ECONOMIC AFFAIRS (MANPOWER)

HC Deb 28 February 1946 vol 419 cc2113-216

3.22 p.m.

The Lord President of the Council (Mr. Herbert Morrison)

This important Debate was adjourned last night after a speech by the hon. Member for Edgbaston (Sir P. 'Bennett), with some of which, as he would expect, I did not agree. But I thought it was an excellent contribution to the Debate, with a fine stream of British commonsense running through it. We all enjoyed the hon. Member's contribution very much. He is an old friend of mine, having been in the days of Dunkirk a servant and worker under me at the Ministry of Supply, where he rendered important service to the nation. I much enjoyed listening to his speech, and indeed to the whole Debate, in which my right hon. Friend the Prime Minister gave to the House information of the fullest character that was available to him. I think that was welcomed by the House. My right hon. Friend gave the House a good and, I think, fair picture of the economic situation of the country at the present time.

Of course, we are all addressing, not only the House of Commons, on a matter of this kind—a sort of economic inquest of the nation—but also the country at large. Indeed, I think that the idea of this Debate was a very good one. We have an annual financial Budget, in which we analyse and discuss the public finances of the nation, and to some extent wider issues. I am not at all sure that it would not be a good thing, if we could adjust our Parliamentary time table and save some time somewhere else, to have, in future years, an annual Debate on the industrial and economic state of the nation. It would be of great value, not only as a Parliamentary occasion; it could be of great value to the country as a whole, to the industrialists, business people, trade unions and the general body of the citizens.

The points made by the right hon. Member for Aldershot (Mr. Lyttelton) were partly dealt with by my right hon. Friend the Prime Minister; others will, no doubt, be dealt with by the President of the Board of Trade, and, in the course of my own observations, I shall make some reference at least to points which he raised. There was one small. point he made which I can dispose of at once; it concerns the Ministry of Aircraft Production. The right hon. Gentleman said—he did not himself allege it—that it had been stated, and that if it could be denied it would 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."— [OFFICIAL REPORT, 27th February, 1946; Vol. 419; c. 1952.] I have made inquiries at the Ministry of Aircraft Production, and they say they do not understand this. They say that no Stirlings of any type have been made for two years. I mention that; I make no complaint about the right hon. Gentleman mentioning it. In fact, he said quite frankly that these were things that had been said. I would only say it would be better if people who say those things outside, and start these stories, made sure. of their facts first, before making allegations which, at this time, tend to spread "alarm and despondency," to use a famous phrase. I would also refer to the speech made by my hon. Friend the Member for Smethwick (Mr. Gordon-Walker), which was a valuable contribution to the Debate. He raised some points in regard to the machinery of economic administration and planning, to which I hope to make, reference in the course of my observa- tions. And there have been admirable speeches from both sides of the House. 1 agree with my hon. Friend the Member for Stoke (Mr. Ellis Smith) that there is a growing realisation throughout the country that we need to be seriously concerned about our economic situation. That indeed is the purpose of this Debate.

The most important question with which I propose to deal, apart from the more general speech I wish to make, and in which I will seek to give some of the wider economic background of the situation, and the Government's approach to it, was the point that was referred to by a number of hon. Members— the question of a wages policy. Whilst I can make no final statement about this highly complex and difficult subject, I will say something on it. It is the case that a number of hon. Members have urged, and indeed it has been urged outside, in the Press and otherwise, that there should be a national or Government wages policy. Up to now the spokesmen or the writers who have urged that this should be done, have themselves been somewhat cautious in elaborating such a wages policy. I do not complain; I think they are wise to be cautious, because it could start up a good deal of complication and trouble. I shall be cautious, so that I am in no position to complain about them. We need to be clear what this term "wages policy" means. We can mean a policy which ensures that wage earners, as a whole, receive a fair share of the national income. In all this discussion about our economic condition, and particularly when we discuss the matter of more production, it is vitally important not merely that we should—as we do and shall do—appeal to the workpeople to co-operate in getting greater production; it is profoundly important that all of us, whether Labour, Conservative or Liberal, whether employers or trade union leaders, shall state the case upon the basis, and firmly and genuinely accept the basis, that the work people are to have their proper and adequate share of the increased production which is coming along, because that will help the situation.

It is true that we are incurring liabilities. The National Insurance Bill, which is now before the House, is a costly Measure. It must be paid for somehow^* In the end, it must come out of pro- duction in one way or another. Somebody on the other side—it may have been the right hon. Gentleman the Member for Aldershot—said he was a bit depressed about the liabilities that were being incurred. It is a fair point to make, since liabilities are being incurred, that we should pause by the wayside. and consider from where the wherewithal is to come. That is quite right and perfectly legitimate. However, hon. and right hon. Members opposite must not scold us about this, because both sides were in it during the Coalition. In the Second Reading Debate on the National Insurance Bill there was no Division and there was general support for these proposals. I entirely agree, and we had better all face the fact that, whether it is the well-to-do who are incurring liabilities, whether it is the workers who are demanding more wages, or more social services, that these things can only be got, and can only be handled, on the basis that they have to be produced. They have to be paid for in some way or other. That is true, and I affirm it with all the keenness for which anyone would wish. It is right. We must never imagine that these things come by magic. They come through human toil.

We on this side have been too long saying that all wealth comes from human labour for us to forget it and believe that Beveridge schemes come from somewhere else. They do not. They have to be carried by toil, by industry. Let us not forget it. On the other hand, there is the memory of the production drive which took place at the end of the last war. It was referred to by my hon. Friend the Member for Dumbarton Burghs (Mr. Kirkwood) in a speech with some of which I did not agree. Nevertheless, he had a right to draw attention to history. There were posters, telling people "Produce more," and calling for "More, production," and various Labour leaders permitted their pictures to appear on them. I am bound to say from my own knowledge that, two years afterwards, they wished their pictures had never appeared. It is not enough to say '' more production,? If I have any complaint about the recent manifesto of the Federation of British Industries, which had its uses, it was that it urged "let us get on with production and set aside other things." That indeed has been urged by the Opposition speakers. If we are to get the good will and co-operation of the workpeople, and indeed if this Government are going to advocate this policy, I say quite frankly to the House, we shall only advocate it upon the basis of, and as part of a policy of social justice, a policy of achieving more production to carry the standards we have got and hope to get and to carry the social services. But as production increases in the new order of things—this is the new fact that has to toe brought out, affirmed, and seen to—we must, not only for reasons of abstract economy and social justice, but for hard economic reasons, have increased consumption, in due course, following up and accompanying the increased production. If we do not have it, we get to the absurdity of so-called over-production. I want to be quite fair and balanced. On the other hand, if we get more consumption, more taxes, more burdens upon the public purse, more wages, without the production taking care of them, then we shall get not over-production but inflation and a financial smash, a financial crisis from which the working classes will suffer as much as anybody else.

That is the attitude of economic balance and economic sanity in which His Majesty's present advisers approach this problem. So it is with wages. We say that the workpeople are entitled to a fair share of the national product of the planning machinery which the Government are devising. We hope to help employers and employed for the first time to judge what this fair share should be. That is the first element in all this controversy about wages. Indeed, it is the first element in all Parliamentary Debate on what we can afford in the way of social services and social advance. In the past everybody has been too much in the dark about the facts. Debate has taken place across the Floor of the House. Hon. Members on one side have said, "We cannot afford this. The nation cannot carry it." Somebody on the other side says "We can afford it" or, "What does this cost represent compared with the cost of a Dreadnought?" That does not seem to me to be a particularly relevant argument, if I may say so, even though it has been used on our side. In fact, Parliament has been in the dark as to what we can and what we cannot afford. We say, therefore, "Let us have the facts. Let the facts come out." I am glad to note that the right hon. Gentleman the Member for the Scottish Universities (Sir J. Anderson) appears enthusiastically to agree with me. I only said past Governments have not been enthusiastic in seeing that the facts were available. The Government are going to make a change in that respect. The facts which the Prime Minister gave in this Debate and the publication of the monthly Statistical Digest, which will be followed by other things, are all part of a process of letting the nation know the facts. Then we shall have the joyful sight of hon. Members of the House of Commons having to face the hard and sometimes inconvenient facts, which His Majesty's Ministers have got to face anyway in private. I am all in favour of the process of facing and wrestling with hard and unfortunate facts being shared in common by all Members of Parliament, and not merely by the Members on the Treasury Bench.

So it is in the field of wages policy. In many trade disputes, there is an argument on a demand by workpeople for an increase, or a demand by employers for a reduction, and one side says, You can afford it, and the other says, We cannot. In too many of these cases the facts are not known. Moreover, when we come to general wages policy, often the wider facts are not known as to within what limits we can adjust wages, without getting into an inflationary spiral, or without causing economic depression. Therefore, our first point as a contribution to wages policy is that, so far as we are concerned, we shall take all practicable steps to let the parties to the argument know the indisputable facts. That, in itself, will be a very important contribution. It may be that as the years pass, we shall be able to say enough to enable it to be established and agreed that arguments about wages are circumscribed within certain elastic considerations, but circumscribed nevertheless by limitations of facts.

The next question is whether when those limitations are settled the Government are to step in, and say to employers,You must put wages up by so much, or to the trade unions, "You must not demand more than so much, or "You must accept a reduction "? Are we to tell particular trades and industries, or particular employers, what the wages should be? I do not think we are anywhere near that point yet, and I do not know that we had better be near it. I am all for everybody knowing the size of the cake, and letting the discussion be directed to an argument about what is within the cake, but I do not think we are yet heading for the State to take a hand in fixing wages for particular trades or industries, at any rate more than it is pushed or kicked into doing so. If ever we get a complete Socialist State, it will be another matter. Even then, there will be some argument about it. It may not be free from discussion. But we are not there yet, and we are not going to be there for some time. [Hon. Members: "Hear, hear."] I am talking about a complete Socialist State. Anyway, I would say to hon. Members opposite, do not be too comforted, because we are making reasonable speed—I understood it was strongly complained about.

It is all going according to plan so far. We are not there yet, but we have established in this country, I think, perhaps, with more success than almost any other country in the world, very good machinery for bargaining about wages between employers and employed. It goes ahead with a remarkable degree of good sense—anyway, good temper, and, to a great extent, good sense—and decisions are arrived at amicably, while the Ministry of Labour are ready to take a helpful part now and again. I do not know that we should be wise to take this process of bargaining out of their hands and try meticulously to fix wages, as a matter of State organisation, but we can help to see that the economic facts are known, and that, I think, would be distinctly helpful.

The Government fully recognise the importance of ensuring that wages settlements—and here the State has an interest—do not upset or thwart the national economic plans, and it is actively considering ways and means of meeting the situation. Indeed, the State published a White Paper during the war on these issues and the economic doctrines behind them. The Government are confident that our purpose can best be achieved without destroying the constitutional method which has been worked out in. industry. The problem will be solved by fuller information, good will and good sense, and it is being tackled in that spirit.

Coming to the more general considerations involved in this Debate, together with some specific items of information and fact, it is suggested to the House, as a matter upon which there should be general agreement, that 1946 is a year like no other. It is not a year of world war. It is not a year of settled peace, nor of normal production. It is not a year like 1919, at the end of the last war, a year of hasty scramble for short-term selfish ends, to be followed inevitably by a slump. Much has been achieved since fire ceased in this recent conflagration, but months of further adjustment will be needed before the lay-out of national resources can be placed on anything resembling a peace footing. This is because, as we see it, throughout 1946, the run-down of defence manpower and resources will be proceeding as rapidly as is consistent with our obligations to world security, and with orderly administration and fair treatment of those affected.

On the other hand, throughout the year 1946, men and women from the Services will be taking up posts as free citizens. The labour controls are diminishing. They have not entirely gone, and cannot entirely go yet, but they have diminished by general demand and by general assent. So these vast numbers of workers, who were formerly ordered and directed about, are coming back as free citizens, and that involves new considerations. The benefit of these labour reinforcements to the home front will be felt only by degrees. Service men and women are entitled to, and are mostly taking, leave before starting civilian work. People are changing jobs faster than ever in the nation's history. Every week, over 200,000 men and women are starting their new jobs from scratch or after years of interruption.

As the hon. Member for Edgbaston brought out so well in his speech last night, factories are having to be retooled, raw materials and component parts assembled, blueprints, contracts and removals arranged. The flow of production is swelling, but the results cannot be felt immediately by consumers, because many thousands of tons of urgently needed goods are, at any moment, moving by rail, road and water, or are being sorted in warehouses or passing through the various processes of wholesale and retail distribution. It is important to recognise that we have a pipeline to fill up before the inflow of resources is matched by the outflow of goods at the other end. The number of men and women who will be working in 1946 on the goods which cannot reach consumers until 1947 is even greater than the number working on materials and preparations for houses, which cannot be finished before 1947.

It was one of the things that we learned in the course of war production, often to our embarrassment, that, from the moment the process of designing and planning begins, until a tank is available for fighting purposes, is a very long time—18 months, or 12 months, if we were lucky, and we had to be very lucky for that. It is sometimes forgotten that exactly the same thing must obtain in respect of the beginning of peace production. We start from scratch, and the goods will not be in the shops until the whole process of organisation, preparation, manufacturing, retooling, distribution and so on has been gone through. Therefore, it is bound to be the case that the mere return of workpeople to the civilian front, does not produce the goods the week after they have so returned. There is the pipeline, which, at the moment, the new civilian workers are largely engaged in filling, in starting the process, but the results of the process obviously cannot be seen for some little time, except in goods which are very rapidly produced.

Therefore, 1946 is inevitably a year of continued shortages, although it will also be a year in which a number of tiresome shortages will be brought to an end. It will be a year of laying foundations for the future and of reviving much social and economic activity which has had to be damped down during the war. For this and other reasons, 1946 will also be a year of national labour shortage, and, therefore, of a high level of employment. In the year and a half from the end of the war, until the end of 1946, it is the fact that over 5,000,000 workers will have been gained for home civil and export production. The right hon. Member for Aldershot suggested that today this labour force was still 2,500,000 less than mid-1939. I am glad to be able to assure him that this deficit, which was correct two months ago, has already been reduced by one-third—a sign of the speed at which the workers are swinging back to civil production. Therefore, it is very important that both industrialists and hon. Members should, perhaps, be a little careful about quoting figures that were true—

Mr. Oliver Lyttelton (Aldershot)

The right hon. Gentleman will forgive me for interrupting him, but the figures I quoted were issued by the Ministry of Labour on 19th February, and, if the right hon. Gentleman pursues the policy of telling the nation where we are, he can hardly blame me for quoting these figures.

Mr. Morrison

I am not blaming the right hon. Gentleman. The Ministry can only issue, at a given time, the figures then available. I am doing my best not to quarrel with the right hon. Gentleman, tempting as it is. I am only saying that we all ought to be on our guard, in this period of rapid movement and rapid change. [Interruption.] I hope I am not offending anybody: I am really trying not to do. We ought all I say to be on our guard against the assumption that figures of two months ago, or, possibly, even a month ago—I am not talking about when they are published, but about the operative date about which the figures were accurate—may not be changed, in a fundamental and revolutionary sense, by the time at which we are actually quoting the figures, because the movement of labour has been so rapid. That is the only point I am making. That is the reason why I am able to assure the right hon. Gentleman that this deficit to which he referred and which was giving him concern—which was correct at the effective date referred to, two months ago—has since that period already been reduced by one-third. That is itself a sign of the speed at which workers are swinging back to civil production.

With this great reinforcement, with a larger working population and with the increase in productivity already achieved, compared with prewar figures, our national production and employment should be by the end of the year at a greater rate than ever before in history. The consumer cannot, however, expect to enjoy the full benefit at once. Government expenditure will still be much higher in 1946 than before the war, and large sums will have to be ploughed back in 1946 into capital renewals and develop- ments, such as house-building, some factory building, refilling the warehouses and shops and refilling the pipe-line to our overseas markets. To carry out this reconstruction work, and to keep within bounds the national deficit on overseas balance of payments, it will be essential for saving to continue at a high level, and for personal expenditure on consumption not to go on the loose. The short term target for consumers is, naturally, to get back to 1938 levels; the longer term target is to surpass those levels, in both cases ensuring a fairer and less wasteful distribution.

During the period of continued shortages, the Government's policy will be to continue the wartime policy of fair shares for all. That is why appropriate controls must go on. It will also be to fight inflationary tendencies while energetically expanding supplies in those fields where they are most urgently needed—housing, clothing, food, furniture and recreation services, and others. I would emphasise that in all these fields the amount we can have depends on the amount we make. We are not exporting any houses, nor any furniture, nor any significant quantity of clothing or food. If there is a shortage of these things, therefore, it is because we, in this country, are not yet making enough of them, and because we are not making enough of other things which foreigners want to be able to buy enough of them from abroad. Therefore, it is futile—and a little regrettable and dangerous even— to talk as if someone—my right hon. Friend the President of the Board of Trade, or the Minister of Supply, or what not—[Laughter.] Perhaps I should have said "who not." It is futile to talk as if someone were hoarding quantities of goods which, if released, would greatly relieve the lot of the sorely tried housewife. The goods are simply not there, until we have made them, or have made the wherewithal to buy them. Anything that is said otherwise, is beside the point and inaccurate.

