internal problems.

My first point about the policy of full employment is the need to find a way to discuss it in Parliament. We were all very grateful to the Prime Minister for the speech in which he has laid before us today a great array of valuable figures, but I am not sure that such a speech, or such a Debate as this, fully solves the problem of finding a way of discussing this new technique of democratic Government. It will not be easy to do so. The policy of maintaining full employment covers a very wide field. It is not really a question of Acts of Parliament, it is much more a question of administration, foresight, and having an apparatus for collecting and observing figures and statistics. It certainly does not concern any one Minister. My right hon. Friend the Chancellor of the Exchequer in another Debate recently said that these matters of planning must be the concern of the Government as a whole, and, of course, he was quite right. I am not sure—I do not know enough about Parliamentary procedure—how with our present methods there is any way by which a new sort of technique and policy of this sort can be laid before Parliament. It may be that we shall require to have a Minister who opens a manpower budget in the same way as the Chancellor opens a financial Budget. It may be that we shall have to infringe somewhat the doctrine of the secrecy of Cabinet Committees, because it seems to me that the technique of full employment must be conducted through Cabinet Committees. As things are we have, to a certain extent, to go by scattered indications of the Government's policy—straws in the wind. We look for such straws very carefully, and I am very glad to say that there are enough to show that the Government have a full employment policy towards which they are working clearly and consistently. But we ought to find some new technique in this House for debating this new democratic technique of maintaining full employment.

I would like to say a few words about these straws in the wind, these indications of Government policy, and I want, first, to say something about the question as to whether we should have a balanced or an unbalanced Budget. We have been told that the Budget is to be balanced over a few years, instead of each year as it has been in the past. That seems to me to show that the Government are still thinking in terms of a balanced Budget; it makes no difference whether it is balanced over a short number of years or each year. I am very doubtful whether a balanced Budget, balanced either annually or over a short period, is really compatible with a policy of maintaining full employment. Full employment, amongst other things, needs these two things, first of all; it needs some method by which we can catch up the savings which are not invested in real capital—the idle savings of the country, which have been one of the great standing causes of unemployment. And secondly, a policy for maintaining full employment means that you must have some means of increasing and maintaining purchasing power amongst the people. An unbalanced Budget does in fact do both those things, and I am not sure that a balanced Budget can do either of them.

The neatest and most effective way of sucking up idle savings is by State borrowing, and certainly the neatest way of increasing and maintaining purchasing power is for the State to be giving out to the people more than it is taking back out of their pockets. If you are following a policy of maintaining purchasing power and insist on maintaining balanced Budgets, you are all the time frustrating yourself by taking more from the pockets of the people than you are putting back. It might even be necessary to have a number of different sorts of Budgets; a capital budget, a social security budget, and a normal financial Budget, but in the long run it all comes back to the fact— there is no escaping it—that you must have deficit finance if you wish to maintain full employment.

I would like to make one last point on this question of maintaining full employment, which will not only need foresight, planning and an apparatus for collecting figures. It will also need an extremely quick and adaptable system, because however carefully you plan there are unpredictable factors which can suddenly come upon you. I do not think it can be said often enough that one of those unpredictable factors of great importance may be an American slump. The thing that most threatens our internal economy is a slump happening across the Atlantic in America. It is certainly not under our control, and it is only to a very limited extent predictable from the figures at the disposal of our own Government. We certainly cannot guard wholly against the consequences of an American slump, which would, of course, affect our standard of living, but we can make sure that, if it should happen, we shall have full employment in this country even with a lower standard of living—unlike 1931, when we had a low standard of living and mass unemployment.

We can only be sure that we do maintain our policy of full employment under such an unpredictable blow as an American slump if we have a quick means of stimulating capital investment and maintaining purchasing power. The difficulty here is that we have a complex economy that is still largely in private hands; and it is very difficult to make such an economy react quickly to a situation of this sort which has not been fore- seen. It is much quicker in nationalised industries, which are much further under Government control. It sems to me that in addition to all the particular arguments we use in regard to particular industries we want to nationalise, there is also this very important general argument in favour of nationalisation.

Unless a reasonable amount of the economy is under nationalisation, there will not be enough of it to respond quickly when it is necessary to adjust it to unpredictable affairs like an American slump. I think the Government should give standing orders to the boards which will be controlling our nationalised industries to prepare and have ready reserve orders which can be thrown quickly into the balance in order to simulate capital investment should our economy come up against these unpredictable difficulties. I do not doubt that that will be done. It is one of the things, however, that we have to be told about, and it is also one of the things—here I come back to my first point— that we have to discover some means of bringing to the Floor of this House, so that we can have a serious discussion on the subject.

These two or three points which I have made about full employment have been a little critical in some ways of the Government's intentions, as I deduce them. The essential fact seems to me to be that we can make criticisms of this sort only if we assume that the Government have a plan for full employment. It is only because of that assumption that we can make the criticism at all. From all the indications we have, the Government have a plan for full employment, and that convinces me that there is ground for good and sober optimism for our country's future in spite of all the grave difficulties that we are facing. Every patriotic person must rejoice that, at this critical time in our economic affairs, a Labour Government is at the helm in this country.

7.31 p.m.

Mr. William Shepherd (Bucklow)

I listened to the speech of the Prime Minister upon the economic state of the country. As one who has the responsibility of seeing production figures every day, I am wondering what will be the effect of that speech in my factory tomorrow morning, what it will be on the morning after and what the effect will be a week after that. I am not unduly pessimistic when I say I believe the effect will be very limited. The Prime Minister's appeal today is not sufficiently forceful to make people realise the urgency of our position, or do anything to restore the position we have to gain, if we are to put ourselves on to our feet.

If one goes around and asks factory managers what percentage of production they are getting, given constant circumstances, by comparison with 1938, the probable figure given in reply will be 60 per cent. Can we carry on much longer with production at 60 per cent, of 1938? What do the Government propose to do in order to restore production to a higher level? Has there been any attempt today by any Government spokesman to refer to the all-important question of indiscipline in industry? How is it proposed to restore discipline to industry? It can be done by having an unemployment queue, but is that the method which right hon. Gentlemen opposite propose to take, in order to restore discipline in industry? On the other hand, if we do not restore discipline, there will be no increase in production, and the consumer goods which are so badly needed will not be in the shops.

It is obvious to me that there is no hope for this country unless we increase our production well above the 1938 level. What is the most obvious way in which that production can be increased? It is by giving an incentive to production. Surely, it should be the duty of His Majesty's Government to see how far they can relate earnings to production in every conceivable industry. The urgent need is to see that a man gets more as he produces more. That will automatically solve the problem of discipline and also the problem of production. [An HON. MEMBER: "Raise wages."]

The comment has been made that the attitude taken by hon. Members on this side of the House is unduly pessimistic. I feel, on the contrary, that the country is not taking a sufficiently grim view of the situation which is likely to confront us if we go on as we are going now. During the war we piled up enormous loans. We have a decreasing labour force. We have lost a great deal of our market. We have voluntarily assumed a large amount of social service, which has to be paid for out of productive enterprise. We are faced with decreasing production per man hour. Is it not remarkable for the Prime Minister to say that the problem is not a question of output per man hour? Indeed, the whole of this question is one of output per man hour. It should be the duty of the Government to ram that home to the people to make them realise its over all importance.