Nevertheless, production is swelling fast enough to show that we are on the right track. Let me mention a few signs of this heartening trend. It is not enough, but still heartening. By last December the output of civil motor vehicles was already up to 17,400 in the month, or well over half of pre-war. At the middle of 1945, passenger motor cars for civilians were coming out at a trickle of 200 a month. In December the industry turned out 6,700. Cars up to eight h.p. were nil eight months ago. In December they reached 2,800. Utility furniture rose during 1945 from one-tenth to one-third of pre-war output Electric household appliances' output was multiplied nine times during 1945, and such useful things as electric irons are, I am advised, widely on sale in the shops. During 1945, vacuum cleaners were stepped up from nil to 17,300 per month. The output of carpets and linoleum was doubled during the year. The House will be pleased to know that the pram output went up by 60 per cent. [An Hon. Member: "What about coal? "] I am trying to give the House the facts. If hon. Members want to make a joke of the whole business, we can all enjoy ourselves, but I hope they will not. The pram output, I say, is up by 60 per cent, and, I may add, is running at well above pre-war levels. I have not the numbers by me, but that is the satisfactory situation in regard to that commodity. Let us hope that enough bonny wee things are also being produced to fill the prams.

Captain Sir Peter Macdonald (Isle of Wight)

Will the right hon. Gentleman say what the percentages he is quoting are based on? Are they based on the 1938 figures, or what?

Mr. Morrison

The output of prams was 60 percent. Up at the end of the year compared, broadly speaking, I think, with the middle of the year. There could not have been very much production of prams during the war, I am quite sure, and it is an improvement on the prewar figures. If the House wants the actual figures, my right hon. Friend the President of the Board of Trade can give them at the end of the Debate The actual figures are not really material, but the fact is that production is running at well over the prewar level. I am only making the point that that is an encouraging situation. Nobody would suggest that we have yet gone any distance in meeting the vast accumulated demands of the war years, but we are moving, and the signs of progress are encouraging and material. On the other hand, it would be defeatist not to recognise the beginnings of some reward for all the nation's labour over these years. The simple fact is that the way to have plenty, is to make plenty. We have been through the blitz when our motto was, "Britain can take it." We have kept on telling our overseas customers, "Britain can make it." Now let us tell ourselves and the whole world, "Britain is making it." That is a true statement. We are making the things, and before this year ends, we shall have more men and women making goods than at any previous moment in our history.

Those are the facts and it is really good that the world should know these facts. If any of us, from whatever side of the House, go round like Jeremiahs preaching the doctrine "Britain is down and out," nothing can damage this country more in the eyes of other countries at the present time. But the spirit behind this effort will make all the difference. If we can roll out the munitions of peace, as we rolled out the munitions of war, if we can carry out "Operation Civvy Street" in the spirit in which we tackled D-Day, the next few years will be much easier, both in Britain and elsewhere. But we must look ahead to future production. There is much obsolete plant to be replaced; there is war damage to be made good; there are neglected repairs and maintenance to be done; and these have to come, so to speak, out of capital account. These things also must be carried, and are not a direct contribution to civilian consumption. At the same time, we must not leave out of our reckoning demands for capital investment for new industries and new processes. On these our industrial advance depends, and with it the raising of our national standard of life. In the face of so many other pressing demands, not least for some easement in the everyday life of the people, we shall have to keep investment activity down to a minimum, but that minimum will need to be very high.

Diversion of manpower from the Forces and from munitions had already added very nearly 2,000,000 workers to civil industry, in the second half of 1945, with another 750,000 on leave before returning to civil jobs. By the end of this year enough manpower will have been released to restore home market industries as a whole to their prewar strength, while manpower in the export industries should be very substantially above the 1939 level. This net gain in labour for the civil sector is due essentially to a radical reduction in the 1939 volume of unemployment of 1,250,000—a factor which has to be taken into account— which reduction the hon. Member for Monmouth (Mr. P. Thorneycroft) entirely omitted from his figures yesterday. This is one of the new facts, that up to now we have got full employment. As long as we can maintain full employment and avoid going back to the dreary days of mass unemployment, we can solve our problem of production, but if we go back to the days of mass unemployment, it is perfectly clear that production will suffer.

The cheerful feature of the moment is that we gain on this transformation by the fact that there is not this great number of workpeople standing idle in various parts of the country. Nevertheless, this addition will not be achieved soon enough to raise civil production in 1946 as a whole to the prewar rate, and whilst the numbers of workpeople available may reach a very high point by the end of 1946, we must not get the illusion that that has affected production in the year 1946. It is the overall average of persons employed over the year that determines the production for that year. In any case, when this rise in labour supply—not more than proportionate to the increase in the total population—is related to the huge "back log "of pent-up demand and a minimum rise of 50 per cent. required in export output, the actual dimensions of the overall manpower shortage become apparent. The Government cannot emphasise too strongly that vast long term productive and reconstructive tasks lie ahead, and that the national order book under the Government's policies can be regarded as completely filled for many years. The projects approved or ready to be approved by Government, local and other public authorities and private industry, already far exceed the resources which can be made available to carry them all out for years to come. The bottleneck now is simply how much the nation can produce, and how quickly.

There should be no fear, therefore, that greater output by all who are able to work will lead to risks of there not being enough jobs to go round. The real danger is the opposite one. The danger is that the habits and practices on both sides of industry, born of long years of unemployment under misguided policies, will deprive the nation of some of the effort which it urgently needs in order to rill the shops, to build homes, and to open up enjoyable leisure for the vastly greater numbers who can now afford it. The Government will do their part in bringing forward vital projects in an orderly and efficient way, as rapidly as employers and workers can cope with them, no matter how high a rate of output is attained.

In these conditions, any thoughts which may survive in any quarter, of making the work last longer, or of spreading the available jobs over more workers or, I may add, artificially reducing production to keep the price level up—for all these things have undoubtedly happened in the bad old days of scarcity economics, but the great thing we have to do is to turn our backs on scarcity economics and get right away into the field of expansionist economics—are not only absurd; these practices also involve denying us all goods and services which we urgently need and which we might have. Meanwhile, in order to prevent inflation and to give a reasonable amount of goods, services and leisure to all, the Government will be compelled to require the postponement of a number of capital works—roads, bridges, factories, public buildings and so forth; not all of them, but some of them, a proportion of them—which would, if started too soon, divert resources from even more urgent and more essential projects. Such postponements will, so far as possible, be avoided in development areas, where human and other resources are less strained, but they must be expected, particularly in areas of acute labour shortage.

If we will it, and if we are prepared to see it through, the work is there, and there should be no failure to provide ample opportunities for the fullest employment of the nation's manpower for many years to come. Indeed, I hope we shall so order our economic affairs that we can say that for all time.

Nevertheless, this country is a great trading nation, and the possibility of depression abroad, as has been referred to in the Debate, seriously disturbing parts of our own economy, must be recognised. I was glad to note the useful remarks on this subject of my hon. Friend the Member for Smethwick.. We hope the world will be sensible, and that this problem of possible extensive external economic disturbance will not arise. If it does arise, we cannot avoid being affected, but the Government are fully determined to take suitable measures to prevent any large scale import of unemployment into this country. Active consideration is being given to the sort of measures which would most effectively protect domestic activity, without involving restrictions which would damage the economies of other countries. The Government will do all in their power to see that irksome shortages and restrictions on the consumer are removed as quickly as possible.

The speed with which all that is necessary.can be done, must depend on the energy with which the nation can bend itself to production. We are actively engaged in surveying the resources available, both in this and the coming years, and the demands against those coming resources. The object of these economic investigations and surveys is to ensure, as far as possible, in what must always be to some extent changing and uncertain circumstances, that a proper balance is maintained between the competing claimants, and that the most vital requirements of the community, both in supplying present needs and safeguarding future stability, are given due priority. The Government will not hesitate to intervene with strict and strong controls where they may be called for by sectional attempts to gain advantage at the expense of the community, but such direct controls will not be retained or applied wherever by good will and resourcefulness the necessary general objects can be adequately secured by improvement of incentives, by information and discussion, and by cooperative effort. The House can be assured that in our view the only case for controls is the public interest. Where the public interest requires controls we will impose them. Where the public interest requires that they shall be modified or withdrawn, then we shall modify or withdraw them.

My hon. Friend the Member for Smethwick asked yesterday—and I think it was asked by others—what machinery of Government existed to deal with these economic problems. I am happy to say that the machinery of economic coordina- tion and administration has undoubtedly improved enormously during recent years. I look back to the equipment at our disposal in the Labour Government of 1929 to 1931 and I am bound to say that there was very little adequate economic organisation at all. It was not peculiar to that Government. In fact we were not there long enough to put it right. It already existed; we inherited that situation from previous Governments. During this last war, as right hon. Gentlemen who were Members of the Coalition Government will know, the degree of economic organisation of the State on the economic front was a remarkable development in the machinery of Government, a very very great improvement. Of those who were responsible as Ministers and as Chairmen or members of Cabinet Committees for the development of that machinery in which we all took our part, irrespective of Party, I think it can be said they developed a remarkable and vastly improved machinery of economic organisation, control and inspiration.

It seemed to this Government when we came into office that if we forgot all the lessons of the great economic organisation which was evolved during the war—which indeed was accepted by all political parties as vital and necessary for the winning of the war—and set it aside in this period of the battle for prosperity and economic organisation in peace, then indeed we should be a very bad Administration. We learnt a lot about this in the war, and those lessons are being applied to peace. I would like to give the House some short indication of the kind of economic organisation we have, a kind of organisation which in no way existed at the time the economic blizzard hit us in 1930 or thereabouts. There is of course the Economic Section of the Cabinet Secretariat, a most valuable part of the machinery of government. It is not executive, it is not an administrative Department and it ought not to be so. However, it is a Department which contributes exceedingly valuable economic knowledge, makes its great contribution to the economic outlook, and is an organisation of the highest value. Side by side with the Economic Section there is the Central Statistical Office, which was rightly referred to in a complimentary way by the right hon. Gentleman the Member for Aldershot yesterday. That also makes its considerable contribution. There is also the Cabinet Secretariat, which makes its contribution to the general organisation. Consequently we have now a mobilised piece of organisation in which certain common service functions are discharged by these central sections or departments of the general machinery of the Government, coordinating, advising, looking ahead, forecasting, putting all its economic, statistical and administrative knowledge at the disposal of the separate Departments of State.

Therefore, there is the most cordial co operation between these common Service organisations and the Departments of State. Sometimes it is said—I think wrongly—that we need an economic general staff in the sense of a central body of economists and experts who would make the whole plan, get it approved, carry it through, administer it and exe cute it separately from the economic Departments of State. I think that is a mistaken conception. Such an organisation would become almost as big as the Government itself. The Departments of State which contribute to our economic affairs are very considerable in number. They spread over nearly the whole field of Government. It would not work, and there would be friction all round. There fore, the problem was, and is, to bring about co-operation between the Economic Section, the Central Statistical Office, and the Cabinet Secretariat, and the appropriate officers, the experts, from the Departments of State concerned in these economic affairs, and then to build up from the economic Departments of State, together with these common service sections of the Central Government, an efficient economic machine on the official level.

That was done to a great extent during the war. To a remarkable extent it has been further developed, and I think materially improved, under the present Government. No doubt there is room for further improvement as time goes on. Incidentally as regards the whole administrative organisation of joint thinking, joint planning and so on there is a lot to be learned from the Armed Forces and their organisation during the war. For the sake of the analogy which is sometimes drawn, we have got, so to speak, the economic chiefs of staff in this official organisation which pulls the things together. Correspondingly, there are Ministerial committees above, which of course determine issues of policy, to which the reports of the economic planners go, which determine what shall be done about the reports, which give instructions to the officers on the official level as to what they are to inquire into, and what reports they are to produce. Therefore I would say that on the machinery side there is a great improvement. I think it is pretty well right, but it may not be altogether right, and we shall not hesitate in the least to improve as we go along.

Mr. Paton (Norwich)

May I interrupt the right hon. Gentleman to ask a question? This is a point of very great importance and I would like to be quite clear about what is meant. As I understand it, there are Ministerial committees—not a committee but committees— dealing with the mass of economic information that is flowing to them from the chiefs of staff who were referred to. Is it the Cabinet as a whole that makes the executive decisions at the highest level? That seems to me to be a point of some importance.

Mr. Morrison

Whatever the facts, the Cabinet as a whole must be responsible for everything that happens.

Mr. Paton

But what about the decisions?

Mr. Morrison

I cannot take my hon. Friend too far into the secrets of Cabinet organisation. I am not proposing to do that. I am going so far and no farther. The Cabinet is responsible for the acts of Government, just as Ministers are directly responsible to the House. How the Cabinet does its business, and to what extent it delegates certain things to Cabinet committees is, if I may say. so, the Cabinet's business because it accepts the responsibility. I can only assure my hon. Friend that decisions on policy, according to the nature of the decisions and their importance, the degree of their significance and also the degree to which they may cause trouble and controversy in the House or the country, are settled at the appropriate level.

That is, of course, the responsibility of the Government. These things are settled by one Committee wherever possible, but the number of committees to discharge a series of functions is, of course, a matter of convenience and administration. It is not material to my argument. I am only making the point that, both on the official level and on the Ministerial level, the Government are working in the economic field as a team, organised so that we know what we are doing. We have reached a considerable degree of efficiency in being able to analyse and forecast economic problems and difficulties, and decide upon the policies which should be pursued.

I can assure the House, therefore, that there need not be undue apprehension on this point. As time goes on, we will improve and be increasingly sure of our economic knowledge and facts. We are, necessarily, in a somewhat experimental stage, but we shall become increasingly sure, and I hope that the flow of economic information will not only expand but will become steadily more reliable as time goes on. As the point had been raised I thought the House ought to know about the general organisation. It is not, of course, the practice for Governments to reveal the membership or chairmanship of Cabinet Committees if they can possibly help it. Indeed, we do not often reveal that they exist, but it was a fair point that the House had the right to be satisfied with the general organisation of Government on the official and Ministerial level, and we thought it proper that the House should be informed about it. I would add that this Debate has justified itself. There will be not only Debates in the House, There will, I hope, be debates outside. Various people are issuing manifestos, and that is quite all right. It is a free country. Let the debate proceed; all I am concerned about is that it shall, if possible, proceed upon the basis of ascertainable facts, and that we shall all make our best endeavours to be as constructive as we can, in the interests of the country and of industry.

One of the features of the F.B.I. manifesto—and it has been a feature of some of the speeches of hon. Members opposite—is the argument that it would be much better if the Government would go on with its day-to-day work, facing its difficult day-to-day problems, which are not only industrial in the usual sense but include plenty of problems in the field of agriculture, which the House has recently been discussing—and, by the way, agriculture is of course a vital field in which we want more production, as in ordinary non-agricultural industry. "Why do you not get on with your work?" they say, "Face your problems, and do not be diverted by the wayside into socialising certain industries, and engaging in economic controls, beyond the extent to which we think they are necessary." I do not want to stir up any controversial argument about that today. I have made my contribution in the past, and possibly will do so again in the future, but in our judgment we must approach these problems from more than one direction.

We believe that unless the common service basic industries which we are going to socialise are made efficient—over a period, it cannot be done in five minutes—all industry will suffer, because all industry is affected by those basic common service, or naturally monopolistic, industries. That is bound to be so. The sooner we get on with the job the better. Indeed, the argument advanced by the F.B.I and others, that there is some degree of uncertainty, is one of the reasons for getting on with it, so that the uncertainty shall cease. That, I assure the House, was the main motive behind the statement about nationalisation I made, with the approval of the Prime Minister, during his absence in North America. Having said we are going to do it, we had better do it. In our judgment it must be done; it is necessary in the interests of the country, and we believe also that it will be for the good of industry.

I do not blame the F.B.I., or hon. Members opposite, for having their own opinions, any more than, I hope, they would blame us for having ours. Broadly, the country has approved its being done. Let the argument proceed, let criticisms take place, but is it any good for the industrialist to argue as we go along, without any purpose? Surely, the first consideration is to see that the socialisation of industry is efficient and successful, that the best possible scheme is worked out, and the next consideration—in fact, it is an equal, if not a prior, consideration—is that we ought all to do our best to see that the vast bulk of industry which remains under private enterprise makes the best contribution it can to our national well-being. If industrialists say that the State is not as helpful to them economically, as it might be, let' them see the Ministers about it, for I am bound to say that, in my experience, industrialists on the whole are often very complimentary about the assistance, courtesy and understanding they receive from Ministers and State Departments. It is when we get into the field of Parliamentary and Press controversy that they are not so ready to admit this.

It is also said that we are nationalising things we do not need to nationalise and certain fringes of the mining industry which are being taken over by my right hon. Friend the Minister of Fuel and Power, have been mentioned. There is no dark plot about that; there is nothing sinister in it, and why should there be? My right hon Friend took over the collieries—at least, he is in process of doing so—and he finds that the collieries already possess certain ancillarie—brick fields, some farms, various things. What is he to do? Either he stops and argues with the colliery owner; as to what he will take over and what he will not, in which case he will have another two years to go, or else he takes the lot and argues afterwards about what ho wants and what he does not want. There is no plot, there is nothing sinister, and I think it is a pity that such a somewhat irrelevant issue should be raised.

This Government want to co-operate with industry, and we are ready to cooperate with everybody for industrial prosperity. We very much want to do it. There is no lack of good will on our part, and let there be no lack of good will on industry's part either.

Mr. R. S. Hudson (Southport)

It is a funny way of showing it.

Mr. Morrison

The right hon. Gentleman the former Minister of Agriculture says it is a funny way to show it, but what is he trying to make us do? What he wants the Government to do is to abandon the whole of their important economic policy, upon which the Election was fought and on which the electors pronounced, and he says that if we do not we have a funny way of showing our good will towards industry. It is an unreasonable attitude. I hope it does not mean that he wants to encourage industry not to co-operate with the Government, unless we are willing to capsize the policy upon which we fought and won the Election. That would be a pity, and would not make for good will. We are ready, anxious and willing for the most cordial co-operation with all industry, whether public corporations or private enterprise. The need today is for all of us to do the best we can to advance and increase production, to increase the efficiency of our country economically and industrially, so that as the years pass, employment will remain full and the standard of life of our people will advance, as it ought to advance, from year to year as a result of their industry, enterprise and toil.

4.30 p.m.