We have an artificial economy which can be sustained only by an output which is double what we had in 1938. All the hopes that exist in this country of a higher standard of living depend entirely upon a rise in the output per man hour. It should be the duty of His Majesty's Government to use all the resources of their publicity and persuasion to make that fact known to. the mass of the people and to see it realised.

There is a tendency on the part of the Government to discourage private enterprise and, as a consequence, to discourage enterprise. It may well be that the Government's intentions are good, or that they have no evil intentions towards men in industry; we cannot get away from the fact, however, that those who are responsible for conducting industry believe that the Government are, in the main, not out to help them, but are out to discourage them. The resources of the Government in publicity and persuasion should be stimulated towards correcting that impression. If ever we needed men of enterprise and ingenuity we need them today, and every conceivable encouragement should be given to men who can display that enterprise and ingenuity.

We have great need in British industry for better management and better technical organisation. That deficiency has existed because of a number of causes. In 1946 it is no good getting hold of a job, throwing the drawings to the foreman and saying, "Here you are Bob, get on with them." We have to organise, and production must. be more scientific and more complete. The duty of the Government is to make people and managements conscious of the need for better organisation. Let us laud production. Let us glorify the man and the management who do better than their neighbours. That is an attitude we have to get going in this country, if we are to survive. I do not like this talk about manpower budgets. I want to see established the aim of national wealth production. Let us have a target. Let every firm and industry have its target, and let them work up to it. Let them get rewards if they exceed it. Unless that spirit is developed in this country, the high policies and high hopes of the mass of the people will be frustrated. Only through greater output can we have the things we so badly need.

7.39 p.m.

Mr. Lee (Manchester, Hulme)

Too much stress is being placed by hon. Members opposite upon manpower. The' whole basis of our industrial life before the war was the accepted fact that there was a large volume of cheap labour available. I suggest that it is not entirely because of the exigencies of war that we are in our present economic plight. One easily sees that before the war our productivity was fast falling behind that of many of our competitors. It is interesting to "note in the" Economic Journal "for April, 1943, a comparison between the position of the physical output per head in certain manufactures and industries, in the United States of America and in this country. Two or three years before the war, in 1936, coal, based at 100 in Britain, had reached 263 in the United States of America; smelting and rolling of iron and steel had reached 168 to our 100; blast furnace products, 361 to our 100; and the production of motor cars, 419 to our 100 in this country. When we see those figures we readily realise that it is not for us now to talk in terms of driving labour harder, but for us rather to look to the root causes of our falling behind in the economic race. Mr. Batt, Vice-Chairman of the U.S. War Production Board and United States member of the Combined Production and Resources Board recently stated: Even before the war, British industry had fallen hopelessly behind the times. It stuck to methods and tools of its grandfathers' day, and was quite incapable of meeting modem competition. Still less will it be able to compete in the world of tomorrow. For the last five years. British industry has been in a large measure cut off from observing the tremendous strides we have taken in this period, in production methods and efficiency, strides which have left Britain still farther behind in the race of progress. I submit that the only hope of the preservation of the economic life of this country lies in our getting the basic industries of the country in a highly mechanised condition. Mining, engineering, transport and agriculture are now suffering from the neglect of mechanisation in prewar years.

During the Debate, very many useful speeches have been made from both sides. I was particularly interested in the speech of the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton), with many of whose points I agree. But I think he contradicted himself on a very vital issue when speaking about the engineering industry on which he is, of course, an authority. He told the Committee that we were now suffering because we could not get the manpower in the engineering industry; and, a moment or two afterwards, he chided the Government for leaving a vast number of men in engineering, under what he called munitions production. I hope I do not do him an injustice, but I feel that a contradiction of that type should be explained away, or else withdrawn, because there is no difference between the engineering industry and the munitions industry as we know it in this country.

On the question of the reorganisation of industry, one of the basic industries which I feel the Government will have to tackle is the whole transport system, not only for itself alone, but because it can have the most clogging effect on other industries as well. I ask the Government to look very closely at the obsolete type of equipment that the railways are using. I ask them to compare the methods in this country with those in almost every other country in Europe. Are they satisfied that the gauge which is used in this country, and the type of wagon and type of conveyance used in this country, will enable industry to move its products around in an expeditious manner? I know a little about this, and I can tell hon. Members that there are many stretches of line in this country along which large indivisible pieces of mechanical equipment cannot be moved, especially if war traffic is going along the up line. There are stretches of 50 to 60 miles which have to be closed on one line when large pieces of heavy power equipment are being moved. The tendency in engineering is for those indivisible pieces to be increased in weight, and in bulk, and unless engineering can be assured that its commodities can reach the points for which they are intended, and where they are most valuable, it is of no use producing them at all:

Colonel Enroll (Altrincham and Sale)

May I ask the hon. Member if he is really proposing that the whole British railway system should be regauged? Would it not be much more practical to develop road transport a little more?

Mr. Lee

I accept the point that rail equipment is not the only feature of transport, but I think the hon. and gallant Gentleman will agree that, if we are to speak in terms of the modernisation of our railway equipment and so on, we have to decide what our gauge shall be, what the overhang shall be, so that we can move such pieces of heavy bulk goods about the country.

Colonel Erroll

Does the hon. Gentleman realise that the gauge has been fixed not only in this country but in most overseas countries as well, and that regauging our rails would mean regauging rails abroad, or else we should be losing inter-changeability?

Mr. Lee

We have got to get a far bigger overhang. We must realise when we are talking of moving heavier bulks that we must take into consideration the gauge itself. That is the point I was making. I am suggesting to the Government that one of the essential points of reorganisation is this analysis of our basis of transport. We all know fur coats may not be of much use in West Africa, and that unless we can get them to the North Pole they will lose much of their utility value. It is true to say engineering will be severely cramped in its style unless we can assure transport by rail and road for the pieces of mechanism to be used. I should like to know Government policy so far as exports are concerned. It is true to say that the transport system of practically the whole or, at any rate, the majority of the European countries has been seriously disorganised by the bombing during the war. So that very much of our ability to export to the Continent may depend, in the last analysis, on their transport systems when our commodities reach them. Are we prepared to allow to those countries credit facilities in order that they in their turn can import the commodities we can send to them?

The right hon. Gentleman the Member for Aldershot referred to the cotton industry. I do not think that he or any other hon. Member in this House would attempt to tell us that the plight in cotton is due to the war period. We know of the horrible deprivation from which the industry suffered for so long before the war, and I instance this, because I feel that mechanisation or the whole future of mechanisation can be depicted very clearly by it. I again call in aid the gentleman from whom I previously quoted, the vice-chairman of America's War Production Board, who said: Britain could learn something from the United States about textile production for the war effort. Britain, with34 million spindles against America's 22 million, is producing only 7,700 million yards of sorely needed cotton textiles against our production of 10,000 million yards. Why? Because we have upwards of 600,000 automatic looms here, and in Britain you have about 14,000. Britain's production of cotton textiles fell from 7,000 million in 1914 to 1,400 million in 1939—one-fifth as much. Why? Because Britain is 30 years behind in her methods. And this happened at a time when the general world consumption of textiles rose by about 35 per cent. Yet we intend to export 40 per cent, more than we did in the prewar period. How are we to do it, unless we get that basis of mechanisation which they have developed in the United States in such a degree?

Mr. Brendan Bracken (Bournemouth)

Can the hon. Gentleman get the trade unions to agree to the conditions which exist in the United States? Are they in favour of the automatic loom; and is he quite certain that his own party and the trade unions agree with Mr. Batt's description of conditions in America?

Mr. Lee

So far as the A.E.U. is concerned its policy is this: We will help in every possible way to expedite production by mechanisation, but we will not agree that, merely because a new type of loom or machine is introduced, the persons who work, the machines must be dubbed as semi-skilled, because much of the skill has been taken out of the job. We do not oppose the idea of increased mechanisation; we merely oppose the object of employers which is in many cases to dub the workers on the machines "semiskilled" and to pay them lower wages.

Lieut.-Colonel Sir Walter Smiles (Down)

Is it not a fact that the trade unions in Lancashire strongly opposed the introduction of the Northrupp automatic 100m? I saw this loom in America, but it has not been introduced on the same scale in Lancashire.

Mr. Lee

If one went to Lancashire now, one would see many of these Northrupps running in the Lancashire cotton mills.

Mr. Osborne

But not on the same scale.

Mr. Lee

I was asked if the trade unions object. If they object why are they using these machines in the Lancashire cotton industry?

If I may turn to the future of productivity in this country, I would like to refer to what has been largely a wartime development—the production committee idea. I know that it is not wholly a wartime idea. I was a member of a production committee in a large factory in Manchester many years before the war. The more enlightened type of managements take the worker into their confidence because he gives them ideas for increasing production of certain types of orders going through the factory. We have always found that the workers responded very readily to advances of that kind made by the managers. Because of that, I think that the Government would do well to propogate the fact that we are long past the stage when productivity was the function of any particular class of society. We know that during the war period, the workers realised that they had a tremendous stake in the future of this country. I saw during the war, in the factory which I have mentioned, engineers working without any roof over their heads in the middle of winter, and they had the incentive to produce because they realised that they were doing so in the interests of every man, woman and child in the country. I am sufficiently well acquainted with my workpeople to know that the incentive and driving power which brought them so closely together during the war, are still there for the asking, if the Government will harness employers and employees together in the same way as in those days.

It is not quite so picturesque to talk now in terms of production for economic recovery, as it was during the war to talk in terms of production to defeat Fascism. But inside the trade union movement, there has been a great realisation that, having achieved greater power than ever before in this country, they must accept the principle that power in itself begets responsibility, and they are quite willing to accept that responsibility. I hope that the Government will see—if there is to be a new spirit so far as the employers are concerned and one which the trade unions can reciprocate—that we get down to the basis of productivity not by cheap labour but by the expansion of mechanisation in the basic industries of the country.

I feel that I can speak for the whole trade union movement in saying that they accept the basis that we have got to move with the spirit of the times, and that if we are to make possible a 40-hours week and a higher standard of life that cannot b3 done merely by party discussions in this House, but only by increased productivity in every workshop in the country. I know that men and women in industry will accept the point which I have made that increased productivity is the only basis for an increased standard of life, and that they will loyally carry that into effect. I feel that the Government have a big opportunity as well as a big responsibility. The people of the country, especially those in the factories, are solidly behind this Government. I do not wish to make mere party points. The recent by-elections have proved that, despite the rigours of life in these days and the world shortage of food, the people are determined that they will give this Government and this party every opportunity to make good and increase the security and decencies of life so far as they are concerned.

I ask the Government to tackle this job in an imaginative manner, and to insist that employers should not be afraid to spend money on research. So far as the future of the country is concerned a tremendous amount will depend on the research facilities which are granted to industry. I appreciate that there may be industries which cannot afford to expend vast sums of money in research. In those circumstances, I suggest that the Government should aid those industries to the utmost of their ability. I am certain that that expenditure would come back through increased production, and thereby result in a higher standard of economic life. I feel that this debate can do a great deal of good. The speech of the Prime Minister was most inspiring and I know that the men and women in industry will take it very much to heart. I feel that hon. Members on all sides can do a big job of work by going back to the country to preach this philosophy of hard work. Only by hard work can we expect to reap a decent reward. It must be understood that work will be achieved only so far as the Government and all of us are determined to see that the people who do the work, receive the benefit of it in increased standards of life.

8.0 p.m.

Mr. Osborne (Louth)

In the few minutes during which I will detain the House I want to make only one point. The hon. and gallant Member for Lich-field (Major C. Poole) said that the Tories lost the last Election largely because they talked about hard work and knew nothing of it personally, and that the Socialists won it because they not only talked about it but knew about it. The inference was drawn that we on this side of the House have no right to talk about people working hard. I. just want to ask the indulgence of the House to state that I started work when I was 14 years of age at 6 o'clock in the morning for 5s. a week and I have worked hard all my life. Therefore, I can claim to talk about hard work. The Prime Minister made the point—and to me it was a most vital point—that at the end of 1946 there would be something like 400,000 more working in industry than in the middle of 1939. I am delighted to see the President of the Board of Trade in his place, because there is one appeal I would like to make to him. It is not so much the number of people who are working, but the fact that we should do an honest day's work. This country cannot afford idle rich or idle poor. Everybody has to work, and what is lacking- in the country on all sides is willingness to work. That is something we have somehow to get back to.

Yesterday there appeared in "The Times" two letters on the position in industry today. The first letter made the point that the coal output in 1941 was 294.8 tons per man per annum and in 1945 it had dropped to 245 tons; that is 50 tons per man per annum less. I am not throwing any bricks at the miners. I have lived long enough with them to know that they have a very difficult time; but I do know that unless we get a greater willingness to work and to turn out the things we all want to enjoy, the social policy which we all want to pursue will just be impossible. The second letter was written by a miner who had worked 40 years in the pits. He said that the only way to get more output was to offer us something we need more than money—that is food. I commend that to the Government.

The other week the Minister of Food, the Committee will remember, gave us a shock and sent a shudder through the country when he said he hoped he would be able to avoid the rationing of bread, which was the last thing he wanted. I believe it would be a good thing if this country did have bread rationing. I think that a shock about our economic position is what we need. We had to be shocked in the way that we were shocked after Dunkirk when we were really frightened and when we worked hard. I believe the position before the country is this: either we work or we shall starve. It is the duty of all hon. Members to go back to their constituencies and tell the people the truth of the position. The choice before us is either to work or to starve. May I say this to the right hon. and learned Gentleman the President of the Board of Trade? Knowing that he will appreciate it, I will give him the reference. In the 4th chapter of the Book of Nehemiah, the prophet had to face a similar position to the one the right hon. Gentleman is facing now. [Laughter.] It is not something to laugh about. It is very much to the point. After that war had ceased, the prophet found that the walls had broken down, as in London, and that the gates were burned with fire, as in London. After getting the people together and uniting them, the prophet could say to his people: So built we the wall…for the people had a mind to work. That is what we need now. It is the mind and the will to work by the people that are most required.