Mr. Oliver Stanley (Bristol, West)

The speech to which we have just listened from the right hon. Gentleman the Lord President of the Council will have come to Members on this side of the House as a surprise, even if a pleasant one. Since the opening of this Parliament we have had a number of speeches from 'him; it has always been "the mixture as before," half rhetoric for his own side, and half taunts for us, well mixed up and served without ice. And it is a pleasant surprise that we should have listened, instead of to that, to facts and argument, and, even though with much of it we must disagree, a genuine attempt to speak from a statesmanlike rather than a partisan point of view. He will excuse us, perhaps, if we find this conversion so sudden and so startling that we cannot yet regard it as permanent; we may have to look out for backsliding on his part in the future.

There are two points he made with which I was entirely in agreement. I agree entirely with what he said about the economic general staff. I think, frankly, there is a great deal of nonsense sometimes talked upon that point, and I think the right hon. Gentleman showed that the sort of organisation people have sometimes suggested could not fail to be an organisation which usurped all, or nearly all, of the functions of Government and would, indeed, make impossible the task of normal Ministers of the Crown. I am glad that he said we had much to learn from the organisation and the planning of the Armed Forces during the war. Secondly, I agree with his point about the annual Debate. I do think that a Debate of this kind serves a very useful purpose; and certainly, so far, it has justified itself. I have a suggestion to make later on about one difficulty and one way in which, I think, it is to be overcome if the Debate is subsequently to serve its full purpose. And, by the way, although I shall deal later on with some parts of the right hon. Gentleman's speech with which I disagree, I was most interested in the careful account he gave of the activities and, I think, the success of the Government in assuring that there was correct phasing between production of prams and their effective occupants.

I want to devote myself more to the speech which was made by the Prime Minister yesterday, a speech of great importance. It fell into two halves: one, the interesting, factual account of the industrial situation, and the other what, I believe, to have been a genuine and sincere exhortation to greater efforts on the part of all, and an appeal to all for greater unity in face of the difficulties in front of us. I am not sure that the account that the right hon. Gentleman the Lord President of the Council has given us has not erred, even more than the Prime Minister's did, on the side of optimism. Anyone who listened to some of the difficulties he ruled out would undoubtedly have gone away with the impression that the shops of this country must be absolutely overflowing with goods—

Mr. H. Morrison

Has the right hon. Gentleman already forgotten what I said? I specifically warned the country and the House against the view that because you have got production moving to a considerable extent, the stuff would be in the shops at once. I referred to the pipeline argument.

Mr. Stanley

I quite agree that when you are dealing with the workers brought into industry there must be a considerable time lag, before the effect of their production is seen in the shops; but when you are talking about goods produced last December—the figures for the end of the year—it would appear that some of them should have found their way by now into the shops. I confess I thought I did see a slight look of inquiry on the face of the right hon. Lady the Minister of Education sitting next to the right hon. Gentleman when he mentioned the wonderful increase in the production of electric kettles—[HON. MEMBERS: "Irons."]—of electric irons, as if she were going to ask him at the end of the Debate for the right address. To give an optimistic picture of what has occurred is apt to detract from the appeal which was made by the Prime Minister and that has been repeated today by the Lord President of the Council. The Prime Minister in his speech yesterday chided my right hon. Friend the Member for Aldershot (Mr. Lyttelton) for being too pessimistic, and in that he was sedulously followed this morning by a leading article in what one must now regard as one of the most expensive of the Government's daily organs. [HON. MEMBERS: "Which is that?"] I refer to "The Times."

Mr. Austin (Stretford)

The '' Daily Express "?

Mr. Stanley

That is among the cheaper of the Government's critics. As regards the question of pessimism, of course it depends on how you define pessimism. I do not think a pessimist is one who is prepared, frankly and courageously, to set out the difficulties which appear to be facing him in the future. A pessimist is only a man who, having set out those difficulties, despairs of ever overcoming them. We do not despair. We join in the appeal that no one today should give an impression abroad that we have any doubt as to the economic future or the economic recovery of this country. But that does not mean to say that we should not and must not frankly set out and see the real dangers which are looming in front of us. It is particularly necessary when the note upon which you are going to end your Debate—the note upon which the Debate has proceeded hitherto—has been an appeal to all parries and sections to combine in a greater effort and a greater unity for the sake of the nation. It is not much good appealing to the people to dig hard for victory if you start by telling them everything in the garden is lovely.

No one can deny that there are in front of us very grave possibilities. First, there is the tremendous gap which exists today between physical exports and the imports of this country, at time when our invisible exports have dwindled to an extent which we do not yet know; and that gap exists when there is a greater demand for our goods than there has been in the past and, perhaps, greater than there is ever likely to be again in the future. Secondly, we are faced with a position in which almost half of the very heavy expenditure that we have to bear has to be met by borrowing. Thirdly, there is what no one will deny to be the critical situation in our major industry, both for home consumption and for export, the coal industry. Fourthly, there is the point which has been referred to by Members on all sides of the House, a point admitted by all—the declining rate of productivity at a time when we are basing all our hopes for the future, for the raising of the standard of life in the future, on an increased rate of productivity made possible by the advances in science and engineering during the last rive or six years.

It is clear that all these factors, unless they can be altered, can produce a catastrophic effect in this country. The appeal by the Prime Minister was to Members on this side to co-operate in avoiding something which must fall with equal force on all, which would be a crisis, not such as we have known in the past, where, perhaps, the fall of one Government might be repaired by its successor, but a crisis which, at the best, would leave permanent marks upon the life of this country, and, at worst, would make all those policies, hopes and dreams of the future futile and impossible of realisation. So the Prime Minister's appeal falls on ears which, on this side of the House, are predisposed to listen. When he talks about the necessity for creating a spirit of unity and joint sacrifice such as we experienced during the war the right hon. Gentleman must realise the two differences which exist today. The first is that referred to yesterday by my right hon. Friend the Member for Aldershot, the constant propaganda which, for months past now, has been directed not only against members of political parties who happen to be opposed to hon. Gentlemen opposite, but has extended itself—a much more serious matter—beyond them, to industrialists, employers and capitalists, exactly the kind of people to whom today the Lord President of the Council has been appealing.

So far as attacks upon Conservative politicians are concerned, in the words of the right hon. Gentleman himself we can "take it." It may be annoying to have our efficiency—after all, we cannot all go to the London School of Economics—and our motives impugned all the time, but we have to read day after day the sort of article that appears under the name of the hon. Member for Dcvonport (Mr. Foot), which I regard as typical of all. [An HON. MEMBER: "Worse."] Ex pede Herculem—which might roughly be translated as, "You can tell Lord South wood by his foot." All that may be annoying, but it is unimportant. The Prime Minister has said that politicians are, or ought to be, thick-skinned. What is damaging and destructive to the effect of the Prime Minister's appeal is the extension of that sort of campaign beyond the realm of party political contest into the whole industrial field, and the inclusion of the employer, the capitalist and the industrialist. As the right hon. Gentleman pointed out today, the vast majority of the workers of this country are working under the system of free enterprise, in industries which are not yet controlled by the State. Even in the improbable event of the passage of legislation, to which I should not be allowed to refer, there would still be 80 per cent. of the workers so employed. How is it possible, on the one hand, to carry out a campaign telling those people, as they have been told in the past, that the chief thing that makes hard work necessary is the inefficiency of the employer, that, in any case, the product of harder work will go into the pockets of the employer, and that any fall in productivity will hit only the employer; and to combine it with an appeal by the Prime Minister, at the same time, that everyone should work harder, when almost everyone is in the employment of exactly those people?

One thing is certain. Whatever the employer, the industrialist and the capitalist are, whether we take the poor view of them that hon. Gentlemen opposite have or the more charitable view taken by hon. Members on this side, they remain the same throughout the week. They are not different at week-ends from what they are on week-days. You cannot treat them on Wednesday as patriotic citizens to whom you appeal, and then go out to the constituencies on Sunday and treat them as rapacious profiteers who are only there to exploit the workers. The Government can decide which they are, but must stick to their choice. The other difference is that to which the right hon. Gentleman has already referred. He knows that in 1940 a decision was taken by my right hon. Friend the Member for Woodford (Mr. Churchill). I cannot remember the exact words. The effect of it was that during the war no controversial legislation should be introduced excepting that which could be related to the immediate purpose of winning the war. All of us on both sides of the House had to put some of our ideas into cold storage. The right hon. Gentleman talks about being asked merely to take day-to-day decisions. That is not what people want. If it is necessary to take longer-term decisions in order to meet the crisis which is facing us, or may face us during the next few months, hon. and right hon. Gentlemen on this side of the House will be prepared to listen. What we ask is that everything that is brought to us should be related to the crisis now existing.

The Lord President of the Council said that he made his famous statement about the future course of nationalisation in order that he might reassure industry.

Mr. H. Morrison

They wanted it.

Mr. Stanley

The right hon. Gentleman will recollect that he was very careful to prevent our having an opportunity of discussing it in order that we might elicit for the same purpose any further information he had to give. Indeed, so unfortunate was that course that, not long afterwards, the right hon. Gentleman had to publish an alteration and an emendation of one of the passages of that statement. We believe that those long-term projects, which have no relevance to the immediate crisis of the next few months, cause uncertainty, and are making various industries which may or may not be included within that circle devote their energies and attentions to matters other than those which ought to 'be claiming all of them, namely, the immediate development of production. How far that is true perhaps the President of the Board of Trade can tell us. For instance, the iron and steel industry published some time ago plans for development which would be equally necessary whether the industry remained in private hands or was taken over by public control. Have the plans been held up by the uncertainty which now exists, and by the fact that the iron and steel industry have had to put a case to the Government for being allowed to retain the ownership of their property, a case that is now being considered?

Mr. H. Morrison

We did not require the industry to give information to the Government. That was required by the Coalition of which the right hon. Gentleman was a Member.

Mr. Stanley

I do not think the right hon. Gentleman will deny that the industry has been called upon in the last few weeks or months to enter into discussion with the Government, and that the Government were then to make up their minds whether or not the industry was to be nationalised. I do not know how far that has been a cause of delay in the development which all want. I think the right hon. Gentleman will agree that all these matters are bound to make more difficult the task of co-operation and of unity. The remedy lies, of course, in the hands of the Government.

I want to deal with one or two points on one side of the problem which we have been discussing. This has been a very wide Debate. The right hon. Gentleman called it "the economic inquest of the nation." I will leave it to others to follow the many interesting points that have been raised with regard to actual returns of manpower and their allocation between civil and military uses. I want to deal with a branch of the problem which the Prime Minister acknowledged to be just as important. It is, having got men back into industry, are we certain we are giving them the full opportunity and incentive for maximum work when there?

The first point relates to the financial situation. The Lord President of the Council said he wanted to let the nation know the facts. I agree that, to the best of his ability, he and other speakers, and also the Monthly Digest, have tried to give us the industrial facts, but we are discussing all these things now without having any financial background. Since the war with Japan ended, we have had no statement of the general financial position and the problems that face us in that field.

Mr. H. Morrison

The Budget.

Mr. Stanley

The right hon. Gentleman says we shall have it on the Budget. We asked for it when the interim Budget was introduced, we asked for it again in connection with the National Insurance Bill, and the answer always is that we must wait for the Budget. Crises do not always adapt themselves to the third Tuesday in April. It happens that since the last Budget, a war has come to an end, and I think that it would have been possible, just as a genuine attempt has been made to give us the industrial facts, to have done something to give us the financial facts as well. As the hon. Member for Edgbaston (Sir P. Bennett) pointed out in his admirable speech, to which the right hon. Gentleman paid a well-deserved tribute, these facts are of the utmost importance, and they are of great importance, in particular, on this question of the incentive to industry in all branches. Throughout the income scale, from E.P.T. to P.A.Y.E., one hears the tale that excessive taxation is reducing the incentive to work and making extra production difficult. That is not simply a case that is put forward for the Surtax payer. It is put forward just as urgently and sincerely with regard to P.A.Y.E. for the workers, and it is put forward by workers and employers alike. I read recently a speech by Sir Miles Thomas, of the Nuffield Organisation, urging it as the best means of increasing production in his works. Yet, with all the difficulties and the immense burdens we bear already, all the difficulties even of existing taxation, we go on making legislation which imposes more charges, without being able to relate them to the general financial background of the country. All of us agreed to the Second Reading of the National Insurance Bill, but many of us at the time asked whether we could have given to us the financial background against which we could judge the financial effects. When some mention was made of that, the Prime Minister said that it did not matter, that it was an internal affair, and so could not have any effect upon production, but I believe that particular Bill is the most typical case.

The Bill involves a very great redistribution of wealth, but it is not a redistribution of wealth on the old lines which have been progressing for the last 20 or 30 years—the redistribution between the rich and the poor. In this case, it is redistribution between those who are engaged in industry, the producers, and the casualties of the country, the aged, the poof, the unemployed, those who for some reason or other have fallen out of work. Everyone can see the very great social advantage of the provision that is being made for the casualties, but one must relate that to the obvious industrial danger of the burdens that are being put upon the producer, because the time will come when, by contribution and taxation, so much will be taken out of a man's potential earnings that the incentive to work will be largely removed.

I cannot today discuss the alternatives that lie before the Chancellor of the Exchequer—increased borrowing to meet an increased debit, leading obviously straight to inflation; the maintenance, or indeed the increasing, of taxation, with all the reduction of incentive which that has already been shown to have; or the only other alternative, a drastic revision of the nation's expenditure and the commitments which the nation has undertaken. It would be out of Order to discuss those things, but without knowing that background, and without knowing what is the choice of the Government, a Debate of this kind is limited and to some extent unsatisfactory. If a Debate of this sort is to become a permanent feature of Parliamentary life year by year, I think something has to be done to try to relate finance to economics and allow us to have the information on both of them simultaneously.

The only other point I want to raise concerns the President of the Board of Trade. I hope he will take what I say as I mean it when I say that I am very sorry it has been found necessary to send the right hon. and learned Gentleman to India. I yield to no one in appreciation of the tremendous importance of solving our political difficulties in India, and I fully realise that the connections which the right hon. and learned Gentleman made on his previous visit, and his knowledge of the problem, must be of great value in that solution. Nevertheless, he has a tremendous burden on his shoulders here. In the days of reconversion, he is probably the key Minister of the Government. I am sure he would not say that things are so settled and so safe that he can stand back while things work themselves out; and we have no idea how long the mission is likely to last. I was going to suggest to the Government, in exchange for the right hon. and learned Gentleman the President of the Board of Trade, that the Lord President of the Council, with less Departmental responsibility, should go instead. I was going to say that we would gladly see him go and wish him a safe but not rapid return; but after today, I am not so sure I am prepared to make that offer.

I want to raise with the President of the Board of Trade the question of control, and I do not want now to raise that question in a controversial sense, whether the powers which the Government are taking are more than they need, or whether those powers are being taken for a longer period than is necessary. I want to deal with that quantum of control which is agreed upon by all of us. Hon. Members on all sides agree that, during the transitional period, there has got to be some measure of control. What I want to ask the right hon. and learned Gentleman, in all seriousness, is whether it is possible for him to make an examination, not only in his own Department, but also in those Departments whose regulations and orders affect the trade and industry for which he is responsible, to see exactly how the details of those controls are working. I know that a control, an order or a direction of some kind can appear reasonable when it is taken at Ministerial level upon general lines, but it may be quite different when that general decision has been worked out in detail and when it is translated into the actual orders and directions which go down to the individual firm or enterprise. Everyone knows how it works. Civil servants in Departments do not add controls and permits simply for the sake of doing so, but when the Minister has given a general directive as to what his objective is, somebody thinks of some way in which that objective can be avoided, and so a new provision has to go in to deal with that evasion. Somebody else thinks of another loophole, and a new permit is put in to deal with that. Somebody thinks of some inequality which might be caused between individuals, or between different parts of the country, and to guard against that possibility, another control goes in, until at the end, in order to make quite certain that you do not have any of these mistakes or inequalities, you get a system which may be far more elaborate, cumbersome and burdensome than the general purposes of the control require.

I had an example of that sort of thing in my own constituency. It was not connected with the right hon. Gentleman's Department. It was the case of a factory owner, who had part of his factory damaged during the war. He wanted certain repairs done to the factory so as to be able to increase his production. He went—I think it was to the Ministry of Works—and told them, and they said that they would certainly agree, but first he must get a certificate from the contractor that he could do the work without getting any more labour from the employment exchange. He got that certificate. He was then told that the certificate would have to be examined by a regional committee to ensure that, in giving the certificate, the contractor had been accurate. He went to the regional committee. He was then told that as the sum involved was over£ 5,000, the decision of the regional committee on the certificate of the builder would have to go to a national committee who again would have to discuss it. Each of those occasions could be justified—the certificate of the builder in order that there should be no transfer of building labour wanted elsewhere; the investigation by the regional committee to make certain that there was no evasion of the Order by the builder and employer.

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

I do not think that would be the reason. I think that it would be to see that, with the scarcity of building labour, one individual was not getting a preference over something else which was needed much more urgently.

>Mr. Stanley

I accept it that was the reason. The national committee, of course, had to consider the matter to see that the administration was not more lax in one area than in another. All, individually, may have been justified; but the result was that it took four months for the permit to go through. It is not always easy for ministerial heads of Departments to see exactly how the details, which have to be left to somebody else, work out. I once had a very salutary experience. Having been Secretary of State for War, I found myself, within a few weeks, a junior staff officer, dealing with the War Office, and I can tell you that it looked quite different. I remember that it was not very long before I was saying about my successor, my right hon. Friend the Member for Warwick and Leamington (Mr. Eden), exactly the sort of thing that preceding majors had been saying about me. It is for that reason that I am asking the President of the Board of Trade whether he thinks that anything can be gained by looking at the result of these Orders as a whole. Each one of them—each permit, each licence, each application, each committee—I am sure could individually be justified. What you have to see is whether the cumulative effect of all does not make the remedy worse than the disease; and whether, if you remove any of them, it would be true that it would leave room for a mistake here, an evasion there, and an inequality somewhere else, and whether all that would not be more than made up for by the greater freedom given and the greater urge and stimulus to trade.