Many times in this Debate our position has been likened to that of Dunkirk. I believe it is like it. After Dunkirk we found inspired leadership; what we need today is inspired leadership. I think the President of the Board of Trade has had a lot more bricks thrown at him from his own party and from this side of the House than he deserves. He has shown the country the stark realities which we have to face, and he deserves a better reception than he has got. One hon. Gentleman said the present was like the time of Dunkirk, except that there was no blood in it—toil, tears and sweat. The question of manpower is important; but it is more important to get everybody to work. Those who will not work shall not eat. It is our duty to say that, no matter what station in life people belong to, only the people who work. shall eat. [An Hon. Member: "There will be a lot starving."] If we do not work, none of us will be able to eat.

8.6 p.m.

Captain Baird (Wolverhampton, East)

I was rather sorry that the President of the Board of Trade was not in the House when the hon. and gallant Member for Lichfield (Major C. Poole) made the point that our present austere position could be improved if the Government released some of the surplus Government stores which are lying wasting at the present time. Before I make my main argument, I would like to press home this point. I am one of two dental surgeons in the House, and I am worried about the position of dental surgeons who are coming out of the Forces. There is a shortage of dentists in the country, yet the released dentists cannot find work to do because there is no dental equipment. At the same time, I know for a fact that many months ago the Army handed over to the Board of Trade some 250 complete dental outfits. None or these has got to the market yet, and today there are dental surgeons who are unemployed. I am not suggesting that by increasing the.number of dentists we are increasing the pleasures of the population. I want to make the point, however, that there is a tremendous wastage in the country through surplus Government equipment lying wasting.

Perhaps I might now come to my main argument, after doing my duty by my profession. I believe that since I entered the House the relationship of the Member of Parliament to his constituents has been revolutionised. In the past the Member of Parliament was content to visit his constituency once every two or three months, but people today are demanding that their Member of Parliament should visit them every week. Why is that? Because there is a growing desire for political education amongst the ordinary people of the country. The political stature of the man in the street is increasing. He is taking an increased interest in political problems. I have become convinced during the last few weeks that a Member of Parliament who speaks honestly to his constituents will retain their support. Further, I am convinced, from what I have seen, that the ordinary man in the street understands the problems of the Government. He is arguing this way: The Government are giving us social security, and in return for social security, which we never had before, we are willing to remain with our belts tightened and put our backs into the work of production. At the same time, however, we must face the fact that in certain industries there is a drift away from the industry, and a reduction in production. It is one of the anomalies of the capitalist system that the riskier the job, the dirtier the job, and the more unhealthy the job, the less the wage which is paid for it.

Let me give two examples of the drift away from industry. In agriculture and mining the standard of skill required to do the job is just as high as in the higher paid industries. Yet these two industries are looked down on; in fact, there is a certain amount of snobbishness even among the working class on this matter. Even skilled engineers are apt to argue that they should have a better wage than the miner or the farm labourer. Yet the skill required for their task is no more than the skill required for the agricultural labourer's and the miner's task. The drift will not be stopped from the land or-the pits until the standard of living of the agricultural worker and the miner is equal to that of the engineer. I am not suggesting that the engineer's wage should be reduced; I am arguing that the standard of life of the agricultural worker and the miner should be raised to that of the engineer. The dirtier and the riskier the job the more money should be paid for it. The Government must face up to the question of formulating a wages policy for industry.

There is another way, I believe, in which we can stop the drift from basic industries, and improve production, and that is by introducing a system of industrial democracy in industry. We have to convince the worker that he has a stake in industry, and that he is a partner in it. If that is done production will increase, and absenteeism will decrease. Recently, we discussed a Bill to nationalise the coal mines. That Bill will be a model for other Bills to nationalise other industries, but I am sorry the Government did not take the opportunity to state what they believed the relationship of the worker should be to the ownership of the various industries which they intend to nationalise. A definition of the position of the worker in industry would have had a tremendous propaganda effect on production. It would have convinced the worker that he was a member of, and partner in, industry. The Government did not take that opportunity. The worker is not mentioned in the Coal Industry Nationalisation Bill. I therefore hope that the Government will take an early opportunity of stating what they think the worker's position in nationalised industry should be. Someone described the Coal Industry Nationalisation Bill the other day as publicly owned private enterprise.

It is interesting to note that in the only industry which has been nationalised for a considerable time the workers have not been content with nationalisation by itself. The Post Office Workers' Union, a very responsible trade union, published a pamphlet before the Election, which argued that nationalisation, by itself, is not enough. I would like to read a paragraph from that pamphlet. It states: Let us assume, for instance, that the country decides that its vital industries shall be taken out of the hands of the shareholders, and set to work for the people. What then? Would this people's ownership give us democracy in industry? It would not, if after ownership had changed, the expert manager and foreman were still having the first and last word, and we were merely taking orders. The boss would not be the flesh and blood shareholder true, but a something without a body or soul called the Department, or the State. Obviously, if, as citizens, we were clever enough and brave enough to win democracy, we should win it for ourselves first, and that win should be chalked up in the workshop or the office. We should be ready.…to say to the people's representatives whom we have elected, ' Here. we are, as a union, prepared.… to come into a growing share of control and management. We are not afraid of responsibility.' That is the attitude of a union which has had some experience of nationalisation. I am not suggesting that the line along which we should go is the development of production committees. I believe that to a great extent they were a failure during the war, because they did not fulfil their true function. They were used almost entirely to discipline the workers. The type of committee I am suggesting has an entirely different object. Workers committees, on which the management should not sit, should be set up to meet regularly to discuss ways and means of increasing efficiency and production. The Government should define the powers of these committees which should have access, through their national trade union, to the controlling body for the industry. They should be able to suggest ways and means of increasing efficiency in industry, and should also have the power to criticise the management if they considered that it was inefficient.

In conclusion, I would appeal to the Government to see that in this first Session, which will be a glorious Session [Laughter. ] There is somebody laughing, but I and those who support the Government believe that they will do what other Governments have not yet done—give the workers the social security which they have never had before. As I was saying, I appeal to the Government to state their wages policy and what place the worker should have in the nationalised industries of the future. On these two fundamentals depends the success or failure of our manpower policy.

8.19 p.m.

Colonel Erroll (Altrincham and Sale)

I would like to refer, first, to some of the remarks of the hon. and gallant Member for East Wolverhampton (Captain Baird). I agree that the disposal of surplus Government stores is indeed most disappointing, and I am reluctantly forced to the conclusion that the Government are so determined that no one should make a profit out of such disposal that they would rather see that nobody got any of the surplus goods. I was interested to hear the hon. and gallant Gentleman urge a wages policy on the Government. It does show that the light is at last beginning to dawn in the minds of hon. Members opposite. For some months we have been urging the Government to produce a wages policy and now, at last, we see the Government supponters urging their own Front Bench to do the same. In that matter I am in agreement with the hon. and gallant Member.

I would like to refer, briefly, to the remarks of the hon. Member for Hulme (Mr. Lee), for whose knowledge of the manufacturing side of the engineering industry I have the greatest respect. When the hon. Member talks about production.in the engineering industry, it is well worth listening to him. Consequently, I was sorry to hear him talk such arrant nonsense when he spoke of the need for regauging the whole of the British railway system in order that it might carry a few out-of-gauge loads. Surely, he does not suggest that we should use our depleted manpower resources in the very arduous and laborious task of relaying the whole of our railway system widening the tunnels, and so on.

Mr. Lee

I am 9ure that the hon. and gallant Member for Altrincham and Sale (Colonel Erroll) does not wish to misinterpret me. What I said was that there were parts of the railway lines in this country which could not take one big indivisible piece of engineering production,, and that if it was necessary to alter the gauge so as to get rid of the overhang it would be well worth doing, but that if it could stand the additional overhang without the gauge being altered, so much the better.

Colonel Erroll

I am grateful for the explanation, which underlines another point that I wish to make concerning the hon. Member's speech. It is the importance of the development of research in the engineering industry. Surely, the way to get over the difficulty of these-large indivisible lumps of engineering production is to have some redesigning, and research into lighter alloys, prefabricated methods of construction, and so on. The hon. Member rightly urged industry to give its mind to research; but industry can properly spend money on research only if it is assured of a reward for that research. There must be full scope left for making a profit out of the results of research. When hon. Members opposite chastise industry for not being more research-minded, they should realise that probably the reason is that industry knows it will not get any benefits out of such research.

I would like now to turn to the very sincere statement that was made by the Prime Minister. We have read in the Press a good deal about the importance of that statement and how much it would mean to the workers of this country. I hope I shall not be thought to be disrespectful if I say that the Prime Minister reminded me very much of an elderly science master turning the wheel of a Wimshurst machine, and producing a pale spark of high voltage, but no power whatever. It was a disappointing statement when we had expected so much. It is no good pressing on the accelerator furiously if one puts on the brake at the same time. I urge the Prime Minister to go into the country and to listen with a receptive ear to what the manufacturers and engineers have to say about production. The right hon. Gentleman, I am sure, appreciates the difference between plans and orders and the effects of those plans and orders. The Minister of Supply is stumping round the country saying that he is in charge of engineering. I wish he would listen to what the engineers have to say, and I wish he would make sure that everyone in the Cabinet really knew what is going on in industry and what is the effect of the Government's precious plans.

I would like to give one or two specific examples rather than to give generalisations. I will refer to one or two things that have happened recently in factories which I know. Two months ago, in one factory, a skilled turner, one of the three employed, was called up. He was sent into the Royal Air Force, not to be a skilled turner, but to go on a training course to become a storeman, which is not a skilled employment. The result is that nobody, neither the Service into which he has been drafted nor the firm from which he has been taken, gets the benefit of his skill. In another instance of a more serious nature, a large machine-tool firm in my constituency was notified last November that about 135 of its skilled men were to be called up. This would imperil its export programme At the same time—and such is what we must learn to expect in State planning—the firm received a call from a Ministry of Aircraft Production official who demanded the speedy delivery of some machine tools required for a factory still making aeroengines for fighter aircraft. I hope we shall not see many more examples of that type of planning.

One hears a good deal about a manpower budget. It sounds very smooth, smart and streamlined, but have the Government any real policy with regard to manpower? Perhaps the Minister of Labour will inform us later whether there is any real policy, or whether it is simply a matter of makeshifts and odd jobs here and there. For example, there is the question of electric motors. Electric motors are not a very popular subject to discuss in Debate, and motor cars attract public attention much more; but electric motors are probably much more important to the welfare of this country. Not only are they essential for driving machine tools, looms and a thousand and one other applications, but they are essential for domestic refrigerators and many other domestic appliances.

I urge the House to consider the importance of small electric motors, the production of which is seriously held up at present by the shortage of a few workers. It is a question of women coil winders. It is not that these women never existed. They were in the engineering factories during the war, but they have been drawn away into the cotton industry. I agree it is important we should have women in the cotton industry, but the numbers required for coil winding are very small, whereas thousands are required for the cotton industry. It will make very little difference to the output of shirts if 200 coil winders are in the cotton industry, but it will make a very big difference indeed to the number of finished electric motors produced. At the present time the position is so serious that many skilled men employed in the later stages of electric motor manufacture are working short time, because they cannot get coils from the coil winders, who have been sent off to the cotton mills of Lancashire. I do not see in that any evidence of a manpower budget. I call it a hopeless, makeshift, hit-and-miss policy. That is the whole trouble.

If only the Minister of Supply would go to the engineering factories and find out what is happening, he would be doing the country a much better service. I am afraid that Members of the Government are too much interested in the publicity aspects of these matters—in the cotton industry only where it affects the production of clothes, and the engineering industry only where the production of motor cars is concerned; and, of course, the Minister of Supply is still interested in his immovable circus of white elephants, the Royal Ordnance Factories, which he is trying to coerce into forms of production for which they were never intended. I would rather that the Minister of Supply and the Minister of Labour turned their attention to the production of such small homely articles as grinding wheels. That is a small industry which attracts very little public attention, but which is vital to our welfare. This small industry engaged in the production of grinding wheels has no priority for men, materials, plant or buildings, but without an adequate supply of grinding wheels the whole engineering industry would soon be at a standstill. There would be no grinding wheels for the finishing processes of the components themselves, and no wheels for sharpening the tools required in the earlier stages of production. That industry excites no attention from Ministers because it is not in the public eye, and therefore, is not the subject of political pressure.

I would like to refer briefly to the problem of manpower. Unlike certain hon. Members opposite, I feel that we must get accustomed to a more or less permanent shortage of manpower. This means a revision of all our ideas about output, production and the control of labour. I would not go as far as the hon. Member for Louth (Mr. Osborne) who suggested, "No work, no food." I hope there are some more humane incentives that can be given. I agree that formerly the fear of unemployment kept men at work, but now, thank goodness, that incentive no longer applies. Nevertheless, it is essential for the Government to decide what alternative incentive there shall be.

I do not think it is right that we should regard this problem as a competition of amenities, of bigger and better loud speakers and canteens, of pictures painted on the walls of the factories. Nor do I think we should try to build a Babel-like tower of increasing wages reaching to the heavens. I want to know what is the Government's policy in regard to providing the incentive. If we are merely to have a competition of amenities, with an ever increasing rise in wages we shall find that unless it is accompanied by a greatly increased output the losing industry in the race—whether it be the foundries, the mines, or what happen at the moment to be the modern industries—will always be short of labour, and the winners will be, by no means sure of their fate. I think that is one of the greatest problems of the many which have been suggested to the Government today as problems which must be dealt with. There is urgent need for them to get out among the manufacturers, whom they are so glad to chastise, and find out what their difficulties really are, and to try to help them and not to harass them.