I close as I began, with a reference to the speech of the Prime Minister. So far as it went, I liked its frankness and courage, but I wish that frankness and courage had gone further. I wish that the right hon. Gentleman had made yesterday the speech which I am sure he will have to come to this House and make within the next two or three months. Hon. Members will recollect a period when the war was described as the "phoney war." It was not that the dangers during that period were any less real or any less imminent; they were only less apparent to the people in general. That, I believe, is the situation today. If the right hon. Gentleman came down with the same appeal that was made to the nation in those dark days, he would, I am sure, get from the whole nation, and certainly from hon. Members on this side of the House, the same spirit that was elicited then.

5.12 p.m.

Mr. Edward Porter (Warrington)

I am afraid I do not understand the Opposition in their attempt to be real so far as this discussion is concerned. I have to confess that I am looking at this question from the standpoint of bitter personal experience as a trade union official. I want to be helpful, but my experience leads me to say, very definitely, that I have yet to find a group of employers who are sincere for the welfare of their workpeople. I say that as one who has been unemployed. I have queued up when it was impossible to obtain work. I have tried to help local authorities to find work for the unemployed. We have to admit what was said yesterday by the right hon. Member for Aldershot (Mr. Lyttelton). The conditions were such that we had to find work, and when we found it we had to allocate it so that no one worked for longer than 13 weeks. At the expiration of that period, he was discharged, to give some one else a chance of working and getting stamps on his employment card. I candidly confess that many of these jobs lasted longer than they would otherwise have done owing to the fact that there would be no further work when they ended. With that experience, I have to ask myself if this suggested spurt, to try to find work, is going to be for a period of five or 10 years. What is going to happen at the expiration of that period? When I look into the field of amalgamation, I find myself in this unhappy position. Everyone can quote cases of firms amalgamating, and it would be correct to say that some of the staff have been compensated, but so far as the ordinary workers are concerned they have been given their cards and have had to queue up at the labour exchanges. The years of service which they may have rendered to their firms are of no account.

On the other hand let me point out the effects of amalgamation. The head of the great firm of Boots, speaking in the House of Lords on 27th July, 1944, made this statement regarding amalgamations: My own firm, if it wanted to, during the past 20 years could probably have put all the chemists out of business, but it would not have been right and it would not have helped employment. It is a thing that you just do not do. But what is our actual experience of this firm? We have known it to work without the slighest idea of the welfare of other chemists. We have known it to purchase a site as near as possible to some other chemist and put him out of business by unfair competition. We face the position today, which was put by Lord Beaverbrook also in the House of Lords, that four firms in this country in prewar conditions decided the price of meat every day. I have to ask the right hon. Member for West Bristol (Mr. Stanley) how can we get out of working men's heads the ideas which result from a position like this. He was referring to controls, but what are the controls in England today to which he never referred? The worker is in this unfortunate condition; he knows that the control of the cotton trade is in the hands of two firms in this country, J. and P. Coats, Limited, and the English Sewing Cotton Company. When we come to aluminium he knows that only one firm in this country controls aluminium and its price, and that is the British Aluminium Company. Tinware is controlled by one group, the Metal Box Company, and as far as soap and margarine are concerned, the worker knows that these are controlled by the great Lever combine who force the people to pay the price they fix. The worker also knows that his sugar is controlled by one firm, Tate and Lyle Ltd., and when we come to paper for household decoration he knows that the great combine in Lancashire, the Wall Paper Manufacturers, Ltd., control that industry. As regards artificial silk there are only two firms—Courtaulds and British Celanese. What the worker knows and what I would ask the right hon. Member for West Bristol to realise is that in the cotton industry the cotton is picked abroad, brought to this country and sent to Lancashire, but before it is made into shirts and sold to the buyers there are 15 groups who must get a profit out of it. Is the right hon. Gentleman going to tell the workers of this country that that is a state of things which ought to exist.

Very definitely, there is a huge combine in the electricity industry which was formed just a few months ago. Directors released from their directorships were compensated by sums of£33,000 each, and were found improved financial positions with the new combine. I would also ask the right hon. Gentleman to take a note of this. I have found that the workers in many cases are afraid of inventions. 1 have in front of me a page taken from the weekly journal of the Master Builders' Association called "The Builder," which deals with new inventions for the trade. Anyone can see this new machine working in the London Brick Company's works on the way from Euston to Carlisle. I had better read the statement in this advertisement: Conservation of man power and of fuel. One example is this one man operated excavator which can dig 10 tons at a bite—replacing 530 men. Every time the bucket is filled, one ton of fuel is saved. That machine is operated in two or three of the works belonging to the London Brick Company. Another thing I want to ask the right hon. Gentleman to think about is this—the fixing of piecework prices in various industries I say very definitely there are a few firms who are genuine and who do control the period which is fixed for piecework prices. They will allow a price to run for a period of three months and then they will accept it. But there are others who try to follow the American methods. They bring a piece of work into one of their departments, and offer the worker a sum of money to produce that particular article in a given time. When he has produced it, they go to another operator and say, "We paid 5s. for the production of that article. It has been done in an hour. If you can produce it in less than an hour, there will be 7s. 6d. for you." That method will be followed in that firm until they find out what they consider should be the average time to produce that article. Then we reach that state of affairs in which with similar work it is not a case of piecework rates, but so many articles per hour or per shift, as the case may be, at the hourly rate of wages.

I now direct the attention of the right hon. Gentleman the Member for West Bristol to the building industry or the civil engineering industry. In the building industry 63,000 registered builders come under Defence Regulation 56B. I suggest in all seriousness, as one who has worked in the industry, that no one would go into it except out of sheer desperation. Amenities are unknown, as they have never been introduced, and I believe it will be necessary for the Government to compel employers to introduce amenities. One of the practical difficulties we have to face in that industry is that the majority of those 63,000 firms are one-man businesses or at most do not employ above a dozen work people.

My allegation applies to the few big firms in the country, which go to jobs which might last 18 months to two or three years. Consider a foundry works. A wife is afraid of her husband coming home because she knows that the whole household wall be disturbed by the dust which he brings in on his clothes. No sensible parent today wall attempt to put his son as an apprentice into the moulding industry, and I say that with regret. Just as a miner advises his son never to go into the mines, a moulder will say to his son, "If you want hard and unhealthy work, with plenty of sweat and not much money, be a moulder, but if you have any sense go into a different industry."

I believe that if the Essential Work Orders were removed, large numbers of men and women would leave the badly paid industries in which they are working, industries which also have very few amenities. In many industries, holidays are given with pay, and we are now extending the one week to two. I would like to quote the case of a Mr. Cunningham who was responsible for starting a holiday camp in the Isle of Man. It was for working men and women, and it was a huge success. It is true that it was rough until a few years ago, but it was cheap. Now, Mr. Cunningham has sold to a company. Before the war, a stay at Douglas Camp cost£2 5s. 6d. a week for the lower grade holiday, and£2 9s. for the better grade holiday. The new company which has taken over say they intend to make, not£34,000 a year, but£80,000 a year, and that they intend to do it by increasing the£2 5s. 6d. holiday to£4 4s. and the£2 9s. holiday to£4 10s. With every move the worker makes to try and improve his conditions, it seems that there is always somebody ready to make sure that things will be so organised that the worker will lose the benefit of his better conditions. That is a little sharp practice. The new company which has taken over Douglas Camp intends to "rook" the working people of this country who want to spend their holidays in the Isle of Man.

I agree with what has been said about Pay-as-you-earn. There does not seem to be much complaint from men and women about the tax taken for a 47-or 48-hour week, but there is bitter complaint when the tax is deducted from overtime. I believe it would be a step in the right direction if it were possible for the Government to give an assurance that overtime would not be taxed in this way. There are one or two very enlightened employers in the country; you can count them on. two hands. Those employers provide all the required amenities, and do not want any praise for doing it. They do it as a business proposition.

When a man enters their works there is a place for him in which to change his clothes, and if he is working where conditions are unpleasant he is provided with a complete outfit, which is afterwards left at the works and washed and repaired at the employer's expense. How many employers could do this, if they showed the slightest interest in the welfare of their employees? One or two firms, because it pays them, have gone to the extent of repairing the clothes they provide for their workers, some have provided free a complete set of overalls twice in 12 months—I am talking about the pre-coupon period—and have offered another set of overalls at the wholesale price.

I find it difficult to believe that employers will co-operate in our efforts to avoid depressing wages, and to prevent unemployment, in the future. A new Measure is to come into operation in March, whereby employers who employ over 25 people are compelled to engage 2 per cent. disabled workers. I have had experience of industries in which the eyesight of workers has been failing, but where they would do their damnedest to manage without spectacles, because they knew that the moment the employer saw them wearing spectacles, they would be instantly dismissed, ostensibly for some other reason.

Having gone through all this it is exceedingly difficult for me to persuade myself that the employers would try genuinely to co-operate with us. Everything we have obtained has been forced from them. What grounds have they given us for saying that they would prefer to give a guaranteed wage? Why was it necessary that the Essential Work Order should be introduced, and how many employers— beyond half a dozen or so— have volunteered, without an application from the trade unions, to offer their workers a fortnight's holiday with pay? Nevertheless, I know that there must be some kind of co-operation. I have been the chairman of national joint industrial councils for a number of years and I know that, if the trade unions officials could be made to believe that the employers of this country were genuine, they have sufficient influence with the rank and file to enable us to get through this particular period which looks so black. If we were given that assurance of no more unemployment, no more depres- sion of wages, it would go a long way towards helping us to bring forward the day to which the majority on these benches are looking forward.

5.32 p.m.

Lieut.-Colonel Sir Walter Smiles (Down)

It gives me particular pleasure to speak now and to congratulate the hon. Gentleman the Member for Warrington (Mr. E. Porter), who, I am happy to say, is an old friend of mine whom I have often heard speak on previous occasions in the Blackburn Town Council and at social functions. The speech he has just delivered was extremely interesting and I, for one, have profited from it because until now I never knew that the meat prices in this country were controlled by only four people. What he said about the holiday camp was also interesting, but I would think that whoever bought that holiday camp would have to pay higher wages to his painters and to the people who work in the camp, and that, as wages go up, every hotel and holiday camp has to raise its prices. I know that all hon. Members will be very glad to hear the hon. Gentleman speak on many more occasions. I look forward to listening to him.

The speech of the right hon. Gentleman the Lord President of the Council was very interesting, and I think he was very clever in the way he put forward everything of which he could speake favourably and avoided the most dangerous subject, which is coal. That, of course, is the advantage the right hon. Gentleman has from his long experience in public life. One point he raised was about the Stirling aircraft. I believe Stirlings were actually produced in Belfast up to the beginning of 1945—the right hon. and learned Gentleman who is now the President of the Board of Trade will have these facts at his fingers ends—and that it was decided that the Stirling was no good as a bomber but would be used as a transport plane. The contract was given, I believe, by the Coalition Government and not by the present Government. The only point I have to raise is that 40 per cent. of the capital of Short and Harland in Belfast is owned by the Government and 60 per cent. by Harland amp; Wolff. There are very few contracts coming their way at the present time and very few aeroplanes in the world for passenger traffic. I would like to hear that a good contract is to be given to Short amp; Harland, who have the men trained and the jigs available to make good passenger aircraft.

I do not look upon this Debate as really a party matter. We would all like to see the whole country prosper, and it does not matter who gets the credit if some good is done. In any case, I have sufficient confidence in the astuteness of the party opposite to know that, if any good is done, they will take the credit anyway. But some good Tory speeches were made from the opposite Benches. They might easily have been made by an early Victorian father addressing a family of young sons—" Work hard, save your money, be kind to Granny and the cat, and all will go well." I think that after seven years of war there is a sort of sales resistance put up against too many speeches about "We are going to have pie in the sky very soon." People now get too many of these "pep-up" speeches on the radio and they just switch over to something else. I believe that it is just as possible to get indigestion from over eloquence as from over feeding, although it is difficult to do much over feeding at the present moment.

The hon. and gallant Member for Lichfield (Major Poole) also said some things with which I agree. He said he had no use for this austerity, and no more have I. I believe the people have worked hard for seven years and that now we should give them a bit of fun, an incentive to work. I know that in Russia they have different incentives. The man who drives in so many thousand rivets in a week is feted all round Moscow and Leningrad. I do not know whether the trade unions here would agree to such a procedure, but I have heard a good deal of congratulation to Russia from the opposite Benches in my time.

Why do people work? In the last war they worked out of patriotism. Some work because of vanity, or conscience, or boredom. Most of us work to get some good food inside us, a warm fire, a comfortable home, and a bit of fun at the weekend. This may take a different form, a football match for a man, or to dress up smartly for a woman, but. at any rate hard work and thrift do not automatically ensure these things nowadays.

There are lots of employers racking their brains for ways and means to give their workpeople the incentive to work. Nowadays some employees work hard for three, four, or five weeks, and then take a week off at the expense of the Government in the form of the return of their Income Tax. I heard only the other day of an employer who wanted his secretary to work a few hours later in the evening out of zeal for the export drive. The young lady said, "What is the good of my working this evening? I shall only get about is. 6d. or 2s. out of it." Her employer replied, "I want you to stay very badly tonight. I suggest that you work on these letters tonight free, and tomorrow night I will take you out to a theatre, give you a good dinner at a restaurant, and we can dance together."

The fact that the young lady was attractive was no great handicap. The worst of it was that some friend of his wife saw them and—I will not say "the fat was in the fire," because nobody today gets any fat and very few people have a fire—but at any rate there was considerable trouble, and it just shows the lengths to which people will go now to help the country in its export drive.

What hon. Members opposite are afraid of is a financial crisis abroad; we may as well face it. I believe there was a time in 1940 when the pound note was worth only 2s.6d. in Portugal. We must have lots Of raw materials from abroad— timber, oil, tobacco, cotton, and one of these days we shall have to import coal. Foreigners who hold huge credit balances of sterling may get tired of this sterling; they may think it is only good to paper their rooms with, and it is up to us in this country to prove that sterling is sterling and that the phrase "as good as a pound note "is still true. The hon. Member for Smethwick (Mr. Gordon-Walker) was a great advocate yesterday of unbalanced budgets. Indeed, from his speech I made out that the more unbalanced the budgets were, the better for us all. I thought it was a sort of Social Credit speech which, up to date, has not been proved even by Major Douglas in Alberta. I do not agree with that doctrine, that the more you unbalance your budget the more work there will be in this country.:

The right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) raised the question yesterday of getting some of the markets and exchanges in London for cotton, base metals, etc., going again and I heartily support him, especially in regard to the market for rubber. We used to have sales of rubber every week in this country and it was one of our best exports to the United States of America. Now rubber is a commodity, which, when manufactured, increases about 20 to 30times in value over the raw material. We here, and people abroad, want hot water bottles, tyres— cycle, motor and aeroplane— and there is much good business to be done. We also want golf balls, and I have found out to my cost that the synthetic ball goes about 25 yards less than the natural golf ball we had before the war. I understand that the President of the Board of Trade has made a deal over rubber, and from the figures given by his Ministry I see that 66,000 tons went to the United States, 16,000 tons to Soviet Russia, and only 8,000 tons came here. With regard to price, we have only got from the United States of America is. a lb. for the rubber produced in Malaya and Burma. I believe that if that went on the open market we would get 2s. 6d.or3s.a lb. I know that the right hon. and learned Gentleman the President of the Board of Trade is a generous, big-hearted man in all that he does, but I see no reason why he should be generous and big-hearted with other people's property, especially with the rubber which belongs to the British Empire.

We hear all sorts of stories about that rubber deal. Nowadays, of course, if they are wise, people believe nothing of what they hear and only half of what they see. I heard two stories about it. One is that the Americans came along and said, '' are going to want a big loan from us and unless you let us have that rubber at is. a pound, there is no loan coming for you." The other story is that when they came along to buy the rubber, they said, "If you do not let us have that natural rubber at a knockdown price, we shall put our synthetic factories into action and break the Malayan plantation rubber industry into bits." I do not believe they would break that Malayan industry so easily, and I believe that if we let the open public sales take place,.it would be better for everybody in this country.

Yesterday we heard cotton and automatic looms discussed. I remember going over to the United States about 1934 when I had the honour to be the Member for Blackburn. I saw an American factory where the Northropp automatic looms were made in Draperstown, in Rhode Island. The managing director there showed me a lot of old looms. He asked me, "Do you know what those are for?" When I said I did not, he replied, "I am going to break them up." Every time he sold a Northropp automatic loom, he got the old second hand loom and gave a good price for it to the weaving factory, and it was broken up. They told me there then that one white man and six negro boys were running 100 Northropp automatic looms. Naturally, the weavers in Lancashire strongly objected to. such things being introduced into Blackburn; in fact, there it was generally four looms per weaver, often only two looms per weaver, as most money was made on the highest quality cloth.

With regard to the engineers, who are the aristocracy of labour—as I am quite sure the hon. Member for Dumbarton Burghs (Mr. Kirkwood) would agree— the last time I saw figures, there were 1,500,000 people engaged on munitions, though the right hon. Gentleman the Lord President of the Council has said that those figures have been considerably reduced. I can well remember in 1935, when the Government were beginning to step up the Votes for munitions, I think it was the right hon. Gentleman himself who about that time said, when he was criticising the raising of the Votes for the Navy, the Army and the Air Force, "Who do you want to fight?" We did not want to fight anybody; all we wanted to do was to protect our own skins and to support our Allies. But I might say equally, "Who do we want to fight today?" It cannot be the United States of America for they have always been our friends, and they have a Navy five times as big as ours. I am also quite sure, with the right hon. Gentleman's party in power, it could never be Soviet Russia. So I think that the amount we are spending on munitions and equipment for the Armed Forces should be decreased very quickly.