8.32 p.m.

Mr. Ellis Smith (Stoke)

The economic equilibrium of the world has been upset by the most terrible and devastating war in which mankind has ever been involved, and it is very opportune that this Committee should be giving consideration this week to the serious economic situation in which our country finds itself. In order that my observations may be considered in correct perspective, I would remind the Committee—and I hope, perhaps, those in other parts of the world who are now considering our economic position, as well as some of our fellow countrymen—of two statements. The first was made by the Chief of the American General Staff, General Marshall, who wrote: We were given time to organise and deploy our forces through the heroic refusal of the Soviet and British people to collapse under the blows of the Axis forces. They bought this time for us with the currency of blood and courage. We should remember this, and those in other parts of the world should remember it too while Britain is in the present serious economic situation. Another statement was made on 19th November, 1940, by Mr. Henry Stimson, the United States Secretary for War. He paid a striking tribute to the British workers when he said: British workers today are producing as men never produced before. By their labour they are turning their island home into an unconquerable citadel of freedom. This unconquerable effort has been made under the leadership of labour itself, which today is the backbone of the British fight for freedom. In our approach to our economic problems, and in considering the question of output, we should take account of the fact that our fellow countrymen have passed through the greatest strain that has ever been suffered by any people in the history of the world. The British people have made a Herculean effort during the war. They have strained themselves and now they are slowly but surely recovering. Our gigantic war effort has created obsolescence in industry and difficulties of conversion. Nevertheless the conversion from war to peace is proceeding more steadily and more smoothly in our industries than it is in any other part of the world where there is not a planned economy. The Government's legislative programme, based upon the election statement contained in "Let Us Face the Future "is being put through the House smoothly and with relative speed.

There is a growing realisation throughout the country that we need to be seriously concerned about our economic situation. The Prime Minister, this afternoon, stated that he preferred to measure the volume of the nation's production rather than the output per man hour. Those of us who are closely associated with them know that the workpeople themselves measure not the volume of production or output per man hour, but in the most scientific manner, in seconds. Therefore I think we should apply the same scientific measurements in order to ascertain the output of our industries. It has now been accepted throughout the world, among all scientific industries, that the best method of measurement of output is per man hour, and we need to be seriously concerned about the output per man hour in our country. The right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) ought not to have built up his indictment against this side of the Committee. The indictment can be built up against those who have been responsible for determining our industrial policy between the two wars for it is they who are responsible for the present position. If anyone is not prepared to accept my view, I ask him to read the publication "The Tools For The Next job," published by the Tory Reform group just a year or two ago.

If Britain is to build up the export trade which we all desire, we must be concerned about the cost of production and the overhead charges, such as finance and landlordism, superimposed upon the direct production costs. We also need to be very concerned about our man-power. A very great change has taken place between 1938 and the present time. There are relatively few now employed directly on production in this country. All students of industrial affairs must be very worried about the increasing number engaged on administration, on transport and in services of all kinds, such as distribution, and the position is now more serious than ever in the past, because, according to the Government's White Paper published recently, we are to retain 1,700,000 in the Armed Forces and in the supply industries. I want to ask the Government to re-examine this position. Are they satisfied that this country can stand these commitments? Let me make it crystal clear that we, on this side of the Committee, and the trade union movement in particular, are prepared to face up to all our responsibilities in connection with this manpower problem which makes it imperative to increase the output per man hour by a large percentage as soon as possible.

This cannot be done by the crude old methods of asking our people to work harder. Our people in the main have worked harder and faster than the people in any other part of the world. We cannot judge them in the present situation, we have to judge them by how they worked in the past, or. how they worked during the war. The position we have now reached is that they need more horsepower at their disposal, more mechanical appliances, better organisation, and scientific management so that we can get better results from the human energy which is put into industry. This means a policy of large-scale electrification, of national planning. Today's Debate is a big step in the right direction, but it needs to be continued each year, or periodically, in order that we can examine the results obtained during the previous 12 months, so that we can benefit from our experiences and adapt our plans accordingly. Therefore I advocate that after this week's Debate the Government should re-examine the position and adopt a policy of real national planning.

Real national planning can only be carried out by those who accept our economic understanding of industry, and the logical conclusion of real national planning is the acceptance of our political philosophy. Therefore, I advocate that since our fellow countrymen have made a gigantic effort to save the world, and since we could not have done that except by having national plans and a drive behind them, and national unity, so I am now appealing to the Government to lead our fellow-countrymen in order that we can apply the same methods which won us the war to winning the economic battle in which Britain w3l be involved. If this policy for national planning is accepted, then we need to carry out a policy of the re-equipment of our industry as soon as possible, and we need a policy of modern transport as my hon. Friend the Member for Hulme (Mr. Lee) pointed out Within a few years this country will be faced with the need to relate our productive capacity to the consumption needs of the people, and that can only be carried out by those who accept our economic ideas of life. I would ask every hon. Member and right hon. Gentleman listening this evening to remember that.

Can we be told tomorrow, when the Government spokesmen are replying, what is the Government's economic machinery? What changes have been introduced by the Government in dealing with economic affairs? Practically the whole of the country now, including hon. Gentlemen opposite, are committed to a policy of full employment. It was contained in the Coalition Government's White Paper. Are we designing machinery to enable us to carry oat this policy? In my view the Members of the Cabinet are far' too busy to be laying down national plans themselves. Is there an economic committee of the Cabinet? If so, should not they determine policy, determine the specifications, and then submit them to a national economic planning council to be drawn up? Then the duty of this national economic planning council, in co-operation with each industry, should be the setting up of industrial targets so that the managerial staffs, the administrative staffs, and all those employed in industry would know the target towards which they were working each 12 months. As a result of working towards those targets we could then re-examine the position each year in this House in the same way that we examine our finances each 12 months.

Mr. R. S. Hudson (Southport)

I do not want to interrupt the hon. Gentleman, but he is making a very interesting point about targets. I would only ask him one question, since he is apparently attacking his own Government over targets. There was one conspicuous example of a target having been set recently by the Minister of Fuel and. Power, and I would ask the hon. Gentleman with what result. We all know that production has fallen seriously short of it.

Mr. Ellis Smith

That is a most unfair interjection to make, but as the right hon. Gentleman asked the question I will face up to it. The present position of the mining industry is an indictment of a generation of Tory Government in this country.

Mr. Hudson

That may be so, but it does not alter the fact that the hon. Gentleman is suggesting the setting of targets when they do not work.

Mr. Ellis Smith

It is far better to have a target to aim at than managing in the haphazard way we have been doing in the past. If the right hon. Gentleman was familiar with industry he would know that that was the way to get results, by providing incentive. It is accepted now by all modern managements that if they set a goal they get better results than when there is no incentive at all. During the war we all worked together to win the war, and we can achieve the same results in peace if we have industrial targets. Therefore, I am pleading that this national economic planning council should be asked to allocate the manpower in the national interest, and then the percentage of the national income to industry, housing, Government services, transport and distribution.

The time has arrived when all modern industrial States must adopt a policy of comprehensive economic planning aiming at maximum production and maximum consumption by the people for whom they are catering. Less than 100 years ago human energy was the most efficient; now machines are many thousand times more efficient than human energy. Calculated on a 24-hour basis, the latest turbine has 9,000,000 times the rate of output of the human body and now, instead of appealing to the individual to work harder, people will do their duty if they are given a lead like they were given in the war. What they require is more horsepower and more mechanical equipment at their disposal. Then the people of our country will get results. I ask the Government to re-examine the position and consider setting up a national economic planning council so that this country can adopt some modern methods in order to win the economic battle in the same way as we made our gigantic contribution to winning the world battle for freedom.

8.50 p.m.

Sir Peter Bennett (Birmingham, Edgbaston)

With a great deal that has been said by the hon. Member for Stoke (Mr. Ellis Smith) I am in agreement because I know he is a practical man. But naturally I do not follow him all the way. One thing which has run through the Debate tonight and on which there has been universal agreement, is that production is the key to our problem. Hon. Members have made various comparisons, but the fact remains that those who have been endeavouring to compare the problem with our prewar effort, find that in a great many cases we are at present considerably below the prewar tempo. In some cases, the tempo of production is higher than it was where exactly the same class of goods have been made in the prewar years and right through the war. With improvements in equipment and various aids, the speed has increased, but in all the cases where there has been a complete changeover from peace production to war production and now back again, in the works I have been investigating the tempo is not comparable with that of before the war. Men from the Forces come back and ask what has happened in the factories; why are they not working as they did before the war?

I have had estimates taken, and have discussed the matter with other industrialists, and we have been to meetings with the Board of Trade. We find that today in many sections of industry, we are getting only 60 to 70 per cent, of what we obtained from the same organisations before the war. I have tried to picture what the Chancellor of the Exchequer will have to do in a few years' time and have been comparing 1938 with a future normal year, say, 1948. At present it is very difficult to abstract figures, which have any real bearing on the position. We are in a transition stage. The White Paper on future defence shows that. But in trying to estimate what conditions will be like in 1948, which is the year the Government actuary gave when dealing with national insurance figures—and comparing them with 1938, we find that with national defence, war pensions, civil injuries, service of the debt, education, housing and other expenses there is a total of something like£908 million without the cost of social services. We have a very big extra burden for war pensions and the service of debt will be more than doubled. Education and housing will cost a great deal more. Other expenses have gone up in the changes in the value of money and the increases of Government staffs, to which we have to add the subsidies provided to keep the cost of living where it is. This means that we shall have to meet an addition of at least£1,000 million without taking into account the cost of the social services. As regards these, the Government actuary has estimated that the cost to the Treasury in 1948 will be£175 million going up in 10 years' time to£ 243 million, in 1968 to£ 367 million and in 1978 to£ 452 million.

Then we have not finished; we have to add family allowances and expenses under the National Insurance (Industrial Injuries) Bill which we considered last week. We are preparing a Budget which will run into figures which are startling in the extreme. Taking full account of the change in the value of money, it is quite clear that we must have a great deal larger national income than we had in 1938 in order to carry all these charges to which we have committed ourselves. That has to be earned.

As I tried to say when speaking a fortnight ago on the National Insurance Bill, there is no mystery about finance. You either earn it with your own hands or somebody else earns it for you. We agreed on this last time, and I have said it again, as I knew hon. Members opposite would agree with it. But that takes effect equally at both ends. It applies to the people to whom hon. Members opposite and I object, the hangers-on in the City who make their money on sidelines, and make" it without working. I detest those as much as hon. Members opposite do. I hate a man to come along and say he has done very well out of work I have been doing for years. But it applies equally to the man who, through misfortune, ill-health and other circumstances, is unable to earn and who has to rely on the State providing for him. Somebody else has to earn that money. There is no mystery. We have to face the fact that with this enormous expenditure before us, somebody has to earn the money. We are in agreement there.

It is not a case, and I hope I will not be accused of doing so, of taking sides for management against workers. Both have to study this question and renew their efficiency. The burden is equally on both. Managements, generally speaking, are doing this. The Press will tell you so. There are new institutes and groups and investigations going on to see how management can improve itself for the tasks which lie ahead of it. Visits are being made to the United States to study methods there. Unfortunately, we cannot get the transport which we would like to have or more people would go there, and the Board of Trade knows that. Before the war, the organisation with which I am connected, always had a dozen or more people over in America to study their methods.

But do not let us imagine that we can take American methods and use them in this country in exactly the same way. This is a small country with a smaller population. Americans are much more standardised than we are. When I was over there a year ago, I had to attend a meeting of bankers and industrialists. We sat around a table and every one of those gentlemen sitting round the room was apparently wearing the same type of shirt and collar. I was the only man wearing a print shirt in the room. I went into a shop—there was no reason why I should not buy some clothing—but I could get nothing but white duck shirts with polo collars. I got one or two though they only come down about here—six inches short. But the Americans are standardised and they all wear them. We are a much more individualistic country than that. People turn round and say, "Why do you not make standard goods—standard motor cars?" Our people will not be driven. They like to have a selection.

When one brings back American methods to this country one has to Anglicise them. We are not overlooking the fact that we can learn a great deal from America, but it is a point of great interest that one cannot merely take something from America and introduce it over here. In America one finds numbers of Englishmen. In conversation I found that the average Englishman who goes over there can do the average American's job, but bring the average American over here, and he has almost to go back to school to learn how to work in our factories and organisations, because they are so different. What I have said shows that we are alive to the fact that management has to play its part, and has to renew and revive itself, and be more efficient in the days to come.

Why are we having all this talk about our present production situation? I have been dividing the reasons under two heads, those that will pass automatically and those that will not unless we do something about them. One of the reasons we are having this difficulty with production at the present time is the change over in the personnel. The other day I studied some figures of an organisation in which something like 27,000 people were engaged. In the last six months 8,674 people had left, and 5,159 new people had come in. People have gone back home; girls who came from Scotland, Ireland and Wales have returned. Their places have been taken by other workers, who have come back from the Services; men are taking up their jobs after their leave. There is a change over of that nature, and all that it means in an organisation. It is a terrific problem, and greatly retards the progress of reconversion. Those who come in have to re-learn, even if they were there before the war. Five or six years away in another job means that to a certain extent they have to start over again. One does not blame them; that will pass.

There is not only the change over of workers, but of products. In some cases the same product, or something like it, has been made during the war years, but not in all cases. In more cases, the product is totally different. Machinery has to be taken out, new plant installed and new tools made. Retooling is a long, laborious job. Some people, when I have talked to them about tools, thought I was talking about hammers and chisels and the like. That is not so. The tools to which I am referring are special equipment; they go on to machines. These elaborate tools have to be made, and made by hand, and it is a long, laborious, slow job. All that has to be done. While that is going on one finds that factories are being altered; in some instances buildings are being turned upside down. It is not easy to get building licences, so we find new production work going on side by side with bricklaying inside the factory, and we do not get the best production either in quantity or quality.