The right hon. Gentleman the Member for Aldershot mentioned the Excess Profits Tax. He said it was a bad tax. It is also very hard upon our industries because in India, which now produces iron, steel, cottony jute and all sorts of manufactured articles, the Excess Profits Tax has never been more than 66⅔ per cent. during the war against our 1oo per cent. and when any competition starts again, those Indian industries will have had a considerable amount of money for re-equipment which the industries here have never been able to put by.

I would suggest that we stop some of this munition and war work and. get rid of some of the temporary non-industrial civil servants. Three or four months ago I put down a Question to the Minister of Aircraft Production asking how many non-industrial civil servants there were in his Ministry and his answer was 15,000. I hear from Harrogate that many civil servants are bored to tears and want to get back to civilian employment. In the last three months the number has hardly been reduced by 200.

I agree that we do not want to run down our industries. We want, like the American Rotarians, to give a good "ballyhoo" and say we have the best industries in the world, the best men running them and the best machinery. But we want to forget now the blood, and sweat and tears. We have all had enough of that. Let us go in for a bit of food, fuel and fun at the weekends.

5.51 p.m.

Mr. S. N. Evans (Wednesbury)

The hon. and gallant Member for Down (Sir W. Smiles) has just said that we cannot afford to run down our industries. We agree with that, but, on the other hand, we cannot afford to overlook deficiencies which impair our competitive force, and which are prevalent in certain of our industries at the moment. Two overriding tasks confront this Parliament. The first is to play our part in bringing about a durable peace. The second is to help bring about that industrial renaissance without which our standard of life cannot be maintained. Both these tasks necessitate the asking of searching, difficult and, sometimes, embarrassing questions. But if our purpose is to be achieved, we cannot shirk the issues.

The right hon. Gentleman the Member for Aldershot (Mr. Lyttehon) was the first yesterday to raise the question of exports. He spoke of how vital they are to our life and I accept what he said 100 per cent. In fact I go further. The extent to which we depend on imports is insuffi- ciently known to our people as a whole. Unlike the United States of America and the Soviet Union, who have oil, copper, cotton, wheat, manganese, timber, all they need to feed and clothe themselves, and furnish their industries, our only basic raw material is coal. In these circumstances, whereas imports to the United States are luxuries, to this country they are the means of life. If we are to sustain our population of 47,000,000, imports will have to be found on a prodigious scale. This brings us up against a very hard fact. Because nations, like individuals, are not prone to giving things away, we have to pay for these imports, and the only way in which we can pay for them is by exports. Here we are up against another hard and inescapable fact. Just as the prudent housewife rightly refuses to pay more than she can help for necessities, so it is with importers. To make our wares attractive in the coming years, we shall need to market goods of first-class quality at competitive prices, and only thus will full employment be assured. The skill and energy of the British people have always found their best expression in fabrication— fabricating raw cotton into sheets and shirts, fabricating steel into ships, automobiles, locomotives," electrical apparatus—all the paraphernalia of a machine civilisation.

The importance of steel to our economy cannot be over emphasised, but the British steel industry, as at present constituted, gives rise to serious misgivings. A motor car crankshaft costing£I 10s. od. in the United States, costs£3 8s. 5d. here. Steel castings in many instances are double the price. Forgemasters tell me that steel represents more than a third of their costs, and that within the past few months the price of silicon chrome valve steel has increased as follows:¾ by½ inch ground bar in September, 1945, was£per ton and is now£144 a ton, an increase of 24 per cent.;??? by⅜ which was£ 118 is now£ 170, an increase of 44 per cent.;⅜by??? which was£ 128, is now£ 193, an increase of 51 per cent.;5/16 by¼which was£ 138 is now,6247, an increase of 79 per cent. These figures are somewhat alarming. Why substantial increases should occur now the war is over is difficult to analyse, for the reason that during the war there was continuing competition between the Germans and ourselves for Turkish chrome, the important factor inchrome steel. Now that the war is over, and Germany is no longer competing for chrome it might be expected that prices would diminish, but they have increased as I have related to the House The backwardness of the British steel industry and the evil of cartelisation is well exemplified by the history of the New Universal Beam Mill soon, we hope, to be erected on Tee-side.

Just after the Boer War, an Englishman, Henry Grey, tried to interest the steel industry in his new process. Frustrated in his attempts, he emigrated to the Continent, where he met with a very different reception, and 40 years ago in Luxembourg the first universal beam mill was erected. The Americans, quick in the uptake as always, quickly realised the significance of the new discovery, and today they have five of these mills, the last one built in 1930. Here in Britain—it is never too late to mend— Dorman Long are at present considering the blue prints of a process which was first offered to the steel barons in this country 40 years ago

. Tremendous economies will be effected by this type of mill, and savings in weight of joists, fuel consumption and fabricating costs will flow from this new Teesside venture of open hearth steel plant, universal beam mill and the up-to-date ore handling lay out, which will have a yearly capacity of 2,000,000 tons. Constructional engineering, bridge building and shipbuilding will gain added competitive force. But the question we have to ask is: Why was not this development started before nationalisation became an issue? Why was not this type of mill installed between the two wars? In the absence of a satisfactory answer to this question, I am bound to say that an industry which has revealed such a lamentable lack of enterprise is quite unfitted to plan its own future. I understand that during the war the Government called for a report on this industry, a report which has never been published, probably for good and sufficient reasons. I would ask the Lord President to consider whether it would not be a good thing if that report were now released.

Let me turn for a few minutes to a horse of a different colour, a horse which may not be so popular on this side of the House. I was glad indeed to hear the Lord President speak of the Government's willingness to consider a wages policy. I believe that this Government, in collaboration with the great trade unions, which did such magnificent work during the war, will, sooner or later, have to evolve a wages policy. It is manifestly absurd to expect a miner, working in conditions of acute discomfort and considerable hazard, to be satisfied with the same remuneration as a person handing out nylons, when they arrive, under.conditions which are clean, comfortable and free from risk. I believe that there should be a national minimum wage level, and after that incentives for the less attractive industries.

I have to say this, and I say it with humility. Despite what was said here yesterday, let no one be deceived. In the ultimate, economic salvation depends first and foremost on output per man hour in those industries upon which we depend for export. And when I hear of one, eminent and influential above all others in his calling, talking in terms of increased output per man hour jeopardising future employment, I am bound to say I am both shocked and alarmed. [Hon. Members: "Who was it?"] I would rather leave that, if hon. Members do not mind. If anyone in this country thinks that the national income can be raised without increased output, they are living in a fool's paradise. Holidays with pay, a guaranteed week, subsidised housing, health and educational services, our whole social programme—all will turn on whether we are able to market our goods competitively two or three years hence.

Part of the job of the Government is to see that every mechanical aid is placed in the hands of the workers in industry, and the job of the workers, whose common origin I share, is to make the best use of those mechanical aids. Given that, the bad old days of unemployment and malnutrition have gone for ever. The problem today is not the equitable distribution of the cake. Always having regard to the need for incentive, and the Russians recognise that, the Government will see a "fair do." What we need today is an increase in the size of the cake, in other words an increase in the national income. Whilst in the period of capitalist expansion it may have been morally right and economically possible to do no more than one could help for as much as one could get, today, with capitalism in decline and Socialism on the march, and with a Socialist Government installed in this country, such a policy is quite indefensible, mortally dangerous and economically suicidal. Let me give one illustration. During this year Sweden will burn between 40 and 50 million cubic metres of wood. She will do that to keep her industries going, because she cannot get coal. The Minister of Health, whom I am pleased to see here, is trying to build houses for us, but he cannot build houses without timber, and we depend very largely on Sweden for timber. Here is the position that confronts us. It does not need a university education to understand it. Sweden wants coal, we want timber; no coal, no timber, no timber, no houses, or, at any rate, fewer houses.

Finally I would say this: The position in which Britain now finds herself does not permit of policies based on emotion or wishful thinking. What we need is skilled and energetic planning and elbow grease. Let Government and industrialists provide the skilled and energetic planning; let the Government send its best radio personalities to the microphone to explain the position to our people— and the elbow grease will be forthcoming— forthcoming from the same people who have always seen Britain through her hour of tribulation, the common people of the Commonwealth, the best bred mongrels in the world.

6.10 p.m.

Sir Ralph Glyn (Abingdon)

I am sure the whole House has been interested in the concluding remarks of the hon. Member for Wednesbury (Mr. S. N. Evans) with which I think there can be no dispute. It is interesting to an old Member like myself to hear how many on all sides of the House are in agreement, as the Lord President said, on what we want to do. I want to touch on two or three aspects that I do not think have been spoken of so far. I remember after the last war the damage that was done by what was known as the Geddes Committee. It should not be taken that, because we have not a Geddes Committee now, we should be oblivious to any waste which is taking place. An. hon. Member opposite last night made an extremely interesting speech in which he drew the attention of hon. Members and the Government to a considerable quantity of raw material which is mouldering in various dumps. I think all of us could add examples of that.

What this country wants more than anything is to feel that there is efficiency, and that this House is doing its best as he guardian of public expenditure. It s the duty of Parliament to do that, and it is the task that is laid on all of us, respective of party, to see that the taxes raised from the people are properly spent without waste. Nothing depresses a country so much as to see waste when the people themselves lack the things which they require. During the war the Select Committee on National Expenditure, on which Members from all sides served, did its work. I served on that Committee throughout the war and the reports of that Committee are available to hon. Members, although they are reports of proceedings of the last Parliament. For the reason that we have not got a Geddes Committee or a National Expenditure Committee, there is, I think, a great need indeed for some Committee of this House to go into these matters. We cannot afford any waste. We are right on our beam-ends as regards winning through to this time of reconstruction. The point is that if all of us, irrespective of party, are to help, as I imagine we all want to do, the industry of this country to get on its feet again, we have to remember that it is no use discussing in the House of Commons the units engaged in industry as if they were not human beings. It is an extraordinary thing that only one hon. Member—and his was a maiden speech— drew attention to that fact, and one could see how earnest he was. That was the hon. Member for Warrington (Mr. E. Porter). His experience of a long life in industry has made him pessimistic and cynical. I do not believe we have gone through this war without having learned one great lesson, whether we are employers or employed. That. lesson is that we cannot get anywhere if we make unnecessary rows and troubles It is only. by comradeship and human understanding that we can ever get results. We learned that in the Services. Surely we know it in industry? I hope the hon. Member for Warrington will have his doubts concerning the decency of employers removed before this Parliament is over.

The Lord President said this afternoon that he thought it necessary for all partners in industry to pull together. Cer- tainly—so do I. I do not think we want to have any recriminations. We should try to see the best in people, not the worst. There is one aspect in regard to workers in this country which I would like to mention.' It is something about which we all have to think. The curious thing is that in the industries of this country the weight of representation, as I understand it, on the Trades Union Council, is confined very' largely to the heavy industries. The Prime Minister gave some figures which may change the aspect slightly, but I believe I am right in saying that there are in this country, engaged in productive industry, over 4,000,000 men and women. We want to raise that to a figure of 5,670,000, which was the figure in June, 1939. We have to remember that productive industry is the type which has changed most as a result of modern experience and new industries coming in. In many parts of the country we want to see established some of these newer industries. The other day the President of the Board of Trade— I think he should be congratulated on it—was able to announce that over 7,000,000 square feet of war factory space had been handed over, which is going. mostly to new industries and is to employ 35,000 people.

If that is going to be done up and down the country in different industries none of these men can be employed unless the basic industries, that is to say power and transport, are able to support them. There is a most desperate situation, which I need not labour, in regard to coal. Hon. Members probably know that railway stocks are down to a little over 7½days' supply. That is the lowest figure we have ever reached. It does not require much imagination to realise what will happen if we have not enough haulage to remove the coal from the collieries to the places where it is required. It is highly dangerous to be cut down to such a very small reserve. Those facts, as the Lord President said today and the Prime Minister said yesterday, can be overcome if there is more publicity in regard to the economic position which we all have to face. I am sure the Government deserve to be congratulated on announcing to Parliament and to the country today the set-up of the committees which are advising the Government, and the fact that publications such as the Statistical Digest, are to be made public. I am cer- tain that in every industry, certainly in the industries on which so many of us depend, if the facts of the case were better known and. fears as to the future were removed, we. should have far better results. It is equally true, as the Prime Minister said, that there is a tendency to condemn a particular industry which is much in the public eye, and the output of which can be more easily measured than that of other industries. Undoubtedly, there are many industries in which we do know that the production is not really up to the standard which has been set. It is a curious fact that in 1898 there were 11,000,000 fewer people in this country than there are now and yet the standard of production per person was higher than it is today. That was achieved with a smaller amount of machinery.

One of the most welcome things in this Debate, as I am sure the President of the Board of Trade will agree, is that there has been not one speech from any part of the House which did not emphasise the necessity of using up-to-date machinery in the future. In the past there have been laggard employers and workers who believed that production machinery meant unemployment. I believe that to be a complete fallacy in modern conditions. I believe it means better employment and better output, but, while more output may be achieved by methods of mass production, arid I think it might suit us in certain cases, it will be a bad thing for this country it the craft industries suffer, because the individual skill of the British workman and his skill as a craftsman are things which we ought to safeguard in every possible way.

There is one other point I want to mention. The Prime Minister, yesterday, referred briefly to the international situation. I do not think any of us would be doing our duty if we did not face the facts of the present international situation. I think that situation is fraught with danger, and that the facts ought to be stated. The Prime Minister referred to "external disturbances," and he warned the House that, if there were "external disturbances," it would be difficult for industry to sell goods abroad, and very hard for this country to re-establish its position. I remember very well, in this House in 1918, we were confronted with the danger of certain threats in Turkey, and it meant the maintenance of large forces. I should hate to think that anybody on this side was trying to get any cheap advantage by goading the Government into retaining men with the colours, and I am certainly not one of those. I think it would be equally wrong to condemn the Government for not taking out of munitions production, men whom the Service Departments think it necessary to retain. What would have been said if a Socialist Government had started cutting down, against the advice of those responsible for building up supplies for the Services? I feel very strongly that anything done by a Government of any political Party, must be done, at a time like this, on the advice of the Service chiefs, which I assume has been given.

We are possibly building castles in the air. I hope not. We have to be ready to face any emergency, and, frankly, I do not like the outlook. I think that, in April, when the snows start melting, people will start moving I know that, in certain European countries, who see, perhaps, more than we do in this island, they are making certain preparations. At a time like this, with great difficulties abroad, when the prestige of this country has emerged from the war so high, I think it is terrifically important that we ought to do all we can, not only to put industry right, but to see that we do not do it at the expense of national defence—or, I should add, at the expense of scientific research. There is so much to be done now. with new weapons and ideas, that we cannot afford to lag behind. I know that it is the intention of the Government to implement the recommendations that have been made and to see that we do not waste any money in the production of obsolescent materials, but to see that our men in the Services are provided with the most up-to-date. weapons and every possible assistance, for what might be in front of them. There is no need for us all to talk in a depressed way. There is enough gloom and depression everywhere already and one does not want to add to it. There is everything to be proud of, and nothing to be afraid of. I think, however, we should face the fact that, while we are a great country, we shall maintain our position only if we are honest with ourselves, if this House speaks quite frankly and if hon. Members speak their minds.

That is what we are here for, and, having said these things, it is our duty to go back to our constituents and point out to them the terrific problems with which the Government have to deal at home and abroad.

Some of us do feel rather sad and sorry, as I certainly do, that this moment has been chosen to stir up, for what we think are political purposes, differences of opinion, but, even so, our country and our position in the world go far above these things. Although I know the workers have had a hard time, and I sympathise with their demand for relaxation, I feel I must draw attention to the fact that we are spending£500 million on gambling—on dogs and football pools and the like. How many trains have we got to run for football matches, with hardly any coal in reserve stocks which ought to be kept for industry? I hope the Government will come down and say, "No special trains for football matches until the stocks are built up." It is not for us to stop other people from having their fun, and I am all for amusement, and I think the workers have every right to get away from the dullness and drabness and hideous depression of their surroundings. Let us deal with all these things, but let us not be afraid of telling the people, "You cannot go to football matches, because there is not enough coal," if that really is the situation.

I think the situation is one in which we must not be afraid of comments in our constituencies. I think we are facing a tremendous crisis, both at home and abroad, and I hope the House will rise to the occasion and that hon. Members will speak their minds, for there is only one answer to it, and that is by putting party in the second place and the national interest first.

6.27 p.m.

Mr. Edelman (Coventry, West)

The Debate so far has confined itself largely to the question of manpower shortage, but I would like to address myself to the paradox of unemployment, side by side with a shortage of workers. We have, in centres of production like Birmingham and Coventry, large numbers of men who have been declared redundant, but whose condition is liable to develop into one of unemployment and nothing else, if their redundancy becomes chronic. We know that, in places like Coventry, there are today 10,000 workers, most of them engineers, walking the streets and lining up outside the employment exchange waiting in vain for jobs in the engineering industries, waiting to use their skill, of which now, more than ever, we have need. I would suggest that the major reason for the lack of employment of these men is twofold.