We have all sorts of shortages and bottlenecks inside the factory. Material —the President of the Board of Trade will be pleased to hear this—has been better than we expected it to be, but bottlenecks that slow up the flow of production are irritating in the extreme—such as lines of motor cars being held up because the little bulbs that go in the dash lamps are missing. The result is that work is piling up, and we have enormous quantities of work in progress which is getting in the way.

Those are things which will pass. They are inevitable. We went through a similar period after the end of the last war. Things were not as bad as they are this time because there was not the same upheaval. We got through then; we shall get through it again. The weariness due to war is bound to pass as the war gets further away. Though war weariness may pass, weariness may remain. That is one of the things about which we have to do something. On the question of food I am not going to say anything, except that my doctor and those investigating the conditions say it is not only a question of quantity, but of variety. We cannot all live on tabloids or doctors' prescriptions. We want a certain variety in our food. That is what we miss now. We have not the vitality, the quickness off the mark, which we used to have. We cannot grumble about that. We have been very well nurtured. We have done very well indeed but there has been an effect upon people.

When I think how the women have worked all through the war years and when I remember the burden they carried, I take my hat off to them. We ought to be very sympathetic towards them when they ask whether we would mind if they had an easier time now. Another point is that there is a lack of incentive today. There are two reasons why people work. One of them is the bad old reason, the fear of the sack. That, we are all agreed, will be removed as the new methods and ideas take root and are carried out. The second reason why people work is for the sake of what they can get out of it. It is in human nature. As a boy I worked very hard in order to save up to buy something. I do not believe I ever worked as ayoung man for sheer love of work. I do not think it is natural in a human being to work for the sheer love of work. I feel on this subject that we have to get back the incentive. We remove the fear and then we must put in its place a double incentive. Today, there is not much incentive. People hate taxation; I do myself. I have got used to it, but I did not like it when tax was first levied upon me. I can understand the people feeling, "Why should the Government have it?"

The result is, as has been said from the other side, that people take it a little easier because they do not want to pay the taxes. There is a terrible shortage of goods in the shop windows. We shall get over that in time. There is, however, something else to be considered. Throughout the war we generated ideas and allowed them to grow until, I feel, there is a danger of them becoming an absolute menace. We talked about the better life, a fuller life, and we meant it, but I am afraid the public were misled. When we tried to "pipe down" and say, "Look here, it is not going to be as easy as you think," officials said, "Now, don't discourage the people. Remember that morale must be maintained," and so the ideas went on and they have taken root. They were ideas, quite naturally, of more pay, less hard work, holidays and retirement at an earlier age. War is not the route by which we obtain these conditions. War activity is a very different thing from peace activity.

I have a quotation from a United States journal which I picked up, which I have not got time to read. It points out from the American point of view that the productive organisations cannot guarantee to give all the precise jobs and the rates of pay which might be desired and that adjustments from war conditions to peacetime work cannot be escaped solely because in some instances it is painful. We do not have a war in order to improve the world. We can improve the world by better means than that. A great deal of emphasis has been laid on our improved social services, but the mental effect on many people during this period seems to be that they thought they were going to get things. That is natural but they did not think, and we did not tell them, how it was all to be achieved.

There is a false idea associated with our wartime expenditure that the Government would pay. The Government have not got a bean. It is our money they have, We pay the taxes, and all they do is to hold the money. The national income, as I am always telling our people, must be increased, and the greater it is the more all will benefit, and the less it is the more all will suffer. People who have money do not sit on it; they pay it into a bank, and the bank uses it, or they spend it and so it goes round, until we all benefit in the long run. To increase the national income will benefit the whole population in due course, but nationalisation is no answer. I think it is the reverse. I am told a story, by a man who swears it is true, but hon. Members know what these stories are, about a man who asked a miner if he believed in nationalisation. The miner said, "Oh, yes." When he was asked, "What do you expect to get out of it? "the miner replied," Well, for one thing, it will get rid of all this damned Government interference."

This is a question of attitude of mind. We have had reference to the Dunkirk spirit, which was greatly admired, but I would remind the Committee of the terrific effort that we made after Dunkirk. We had a marvellous spurt, but the actual production was not as great as was thought. The real benefit was that it produced the spirit by which we progressed in 1941-42-43. Workers got used to their jobs, and it was the sustained effort that produced the results afterwards. We have not that spirit now, and, therefore, we have not the prospects. The question is, How are we going to produce it? We have the same people who could reproduce that same spirit, but I hope we have not to face the same disaster. We want to get the Dunkirk spirit back into our people, and we shall get through all our difficulties.

There is much talk about owners, and the repeated demand to take over industries and nationalise them. It is said, "We can do without the owners." That may be, but it presumes the existence of mines, railways and workshops. Who has created them in the past and who is going to create them in the future? Industry is not a power in the world like something waiting to flow from a tap. It is created every day by personal effort. Industries are dying and others are taking their places, but I am not prepared to say that industrial progress will be achieved simply by official guidance. The Treasury does not take chances. When I listened the other day to the Debate on the Investment (Control and Guarantees) Bill I wondered what would have happened to The Great Horseless Carriage Company of 50 years ago, when they wanted to raise capital to put motor cars on the roads. Today we have aeroplanes, electricity and radio, which have all grown up because people took chances. I am afraid we are going to limit progress. Let the big concerns have a chance, but let us also encourage the young and adventurous. This Empire has been made up by adventurers, and though, today, we may not do as much adventuring abroad as did Drake and Frobisher, many find an outlet for their adventurous spirit in business. They are the few, of course, because the majority of our people want security and comfort. There are a number of adventurers taking chances. Some of them fail, like the early motor pioneers, but others succeed, and it is those upon whom we depend. I am afraid that this attitude of mind for controlling, organising and directing is going to freeze us in our present difficulties, and that will mean less elasticity and less progress if we deny the new people the opportunity of taking chances and making the most of their opportunities and ideas. We should help them all we can. instead of controlling them or making them ask for special permission.

Look at the changes I have seen in my short life. Fifty years age it was a different world from the one in which we live today. Now we have motor cars, aeroplanes, telephones, radio, cinemas, refrigerators—the whole life of the nation has changed. It is a completely altered world and, in my view, there is just as likely to be an altered world in the next 50 years. I do not want to see this world frozen into its present state If we freeze life in Great Britain under a rigid system, what hope is there of maintaining our place in this competitive world with people who are not hampered as we are'' If we do not hold our place in the world, what hope have we of maintaining the people of this densely populated country and giving them improved standards, or even of maintaining the old ones? I want to see economic freedom given to the young men to go out and adventure and rebuild the industries which in time are bound to die I do not want to see them frozen by control or Government action.

It being a quarter past Nine o'clock, the CHAIRMAN proceeded, pursuant to Standing Order No- 14, to put forthwith the Question necessary to dispose of the Vote.

Question put, and agreed to.

Whereupon the CHAIRMAN left the Chair to make his Report to the House.

Resolution to be reported Tomorrow; Committee to sit again Tomorrow.