In the first place, there is the present absence of a wages policy in the country; and, in the second place, there is the danger that we have not planned for the allocation of workers according to industrial need. Let me take the second question first. Unless we decide exactly what we are going to manufacture, according to our national plan, we may find that we may immediately reach a high export level. but, in the long run, will be creating difficulties for ourselves. We have a recent example of this in the case of a motor firm which has lately contracted to supply unassembled motor cars for the Argentine, and I understand that they are preparing to export approximately 50,000 of these unassembled cars per annum. This will inevitably mean that men in this country who today are engaged, or are likely to be engaged, in motor assembly work—fitters and bodymakers— are to be deprived of the opportunity of that work. It means that if we export unassembled motor cars to South America—where they will be assembled by workers working at lower rates of pay than the workers in this country—we will be allowing firms in Britain to undercut the standards of their own workmen. The firm to which I refer has a considerable amount of American capital and, consequently, it is very likely that the consideration of providing employment for British workers is not its paramount consideration. But it seems to me that it is a consideration which the government must take into account, If we are to have a flourishing export trade and, above all, if we are to have full employment in our country, we must recognise that the most important thing is to use the skill of our men and to make that skill the most important factor in the cost of the commodity we are producing.

We have certain basic industries and certain basic resources. Traditionally, we have been exporters of raw materials, but, is my hon. Friend mentioned a few moments ago, the tune may well come when supplies of our raw materials will be so exiguous that we may have need to import materials which at one time we exported. Therefore, our prosperity depends on the amount of work we put into those basic raw materials. I would suggest to the Government with respect that they should consider in their export programme, not merely the short-term question of what we are going to export today or tomorrow in order to make funds readily available, but also what our long term policy is going to be. In our plans for industry, we must emphasise the point that what we should export is the skill of our workers. We cannot tolerate having men declared redundant and remaining redundant in our engineering industry. Clearly, when these men are transferred from the armaments industry, it is necessary that there should be a temporary period of redundancy. But I would like to ask the Lord President of the Council, in connection with the revised figure which he gave of people engaged in the armaments industry, whether those transferred from such industry are now actually in civilian employment, or are walking the streets waiting for jobs. That, I submit, is what the Government should bear in mind when considering the reduced figure of employment in the armaments industry. Are the people allegedly transferred to civilian industry actually engaged in civilian employment and contributing to the prosperity of the country, or are they merely waiting for jobs?

I turn now to the second matter, that of a wages policy which will enable those people to move from the armaments industry into industries which will be socially useful and to the advantage of the country. The way of directing the stream of workers into a given industry is a twofold one. On the one hand, there is the method of simple direction and compulsion which, I believe, all of us in this House detest. Then there is the other method, that of attracting the flow of workers to an industry by means of a proper wages policy. We have to consider what are the industries and what are the occupations which are important and useful to the country today. Is it, for example, building, coalmining or cotton which should have priority? Although the question of imposing a wages policy on the country is not one to which the Government should address themselves, at the same time I feel that, just as during the war so in peace, the Government should consult with the T.U.C. and the employers in order to consider what should be the wage levels in the various industries according to their degree of priority. They should come to this triangular agreement in order to try and fix wage levels so as to attract workers to those industries. If we did that, I believe we should not have temporary engineers—men who went into the engineering industry during the war and who prefer to remain there because the rates of pay are higher—walking the streets. They would go into other industries required for peacetime reconstruction.

Here I would like to say a word on the question of productivity. Productivity is not merely a matter of the worker working harder. It is a question of the technique of management, and we must recognise that those two elements must combine together, not merely as a description of the effort which has to go into productivity, but as a description of the men who have to take part in raising productivity. Workers and employers must combine together if productivity is to be raised. I suggest that the joint production committees which during the war had a most valuable psychological effect, even on occasions when they were of no immediate practical value, should be encouraged to remain. In order to do away with the division of the worker, on the one side, and the employer on the other, let them be called simply production committees instead of joint production committees. In that way there will be a new opportunity for workers and employers to combine in peace in order to raise productivity.

Finally, I would like to say something about the question of incentives. The right hon. Gentleman the Member for Aldershot (Mr. Lyttelton), in referring to the Soviet Union yesterday, described some of the material incentives which they give to their workers. I, perhaps, am not a Marxist materialist in the sense of the right hon. Gentleman the Member for Aldershot and, therefore, I do not wish to limit the incentives to material ones only. I believe, as hon. Members on both sides of the House have very properly pointed out, that if the workers, the technicians, the managers and the employers of this country were brought to the realisation— as so many of them have already been— that this country is really in a critical position from which we can only emerge by all working together in one great national working party, we can overcome our present difficulties and go forward to that era of prosperity in which every person will be able to participate, and in which the benefits will be distributed according to the efforts which we individually put into its creation.

6.39 p.m.

Mr. Walter Fletcher (Bury)

I must apologise in advance for the fact that my remarks will be interrupted by fits of coughing. The Minister of Health, with all the powers we have given him, has not been able to control various germs which have attacked me and, I believe, also himself. The speeches we have heard from the Front Bench yesterday and today nearly all followed the same pattern, a pattern which has been evident on other occasions, particularly when the President of the Board of Trade was speaking on the 1927 Act last week or the week before.

They followed the pattern of pointing out various iniquities in industry, as represented by the employer on this side of the House, with a brief sentence or two at the end saying, "Let us all work together." I would say to hon. Members: If you want to make the donkey work you have to give him a balanced diet, a kick and a carrot—not ten kicks to every one-third of a desiccated carrot, although that may appear to the President of the Board of Trade to be sufficient for man and beast. I believe the best result that has emerged from this Debate today is that, undoubtedly, the speeches from both sides of the House have shown a greater realisation of the fact that there must be real co-operation. There is a vast distinction between co-operation and coercion. I believe it is vital—and the hon. Member for Abingdon (Sir R. Glyn) pointed it out with great impressiveness—that this must not be by mere word of mouth used across the Floor of the House, but must be something sincere and real used by Members' in their constituencies and in speeches outside this House. If there is a danger and a.suspicion of making political capital out of co-operation instead of making it an economic reality; if we are told one thing here and something else outside, the building up again of the confidence which existed between all parties during the war will inevitably be lost.

It. took scientists two years of the hardest possible work to split the atom and produce nuclear fission. This Government, possibly inadvertently and, as they may now think, unwisely, have produced economic fission in this country at far too great expense. One of the tasks we have to set ourselves at the moment is to overcome that. The long term planning in which the Government have indulged should, in my view, not be attacked so greatly as it has been. I think industry can well learn a lesson from it and do a great deal of long term planning themselves, but they must be permitted to do so with a certain freedom of action, and with not too great a feeling of permanent restriction and control On this question of long term planning, I would point out the well known dangers which attack, on that subject, mice and men. That applies equally to Marxian mice and mandated men. Long term planning can be too long. I am afraid that one day, on the way out, when I call at the Vote Office, I may find a blue print for the next world, which, it is certain, hon. Members on the benches opposite are particularly fitted to administer.

Recently we have been engaged in a sort of process of political dry cleaning to remove a stigma. That was very successfully done by marching the troops through the Lobby. But what is much more important at the present moment is to remove an impression, and that cannot be done by that process. It can only be done by the whole country understanding that, under the lead of the Government, in view of the enormous crisis which is attacking us at the present moment, we have all decided, whatever party to which we belong, to try to return along the path towards the total war effort which resulted from really co-operating and trying to minimise our differences, and making more of the facts and policies which we can all accept. At one point during this Debate I felt a certain amount of disappointment. The Debate has taken place almost entirely in a sort of vacuum or enclave of unreality as regards what is going on in the rest of the world economically. I believe the Government have had brought home to them recently how dependent we are on the rest of the world. It is not only a question of increasing exports to other countries. It is; also a question of what other countries are doing. Indeed, the Minister of Food, who will go down in history as the Mother Hubbard of this Government, has had brought home to him how much we are dependent on the rest of the world. One of the things to which we must devote ourselves more closely in the near future is the studying of the economic plans which are being worked out with equal ability and intelligence in other countries. The world of the moment, economically, is a dry sponge capable of absorbing from every country and from almost every source an unlimited quantity of goods of every sort. A manufacturer of hollow-ware or of textiles has the choice in the export field of a dozen markets into which, before the war, he would have had to struggle to get.

But the period cannot last for ever. The one useful thing which long-term planning can do, together with the greater volume of economic statistics available, as the Lord President of the Council pointed out, is to make certain that some of the great dangers which face us are avoided Japan is a long way away from here and it is difficult to make one's friends in one's own constituency—mine is a purely industrial one—understand how extremely important events in Japan are to this country. Before the war, the economy, the wages structure and standard of living of people in this country and other countries were frequently upset and seriously jeopardised by the action of Japan—a manufacturing country in the second and third phases of development, which was directed partly by Government and partly by industrial dynasties, and which was able to dump goods all over the world and to ruin industries which were properly paid and properly run not only in this country but in other countries. Japan is a country similar to this from one point of view; it cannot support itself on. agriculture and, therefore, has to be a manufacturing country. Nothing is easier for any one of the great Powers who may be in control there predominantly at any time, to use as an auxiliary the whole of the Japanese economy to create the greatest possible difficulties for the rest of the world. The danger at the moment may appear to be a cloud no bigger than a man s hand, out those who have had an opportunity of studying it know that it is a real one. It has been announced that there is a certain amount of production in Japan which may result in the export to other markets in the Middle East and Far East of large numbers of articles which we are at the moment producing here—although, having regard to what we have suffered, we are not so far on with the process of manufacture.

Unless we are to have some measure of world control—and I foresee the utmost difficulties in it—I can see real danger to the whole of the full employment policy the high wage and the whole superstructure of social improvement which we are trying to build up in this country. It is true that what was announced at the time of Bretton Woods and the other documents which went with it—which, I think, we might call the "Bretton brambles" because we shall undoubtedly become entangled in them shortly—did lay out a general plan for avoiding some of these difficulties, but in the hard and harsh world of realism which we shall enter when we get into competition again, and when the sponge which I have mentioned will be filled up again, I have grave doubts whether these international agreements will work out as we all hope. I believe that the action the Government are taking in appointing Lord Killearn to what is perhaps a nebulous post in the Far East, will have excellent results in one direction because there must be attached to him. as indeed to all embassies and all consulates, a far greater number of well trained, qualified, young, eager, commercial attaches or commercial men than has been the case up to date. Hitherto, the commercial counsellor at the embassy has been the "Cinderella." The Ambassador might inquire every six months about the local price of carpets, or something like that, but on the whole he has not been, as he should have been, somebody with equal status with anybody else. If people had been attached to Lord Killearn's organisation they would not only have been able to keep us fully informed about Government, but about industry throughout the whole of the Far East, and countries, too. It would have been of real value.

We must not live in a sort of vacuum and enclave, which we appear to believe is possible. I have been seriously disturbed—and I am certain that is true of hon. Members on both sides of the House—by the number of speakers in this Debate who have really considered that this country can have full employment and a high level of wages quite irrespective of what is going on in the rest of the world. The nearest they get to reality is to say, "We must export." If a third party living in another country has the option of buying an extremely well-manufactured bicycle from a controlled Japan at 50s. and an extremely well-manufactured one produced by brains, partly State enterprise and partly private enterprise, in this country at 55s. there is not the slightest doubt who is going to get the order. It may be a rather long term view, but it is most important that we should not be deceived by the fact that at present the world is a sellers ' paradise, and will remain so for a long while.

That is equally true of the other important side of our economics and industry, which has hardly been touched on, namely, our invisible exports. We are waiting for the President of the Board of Trade to give us some guidance as to what he is going to do on the question of re-opening markets which are vital to this country. He may have—indeed I believe he has—no great liking for certain aspects, but I think he should consider most seriously the bad effect of taking too short, or too prejudiced, or too doctrinaire a view on that question. Some ports, such as London, Liverpool, Cardiff, Hull, and Newcastle, are not impregnable fortresses. When we get past this era there will be Le Havre, Antwerp, Rotterdam and Amsterdam as great rivals. It is creating difficulties for the future, unemployment difficulties, and is an attack on what we all desire, namely, a full employment programme, if the backing for those ports is withdrawn for some doctrinaire reason. We have seen, with regard to the port of Liverpool, how the switching of big steamers to Southampton put them back, and for many years caused a great deal of unemployment and. difficulty there. Because there are or may be certain alterations needed in our businesses in opening our commodity markets, do. not let us run the risk of allowing our great invisible exports—which have an ancillary advantage with regard to banking, insurance and brokerage—to be thrown away.

I realise that these markets cannot be opened on the same basis as before the war in two minutes I cannot help thinking that many people in this country, well informed people, and not violently biased or prejudiced, have the feeling that there is a considerable tendency on the part of this Government, under the guise which is so very easy to put forward, namely, that markets cannot be opened for this or the other not very well founded reason, to fail in their manifest duty to re-open markets of that sort. Today we heard some talk from an hon. "Member about rubber. I do not want to weary the House with that, though, of course, I had been chairman of the London Rubber Association and have spent most of my life as a rubber merchant. I would like to discover the real policy of the Government about rubber and rubber prices. That has a vital effect on us. In the Far East we are dependent on the price of rubber to maintain the standard of living of many of the producers. I would point out to the House that it is very seldom realised that 50 per cent. of the rubber is produced by Asiatic owners themselves and not by the European-owned plantations. That is the sort of question which, in the long run, if well handled will create excellent markets for us and keep full employment, but if not well handled will lead to disaster, and to a loss not only of valuable dollars, which we shall want for many years to come, but also of those markets which will absorb what will be by then a surplus of materials.

During the war there was made to the people of this country a most impressive plea, and a most successful one, by the right hon. Gentleman the Member for Woodford (Mr. Churchill), to give us all a sense of urgency. Listening day after day to replies to Questions, getting replies from Ministries, hearing speeches on various Government plans, I cannot help feeling that that sense of urgency is drooping. It is true that the Government have a large and rather indigestible meal on their plate, partly one they have cooked, and prepared for themselves. Nevertheless, if they will put aside some of the more self-appointed and indigestible portions and devote themselves to the more easy ones, that sense of urgency, of putting first things first, would translate itself into an even greater speeding up in production than we are seeing at the present moment.

My last plea is that which nearly every hon. Member has made, but I should not like to sit down without having put it forward. Between the two sides of the House let us not drift further apart on economic questions. Let us come closer together. During the war we cannot have avoided learning the lesson that it is no service to point out the manifest failures of 20, 30, 40 years ago, and even further back than that. The Government have been given, I will not use the Mesopotamian word "mandate," but the power and the responsibility. Treat us well, give us a chance to help and assist in every way without too much kick and with sufficient carrot, and the Government will find they will have earned the gratitude and possibly, though I do not say this with any confidence, the votes at the next election.

6.58 p.m.

Mr. Diamond (Manchester, Blackley)

In view of the short time at my disposal, the hon. Member for Bury (Mr. W. Fletcher) will forgive me if I do not follow up his points. He referred to hon. Members on this side of the House as being "mandated men," and to those on his side of the House as being "Marxian mice." I think, particularly as far as he himself is concerned, that is a rather good example of the British attitude of understatement.

The keynote of this Debate has, of course, been the shortage of manpower. I am sure hon. Members opposite would agree with me if I quote from one of their famous predecessors, Disraeli, who said that there can be no economy—and what we must look for is economy in manpower—where there is no efficiency. Therefore, I would like to devote a few minutes to the question of efficiency, not in terms of how one is to achieve efficiency—because I think 1 know sufficient about it to be able to say it cannot be done in a few days or a few weeks—but to the question of how one is to measure efficiency. We have all heard, and been very glad to hear, the Government statement with regard to increasing figures. The disputation that has gone on has been, to a large extent, on the question of what constitutes efficiency, and: whether we are all being as efficient as we can, either in management or in production or any other phase of activity in which we are concerned.

It seems to me that the Government must set the standard by devoting themselves to considering what is efficiency and how it can best be defined. If I might suggest one definition, it is that which, achieves the nation's interest best. I was glad to hear the right hon. Gentleman the Member for Aldershot (Mr, Lyttelton) using very similar terms. He said that the touchstone of the Debate would be what is in the national interest.

It is clear, however, that the machinery for bringing the Government's activities before the House in a form in which they can be readily understood, and in a form which will describe their efficiency, is at the moment lacking. There was considerable discussion of this matter in the building materials Debate. There is of course the audit of the Comptroller-General, which merely tells us whether money which has been spent has been duly authorised. It does not tell us whether it has been wisely spent, which is a matter for this House to consider on being presented by the Government with the facts. Hon. Members opposite seem unduly wedded to the idea of the commercial profit and loss account and balance sheet as indicating the results of business activity. I do not share that view. I think that the balance sheet, though a most admirable instrument, can only tell the shareholders what it is designed to tell them—the amount available for dividend. It is a product of the capitalist system, it shows what the capital is and what dividend is available for distribution. I have yet to hear of any shareholder who will come along to a company meeting and say to the chairman of the board of directors, "Are you sure that in the management of this company, and in the results which you are now disclosing, you have seen to it that your goods have been sold at the minimum price possible compatible with a reasonable return on the capital invested and the best possible conditions for the workers engaged in the business? "In fact, as we all know, the ordinary shareholder is only interested in one thing—what the dividend is.

We shall have to develop a new science of measuring efficiency which will include a variety of things. It will of course include whether the money has been duly authorised; it will include a profit and loss account and balance sheet; but it must also include all the other things which are not shown in such documents. It must include an examination of the welfare conditions, the amenities, the amount of plant, the layout, the distribution, and all the variety, of things that go into efficient management. Efficient management at the moment is decided by the board, who decide the policy, and the people who carry out their instructions. They have in their heads certain general principles on which they work. I suggest that we must develop a method of measuring to find out, in the first place, whether those principles are good and sound and in the nation's interest, and in the second place, with what success they have been applied.

The Prime Minister very wisely pointed out yesterday that there are some activities which cannot easily be measured. My point is that we should be in a position to measure those activities, and not only to measure them but to put them before the Government, who in their turn would bring them before the House in such a way that we could discuss them. I realise that it would be impudent for a Member who has been in this House such a short time to suggest any machinery whereby it could be done, but 1 am encouraged to find, in the 16th Report of the Select Committee on National Expenditure, a very similar suggestion. I will read paragraph 124: Your Committee's recommendations up to this point have been concerned mainly with arrangements in the Treasury and the Departments for ensuring the efficiency of the Civil Service. Here we are again on the question of efficiency. The experience of the last 25 years, however, suggests that such recommendations are frequently shelved, and that a continuous authoritative stimulus is required if effect, in the spirit as well as in the letter, is to be given to needed changes. In the opinion of your Committee, that stimulus can most effectively be applied by Parliament itself. In the financial sphere Parliament has the right and duty of satisfying itself that the work of the Executive has been carried out efficiently and economically. Part of this duty is performed through the Public Accounts Committee, which has the help of the Comptroller and Auditor-General in ascertaining whether the money provided by Parliament has been properly spent. Your Committee has reached the conclusion that an analogous review is needed in order to guarantee as far as may be possible that the public service is provided with efficient and economic machinery for the execution of policy approved by Parliament. In its final paragraph the Report goes on: It is, in short, your Committee's belief that the existence of a Select Committee actively interested in questions of administrative methods and organisation would provide not only a stimulus but a more co-operative understanding between the House, the Executive and the public, which should go far to maintain at the highest level the efficiency of the Government machine both in war and peace. I appreciate that that suggestion was directed towards ascertaining the efficiency of the Civil Service, but in view of the fact that the Government are going to increase greatly their industrial and trading activities, it is important that there should be a similar committee drawn from this House, which would have the services of a permanent official who might be described as an "efficiency auditor," to borrow a term which I saw in "The Times" a few days ago, to examine and report on investigations into particular industries directed towards the general question of efficiency in its fullest sense. It would submit its reports for debate by this House from time to time. We were very glad to hear from the Lord President today that opportunities will be provided for debating our economic situation, and this might well be included under that heading.

As a Socialist and as a business man, I am profoundly convinced that nationalisation leads to efficiency, and I am quite sure that the time will come when the Government will have to put the results of its nationalised undertakings before the House for them to be considered. I am satisfied that the present accounting methods, and the form in which those results are presented, will show nothing. It has been said that figures can prove anything, as indeed they can if one does not give the whole figures. If one gives the whole story, they do not prove anything but the right answer. I would therefore urge the Government to consider setting up such a committee, so that it can lay the whole story before the House and prove the value of nationalisation.

7.9 p.m.

Mr. W. J. Brown (Rugby)

This Debate has lasted for nearly two days, the hour is late, and I shall be as brief as I possibly can. I start with the assumption that whether hon. Members are advocates of a Socialist State, advocates of unrestricted capitalism, or advocates of that peculiarly English combination between Socialism and capitalism which is now being worked out, we all want the best and the most effective disposal of the available manpower of the country that is possible to us. It would be very easy indeed to attack our present dispositions in relation to manpower, and I myself in earlier Debates have quoted many of what I think are remarkable cases of the waste of manpower in Britain. But tonight I want to look very briefly at a wider canvas than that would represent. The most remarkable social phenomenon of the last two centuries has been the amazing increase in the productivity of mankind in the machine age. The machine has multiplied by hundreds and thousands man's power to produce goods. But it is almost an equally remarkable phenomenon that there has been no rise in the standard of life of the people to compare with the vast increase in the productive power of the machine. I think it could be argued that the position of the British workman today is rather worse than it was at the time of Henry VIII. If anyone doubts that let him read the opening chapters of Froude's "History of the Tudors." Froude describes conditions in the early part of the 16th century. There were many articles of consumption which were inordinately cheap. Strong beer was Id. a gallon. Wine was is a gallon. Beef was two pounds for a penny, and mutton was three pounds for a penny. And there was nearly a strike about the unduly high cost of living!

It would be common form to suppose that this vast increase in the productive power of the machine had been drained away by the cupidity of the capitalist, and I do not doubt that many examples of the cupidity of the capitalist might be cited. But I think that there has been another and vastly more important element than that at work. It is the terrific growth in the proportion of the population now employed upon unproductive work. I saw a study made sometime ago of this phenomenon in America, where a comparison was struck. I speak with reserve about the years. The actual years do not matter: it is the. point I want to bring out. This study was, I think, for the period between 1870 and 1930 in America. The thing was diagrammatically illustrated by a circle divided into segments. One segment represented agriculture, one represented industry, and the third represented "services" of one sort or another. If the circle for 1930 were compared with that of 1870 you would have found that the proportion of the population employed in agriculture had sharply declined; that the proportion of people engaged in industry had declined somewhat. But the segment represented by services had expanded out of all recognition. I have not seen a precisely similar diagram in respect of this country, but on the basis of my lifetime's experience I should hazard the statement that the same comparison was true here—in proportion, of course. Broadly, the trend has been the same—a diminishing proportion of people actually engaged in production, and an increasing proportion— (and now a tremendous proportion)—engaged in "services." That would be true here just as much as it is true of America.

One explanation of that undue growth of the proportion of the population engaged in "services" has been the operation of the profit motive. It is the fact, for example, that before the war you could get all the money you liked for dog-race tracks, cinemas, "pubs" and the like. But you found it extremely difficult to get money for heavy industry, because the profits in those industries were greater That played a great part in causing a dis-balance between productive and unproductive labour in our community.

While it is true that the play of the profit motive takes this process a certain way, it is also true that then Government action takes it still further. This is a point on which I would beg the House to reflect. It is not merely that the State takes a steadily increasing number of men for the Armed Forces, although it does that. Before the last war—I mean the first great war of 1914–18—our total Armed Forces were about 200,000. The lowest estimate I have seen of our postwar army is 1,100,000, or five times as much. The Navy, as I recollect it, numbered about 120,000 personnel before the first great war. Today it is much greater than that figure, and, probably, never will it be as low as 120,000 again. The Royal Air Force before the 1914–18 war did not exist at all, but is now an important and big item in the defensive mechanism of this country. I am not blaming the Government for this. I ask hon. Members not to construe this as an attack. It is part of the inevitability of things so to speak: But Government action adds to this disbalance.

That is not only true in relation to the Armed Forces, but also in relation to other Services. Before the great war of 1914–18 the Civil Service numbered about 200,000. It has grown during my contact with it to 750,000 today. Please do not misunderstand me. It is no part of my case that these men are not working hard. It is no part of my case that they are not doing a useful job, but it is part of my case that all this labour has to come out of the total limited reserve of manpower. And if you use it on one type of occupation you cannot use it for another. I remember that when I joined the Office of Works in 1912 the total staff was less than 200, and all of us were accommodated in one Georgian house in Birdcage Walk. The Office of Works today has a staff approaching 15,000, and it occupies 39 buildings in the London area alone. Here again, it is no part of my case that these men are not doing a thunderingly good job of work, but I am saying that the growth of the proportion of people unproductively employed, because they are carrying out Government policy, is a fact to which we have to have regard in determining our manpower position.

I want, as I have said, to be very brief. I ask what we are going to do about it? My answer is first, in all legislation we pass in this House we have to recollect that after a Bill has gone through men and women have to operate that Bill, and that the number of men and women required to operate the Bill is an item we ought to take into account in the credit and debit calculation of our legislation. Secondly, I urge that we should use the control of investment to stop the undue flow of investment into the less necessary industries, and to promote the flow of investment into the more necessary industries. I should sooner do that by control of investment at the centre, than control of operations at the circumference. it takes less labour to control things at the centre than it does to do so in detail at the circumference. We have a Bill on this matter on the way to the Statute Book and I think the Government in operating that Bill should have very careful regard to this Debate tonight. Thirdly, we have got to increase production and I agree with everything that has been said in that connection.

Whatever we are to give to the common people of this country, and whatever form it takes, it can only come out of the wealth produced in this country by the labour of hand and brain. I think, perhaps, the Labour Government are in a better position, perhaps, to emphasise that than a Conservative Government. Next, whatever Government is in power we have to increase the rewards in the productive industries by comparison with the rewards in the unproductive industries. If we do not, the drift from the essential into the unessential industries will continue. I regard it as one of the biggest paradoxes of my lifetime that the worst remunerated jobs in Britain have been those which were most essential to the community, those of the farm labourer and of the miner. To stop the drift from the mines, and from the land, when controls come off, as they ultimately must, we must pay rewards in those industries more commensurate with what men can get in other industries. Otherwise, the drift will go on. That means that the Government must have some sort of wages policy.

I heard with dismay what the Lord President of the Council said about this matter today. I thought it represented an abdication of both the functions and the powers of Government. He asked, "If we are to have a wages policy, what is it to be? "I will throw out two suggestions. The first is that they should look as far as New Zealand and Australia, and other reputable countries, which have established a decent minimum wage below which no person is employed. If that can be done in any industry, it can be done in all. I know of a firm, whose managing director is a Member of this House, which pays a minimum wage of£5 a week for every adult worker at the age of 21. In Australia and New Zealand they have a basic minimum wage, with fluctuating additions corresponding to the cost of living in the particular, State in which the worker lives. We could at least get that right.

The second suggestion is that it ordinary trade union-employer negotiation does not produce the necessary remedy for the low wage conditions of essential industries, that machinery must be supplemented by Government action, if we are to avoid the undesirable social consequences that have been mentioned.

I have not made the speech which 1 intended to make, but I beg the House to consider the three or four points I have presented. Above all, I ask the Government not to retreat into negation on the subject of wages, I ask them to direct their attention to getting a proper equation of the use of our manpower, between the productive and the non-productive industries of the country.

7.23 p.m.

Lieut.-Colonel Nigel Birch (Flint)

I hope that the hon. Member for Rugby (Mr. W. J. Brown) will forgive me for not following him in all the very interesting points that he made. I was interested in what he said about how much work is required after we have passed an Act of Parliament. He gave the only really strong case I have heard for the Trade Disputes and Trade Unions Bill, though it was a negative case, because that Bill will not require anyone to operate it.

There has been general agreement in the House throughout the Debate that the country is faced with a very serious situation. My right hon. Friend the Member for Aldershot (Mr. Lyttelton) painted the situation black while the Prime Minister and the Lord President of the Council painted it in varying shades of grey. I do not think that it is very profitable to discuss whether the position is dead black or only dirty grey. It is serious and it has to be faced. Everyone has come to the conclusion that the main thing required is increased production and a great many points have been raised about how increased production should be effected. The first point I wish to make is negative. I believe we shall not get increased production by preaching to people. It is no good telling people to face the facts, appealing to them to put their shoulders to the wheel, to leave no stone unturned, to pull up their socks. They have heard all that before. I agree with almost everything that the Prime Minister and the Lord President of the Council said, but I do not believe that their speeches will increase production by a single brass button. I believe it is true that the country is still behind the Prime Minister, but it is very far behind him.

I have a most profound faith in the people of this country. I have no doubt at all that they will do their duty, but the condition for getting people to do so is that they must be treated as adults. The way to convert an adult to a course of action is not by preaching at him but by telling him the facts, discussing them with him and making out a plan which suits the facts with which you have to deal. With great respect to the Lord President of the Council, whom I am very glad to see come in again, I do not believe that our people are being told the truth it may be that they are being told some facets of the truth, but not in a way they will find easy to understand. We got into very bad habits in the war of concealing facts and statistics. There was an example of this habit the other day when the Minister of Food, speaking in this House, said it was ridiculous that people did not know there was a serious food position because all they needed to do was to read between the lines of Lord Nathan's speech in another place in reply to the Bishop of Chichester. Then they would have known what was going on. I doubt very much whether anybody in this country has ever read the Noble Lord's speeches, so it is asking a lot to say that they ought to have been able to read between the lines.

The statistical blackout has been partially lifted and now we have "The Statistical Digest." People with knowledge of statistics and a good deal of leisure can derive information from it. Two really vital bits of information are however omitted—stocks of food and our reserves of foreign exchange. We cannot really get at the truth when those two items are left out. Then there is no real Production Index. I would point out to the Lord President of the Council that statistics are very difficult to deal with. In his speech he gave figures of production that had gone up 60 per cent., without saying the point from which the rise had started! When the White Paper dealing with housing was issued, I looked at it with curiosity to see how many permanent houses had been built in Wales. The answer was one. I am not sanguine about housing but I shall be very surprised if that figure has not been increased by much more than 60 per cent at the next return. That instance shows that you have to be careful when dealing with statistics.

The hon. and gallant Member for Lich-field (Major C. Poole), who I am sorry to see is not in his place, said that he was a lover of figures. Most people are not lovers of figures. Figures are dry and difficult to interpret. It is no good the Lord President of the Council saying, "Now we have this Green Book we really know where we are." Statistics in that form do not get across. All economists and the technical journals have estimated that the new demands on our real resources are likely over the next few years to exceed any probable increase in those resources. I will not go through all the demands—they have been mentioned many times—for example the Armed Forces, the price of coal, housing, a better standard of living and last, but not least, the immense need of capital re-equipment in our industries. Everybody knows that these things are thoroughly desirable. Hon. Members opposite sometimes talk as though we gloated because these things could not be obtained all at once: it is part of their "Malice in Wonderland" about us that we are against all progress. The fact is that we are pledged to them but we' know that we cannot get them all at once. The Lord President of the Council admitted this when he talked about the pipeline needing to fill up.

What is needed is proper targets and proper priorities. I put forward, as a lively and constructive suggestion, that statistics should be presented in a form more easily understandable by the man-in-the-street. They should be presented diagrammatically and pictorially. On the one side there should be the various demands—for the Armed Forces, for National Insurance and so on—and on the other side the resources available to meet those claims. If the claims are greater than the resources, there should be a plan by which some of the claims can be cut down. The value of that sort of method would be that it could be proved diagrammatically and pictorially that when production had gone up by a certain amount other claims could be met, and it could be shown what part of those claims could be met. I believe that if the Government presented statistics and targets in that way, they would be much more likely to get results than they will by throwing a very difficult green book at the head of the public, and saying, "Now they know all about it."

If these priorities are to be decided correctly, there must be a plan. I should feel much happier if I could really believe that the Government had any plan at the top level. What we have now is an unconditional pledge that the cost of living will stay where it is, combined with constant overdrawing on our resources; and this can only bring material ruin to us, and, I say to hon. Members opposite, political ruin to them. What we shall get is high prices, going up in an unbalanced way, and what is even more important, the capital re-equipment of our industry is likely to be starved. I have noticed that when any hon. Member on this side of the House mentions the word "planning," there is always a slight movement of surprise among hon. Members opposite. Nobody on this side believes in laissez faire. That is a Liberal doctrine. The quarrel we have with hon. Members opposite is about the level at which planning should take place. The Lord President of the Council said that we can learn a great deal from a military practice, In a humble capacity, I have done a little planning on the military side. The first thing one. has to decide, in military planning, is upon the object, upon what one is really trying to do, and the second thing, which is almost of equal importance, is to decide whose battle it is. The planning of any operation has to be done by the people who are going to fight the battle, and by nobody else. I am sure I shall carry with me all my hon. and right hon. Friends when I say that we believe it is the job of the State to plan the shape of the national income.

What is happening now is that there is no master plan at the top, but a great many plans at the bottom for fighting other people's battles for them. It is rather as if an Army commander said, I am not really clear what I am going to attack, or who is going to attack, but let us all get on and attack; I am going to send a working party to every division and tell it what it ought to do; I am pretty sure that everybody from the rank of lance-corporal upwards is really inefficient and ought to be sacked; but I am not going to sack them." I think a general situation of that sort is very difficult to sustain, and that an Army in which that kind of thing happened would not win its battles. We need a plan at the right level, a clear directive as to what is to be done, and then we should leave other people to fight their own battles. The absence of a clear plan at the top, combined with interference lower down, is not planning, but chaos.

7.35 p.m.

Mr. Mitchison (Kettering)

I suggest to the hon. and gallant Member for Flint (Lieut.-Colonel Birch) that there is one essential difference between planning in war and planning in peace. The intention of planning in war is to defeat the enemy, but in planning in peace one is not intending to defeat anybody, and the purpose is to promote the advantage of the country and the people of the country. I listened very carefully, with great respect and some amusement, to what the hon. and gallant Member said, but. I failed to appreciate the type of plan he: would wish this Government or any Government to have. That, indeed, seems to be the difficulty underlying very much of the Debate. Hon. Members on the benches opposite have time and again used words which seemed to infer that what they desire is to go back to some prewar form and structure of society, accompanied, no doubt, by what was frequently referred to, rather significantly, as the re-equipment of industry. Hon. Members opposite have expressed the desire, in a most benevolent way, that we should all turn round and go back hand-in-hand together. But that is not planning; it is not going forward. Such an attitude, surely, shows a complete failure to appreciate that, after the convulsion which has shaken the world during the last six years, we shall never go back to the form and shape of things before the war. If it is the case that we do not know exactly where we are going, that we do not know exactly what the figures will be next year or in a few years' time, I can only say that that is the sort of uncertaintly which has always been attendant upon every form of' human society, an uncertainty without which there could be no progress and none of the opportunities that are presented to us simply by the very uncertainty in which we move. One cannot expect to plan in that sense with certainty.

There are one or two things 1 think one can say as regards the reallocation of manpower and its connection with planning. Under the system of society that formerly existed, there can be no reasonable doubt, according to expert evidence, that the major industries of this country fell lamentably behind, and were, I will not say individually mismanaged, but under a system in which they could not possibly develop The result is that at present it is extremely doubtful whether either the coal industry or the textile industry has the possibilities of exporting that it might have had if it had been better managed. There are, of course, other things which affect the position, such as the shortage of coal and the difficulty of recruiting into the industry, and there are similar difficulties in the textile industry. Our other main exports have always been under the heading of vehicles, machinery, electrical goods, and so on. These have been essentially goods dependent upon individual skill originally, and afterwards upon skill in processing and in technology.

I cannot help feeling that a guiding principle that we might have in mind in considering the development of our economy, particularly in. relation to exports, is that where it is a matter of the export of goods in large masses, produced in a similar form—such as most forms of textiles—we stand a far poorer chance of competing with such countries as the United States, and countries which are just coming into the field of mass production, than we stand in those more limited industries in which our peculiar skill in invention, technology and workmanship has special scope.

If I am right in that general suggestion, then I would go one step further and say that we have heard from the benches opposite much criticism of the neglect of the Government to foster individual enterprise in some form or another. We must charge that against individual enterprise and Conservative Governments in the past, and their singular failure to promote and co-ordinate industrial research.

It has been on a private basis, highly competitive, and operating under a patent system which has had the effect of cramping and even suppressing inventions. It is one of the most remarkable failures of the Victorian system of industrialism which has continued up to now—a failure aggravated by the larger combines and the use they have made of inventions and patents.

Therefore, I would suggest that in the allocation of manpower—if there is anything in the diagnosis of export possibilities, if there is anything in the need for research on a far larger scale and with a far broader point of view than we have seen it before—the Government themselves must take some considerable responsibility for these things. They must consider their planning not merely in the allocation of manpower, and not merely as the planning or replanning of old and stable industries. They must consider it as comprising, at least in equal degree, the establishment of new industries and the practical application of inventions. They must consider the encouragement of public enterprise and inventions by recruiting a very large body of young men in the country, whether they are scientists, industrialists or public servants, who, in a mixture of these three capacities, can render the most valuable service to the country and lead us one step further at least towards the change in the structure of industry, as well as in the structure in society, that is surely inevitable in the years to come. If we try in this country to go on as the old industrial society we were before the war, I suggest that we cannot get prosperity for our people, we cannot improve our standard of living, and we cannot give them the opportunities that they now need. We cannot ensure the use, for the benefit of all, of the remarkable discoveries that science has been making in past generations and which have been so successfully applied to the plans of war and need to be applied to the plans of peace and the cause of progress.

7.45 p.m.

Mr. R. S. Hudson (Southport)

We have been listening for two days to a Debate, which I think one can say with truth, has been mainly devoted to recognising that events abroad, over which we have no control, materially affect conditions in this country. It has contributed to a realisation of the difficulties with which we find ourselves at home, and the remedies which we can, if we want, within our own power and ambit, apply to many of these difficulties. The Debate started as an analysis of the situation by my right hon. Friend the Member for Aldershot (Mr. Lyttelton) based very largely on the Monthly Digest of statistics which the Government have inaugurated. My right hon. Friend asked a considerable number of questions and offered a number of constructive suggestions. So far, following the usual practice of the Government Front Bench, more especially since the invitation addressed to us by the Lord President of the Council to put forward constructive suggestions, these questions have not been answered, and little comment has been made on the suggestions. I hope that the President of the Board of Trade, when he replies, will deal with the problems put forward by my right hon. Friend.

The other opening speech was by the Prime Minister. He made a very moving appeal to the people not only to face up to their difficulties, but also to co-operate in trying to solve them. It was followed today by a speech by the right hon Gentleman the Lord President of the Council I agree with my right hon. Friend the Member for West Bristol (Mr. Stanley) that anyone listening to those two speeches would have gained very different impressions of the state of the nation. I think that, with due moderation, the Prime Minister was endeavouring to paint not too gloomy a picture of the conditions with which we are faced. Nevertheless, he indicated the extreme seriousness of the fact that we are faced with, and have to meet, the problem of a shortage of manpower. The speech of the right hon. Gentleman the Lord President of the Council gave most of us, I think, the impression that he was trying to show the success of the Government in providing the necessary manpower. Listening to him, I failed to reconcile the figures he gave with chose which were given by the Prime Minister. We shall be very grateful if the President of the Board of Trade can tell us what is the solution. As I understood it, the reason given by the Lord President of the Council for this relatively abundant manpower compared with 1938–39, was that by the end of the year we should have practically no unemployment, whereas in 1939 we suffered from one and a quarter million unemployed.

I have taken the trouble to look up what the Prime Minister said. When he was comparing the figures of manpower in December, 1946, with those of prewar days he used the words "Men able and willing to work." Presumably, therefore, he included the unemployed in the 1938 figures. He said that in December, 1946, we should have 20,000,000, whereas in 1939 we had only 19,750,000, so that 250,000 more men would be available than there were in 1939. From that there has to be deducted an increase in the armed Forces and an increase in the number of men making munitions of a total of some 2,000,000. There is also to be taken into account a very large increase in the number of persons employed in national and local government services, which I make out to be an increase of 400,000. In addition to that, as I understood him, the right hon. Gentleman said we should have as many men engaged on civilian consumption in December 1946, as we had in the prewar period, and, in addition, the number of men engaged on making goods for export was greater than ever before in our history. The Prime Minister yesterday said the figure was 400,000. These figures do not tot up. Moreover, we are told, the Minister of Health hopes to have 1,400,000 men on house building and civil engineering, which would be well in excess of the figures for the corresponding prewar period. Where is this great excess of manpower to come from? What industries or services are the Government proposing to decrease in December 1946 to the tune of something approaching 4,000,000? I would like the President of the Board of Trade to tell us how those figures are reached?

The other point on which everyone who has taken part in this Debate is agreed is the need, having regard to the shortage of manpower, to make the maximum use, and the best possible use, of the manpower that is available, to avoid waste, and at the same time to try by such means as are available to encourage enterprise, efficiency and hard work. I think hon. Members on all sides of. the House will agree to that. In regard to the appeal that was made by the Prime Minister for hard work and more production, I have already said that we on this side recognise the necessity for joint effort as much as anybody. No one realises that better than the great body of individual British manufacturers, and it we are to get back to the prewar provision of civilian goods, with still more required for export, they will have to put forward the maximum amount of ingenuity, hard work and enterprise. That was reinforced by my right hon. Friend the Member for Alder-shot yesterday and by my right hon. Friend the Member for West Bristol (Mr. Stanley) today. Does the Prime Minister or the Lord President of the Council seriously believe that the methods they are adopting are going to achieve that end? Are both right hon. Gentlemen so devoid of imagination and so ignorant of men's natural feelings as to suppose that week after week they can spend Saturdays and Sundays abusing them, holding them up to obloquy and running them down, preserving incidentally the choicest epithets for the Lord's Day, and then in the middle of the week expect these same men to believe right hon. Gentlemen opposite, when they hail them as the saviours of their country. The Lord President of the Council today said he had every sympathy with industry.

Mr. H. Morrison

If these things have been said, it would be more to the point if the right hon. Gentleman would give us one or two specific quotations of this malicious, dreadful, personal abuse, and. who is doing it.

Mr. Hudson

The party to which the right hon. Gentleman belongs and the Press which supports them. I have no time to read them all. [An Hon. Member: "Just one."] The right hon. Gentleman said he had great good will towards industry, and he went on in another part of his speech to suggest that it was doing a disservice to this country to attack the efficiency of British industry when you are abroad. He said that, very often, what you said inside the country, did not matter so much.

Mr. Morrison

That is not what I said at all.

Mr. Hudson

It comes very badly from the right hon. Gentleman when we think of what he said in Canada only the other day. When he was in Canada he took the trouble to run down the efficiency of many of the important basic industries of this country. He said, or at least he was reported as saying, that transport was in a bad way; that the iron and steel industry was in a bad way. Then he comes and asks us to believe he is sincere when he says he has good will towards industry in this country. I think he ought to be consistent. The party opposite really ought to decide which line they are going to take. Are they going to say that they want reconciliation with industry—that they want, as the hon. Member for West Coventry (Mr. Edelman) said, to get together in co-operation in solving this difficulty; or are they going to continue to do as they have done in the past, and abuse industry and talk about its inefficiency? In the difficulty with which they find themselves confronted today and in regard to which they are making an appeal, they are reaping the whirlwind they sowed not only during the past 12 months but during the past 20 years Whether they meant it or not, the whole trend of their teaching and preaching has been that, if only the State were in control, most of our problems would disappear, and the old bogys of want and unemployment, would be no more. I picked up the other day a book, which I found too late unfortunately for use during the General Election. It is by the Under-Secretary of State for Air in the present Government. It is not an old book for it was published in 1944 and is described as a completely revised and up-to-date version. On page 64, the author says: What Socialism really means is giving nine-tenths of us a chance to get at least ten times as much individual, private, property—ten times as much clothing, houses, gardens, motor cars, supplies of food, furniture, and the like as we ever get today. There is nothing about hard work, nothing about production. Yesterday the Prime. Minister came along and reversed all that, and said the solution of our present domestic problems was hard work. [An Hon. Member: "For all of us."] Yes, and I am not afraid of it. I have had plenty of it in my lifetime. If the workers in industry have been allowed to believe that the profit motive is immoral and that they are justified, as the hon. Member for Wednesbury (Mr. S. N. Evans) said this evening, in endeavouring to work as little as possible for as much as possible, the Government have only themselves to blame. This is the natural result of Socialist propaganda.

Now as we understand it, the Government are, at last realising their mistakes and are facing the problem and I congratulate the Lord President of the Council on speaking some home truths. He said the Government must get the workers to unlearn the lessons which they themselves have taught. Let us have less nonsense in future about the wickedness of profit and more emphasis about the importance of earning profits and wages by the only way in which they can be honestly earned—by more production.

The new doctrine which the party opposite are preaching places them in this dilemma. The workers, so the argument runs, will not give of their best under present conditions unless they can be provided with more consumer goods; there will not be increased exports which are required unless consumer goods are put at the workers' disposal. On the other hand, the argument runs, we cannot tolerate any reduction in the meagre exports we are already making, otherwise we shall not be able to purchase the raw materials required for the production of home goods, let alone those for export. It is a vicious circle, and it is up to the Government to break it. We hope that the President of the Board of Trade will tell us how it is proposed to break the circle. I think he will find some difficulty in dispelling some of the illusions prevalent in his party.

I turn to another subject on which, I have noticed with some astonishment, there is a large measure of agreement among Members opposite. I am surprised that they raised it, but I think it is a very good sign. I refer to a wages policy. I notice that in a recent pamphlet issued by the Labour Party great attention is paid to the question of arriving at a wages policy. A day or two ago, I interrupted the Parliamentary Secretary to the Ministry of Agriculture to ask him about a wages policy and he said, "What is yours?" But we are not the Government. We do not have to answer that question We believe in the system of private enterprise. Under such a system, an individual trade union is free to negotiate with the employer concerned, and reach such a settlement as their respective strength allows them to reach; Under a system of private enterprise no Government wages policy is. essential. But today we are not living under a system: of private enterprise;.we are living under a Government which believes in planned economy. We are living in a time of full employment caused by a shortage of manpower, and the dangers of unregulated advances in wages—I am not trying to score a party point on this matter; it will be of supreme importance in the next few years—in individual industries or services are strikingly set out in the Labour Party pamphlet. We should like to know whether the President of the Board of Trade can throw a little more light on the subject than was shown by the Lord President of the Council.

It is significant how many speakers from the opposite side have said that they were sorry to hear the very negative reply given by the Lord President of the Council. The logical solution, which the Labour Party are going to shirk, is for the Government to say to the trade unions that during a period of manpower shortage no demands for increased wages, whether they take the form of more wages for the same hours or fewer hours for the same wages, can be put forward without Government permission. That is the logical remedy in a planned economy; we cannot get away from that. But I am not at all sure that the trade unions would agree. Did the trade unions ask Government permission before they suggested, the other day, a reduction at once to the 40 hour week? Did the miners get Government permission to ask for a reduction of their weekly hours to 35? What is the Government's position in regard to these two demands? Did the Government agree with the Parliamentary Minister to the Ministry of National Insurance who, it is reported, said only last week: The Government will give the trade unions every inducement to seek: wage in creases." The hon. Gentleman must have said that before he read his Party's pamphlet. Unless the Government offer a wages policy how will they, in a time of shortage of manpower, man up our essential industries? Do they agree that the essential of a sound wages policy especially in our present difficulties, is to relate wages to productivity? The Labour Party's pamphlet argued that wage increases, if not accompanied by increased productivity, merely lead to inflation. Do the Government agree? I hope the President of the Board of Trade will answer these questions.

The Lord President of the Council said that we needed more agricultural production, and several Members on the Labour Benches have stressed the fact that if we are to get people into the less attractive industries, they must be paid wages adequate to attract them, and commensurate with their productivity. We would agree with that, but let me take, as an instance, what was said yesterday by the hon. and gallant Member for East Wolverhampton (Captain Baird): 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."—[OFFICIAL REPORT, 27th February, 1946; Vol. 419, c. 2031] The hon. and gallant Gentleman put one part of the case very well but, like the Prime Minister and the Lord President of the Council, shied when he came to the jump. What do the Government propose to do? How do they propose to ensure that? Will the engineer remain content to see the agricultural worker's wage brought up to his, when he considers himself a skilled man, and not ask for more? What happened during the war? Every time there was an increase in agricultural workers' wages it was immediately followed by demands from other workers in rural areas for an equivalent increase, in order that the differential between their status and wage rates should remain as great as it had been before. The agricultural workers were justified in having a greater wage, because they gave greater productivity as the result of a very great deal of harder work and increased mechanisation The road men did not give any increased productivity but their wages were raised pan passu and there is still a differential between the two. If we go on that way, we get into the vicious spiral which is condemned so rightly in the Labour Party pamphlet. What we on this side would like to know is whether the Labour Party will face the problem involved. The Minister of Health has told us that when the recent increase of 4d. an hour in the wages of building trade workers was granted, he received a pledge from both sides of the industry that the extra costs would be absorbed by increased productivity, and that no increase in the selling price of houses would be needed. Have the Government any evidence that that has, in fact, been the case? Our information goes to show that the only result has been a proportionate increase in the cost of houses.

The other problem with which the Labour Party are faced, one that has been suggested by many hon. Members, is that of providing some alternative incentive to work. The mere increase of, wages does not seem today to provide an adequate incentive. Anyone who doubts this has only to look at the recent history of coal. Continual wage increases have been granted but production has steadily fallen. Could the President of the Board of Trade tell us how the Prime Minister thinks his appeal yesterday is going to affect the output of coal? The pamphlet poses a further question that was also raised by the hon. Member for Kettering (Mr. Mitchison). It is how to attract labour into basic industries like cotton. It is suggested that wages in the cotton industry will have to be increased, but surely this will be nugatory if at the same time we increase those in the engineering industries which are the chief competitors with cotton for the available labour. Do the Government intend to take up this problem? Let me repeat, so that there shall be no doubt, that it is a matter for a Socialist Government and not for us.

Relevant to this problem of the deficiency of labour and the output of labour is the Prime Minister's statement that we ought not to think about output per man hour but output per nation hour. If anyone can explain what that means we shall be very grateful. What any individual workman or factory wants to know is what is the output per week, and output per man week today, under conditions of full employment, is very much more important than output per man hour. Industry after industry is reporting today that men are giving a reasonable and, in many cases, quite a good output per man hour for four days, but are absenting themselves for the other two and thereby dislocating the factory and sky-rocketing prices and costs of production, because although their output per man hour while they are at work is good their output per man week, on which overheads and costs of production depend, is seriously lower. If the Government cannot find some remedy for that, then quite seriously we shall be faced with the state of affairs in which, under full employment, the output of 1oo men will be, in fact, less than was the output of 90 men under prewar conditions of partial employment.

Let me say a word about the appeal the Prime Minister made to the employers, who are as patriotic as any other section of the population although they have their black sheep like everybody else. The Prime Minister took credit for an increase in exports in January to a level of£57,000,000. The astonishing thing to me is not that the figure is not higher, but that it is as high as it is. Employers and manufacturers, in my view, deserve great credit for overcoming to that extent the obstacles with which they have been faced. I repeat the suggestion made by my right hon. Friend the Member for Aldershot that the Lord President might ' well be advised to stop crying "stinking fish" and bestow a little praise on these people. Nothing, in my experience, is more infuriating than being told to get on with the job when one is not given the necessary material, men, or tools. I would say to the Government, as my right hon. Friend the Member for West Bristol said earlier, that they must realise the essential difference between controls in peacetime and in wartime. In wartime, controls were definitely designed to restrict ordinary industrial production in order that all our efforts, or the greatest part of them, could be concentrated on the production of goods required for war. But now the machine has to be reversed and the controls, within the limits that we all agree are required by a shortage of raw materials or consumer goods, should be inspired by an expansionist rather than a restrictive policy. It should, I believe, be the aim both of the Minister who is responsible and, as my right hon. Friend the Member for West Bristol rightly pointed out, of all those right down the scale who are engaged in administering the controls locally, to help, not to hinder; to reduce the difficulties, not to increase them; to expedite decisions,no to delay them. In a word, they should try to be simple, flexible and helpful. If the President of the Board of Trade would only impress this on his colleagues I think industry would not be hampered in its efforts for recovery as it is today. My right hon. Friend the Member for West Bristol gave examples of the sort of frustration that men are subjected to who want to get on with the job—applying for one licence here and being told to get another one there. The examples of delay could be multiplied, not only in every town but in almost every village in this country today. The staggering thing is that we have raised our export trade to the figure we have. Let me remind the House of a sentence in the Prime Minister's speech yesterday. He said: 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 ourselves are rendering the best service we can."— [Official Report, 27th February, 1946; Vol. 419, c. 1970.] I agree fully with every word of that sentence, but there is an old saying about the mote in one own's eye. The success of the Prime Minister's appeal depends very largely on individual Members opposite. If, as a Party, they would concentrate on preaching the doctrine that the Prime Minister indicated in that sentence, to the millions of people who voted for them last time, in the belief that the millenium, if round the corner was only just round the corner, and if, as a Government, they would—as was suggested by one hon. Member of the Labour Party in the Debate yesterday—despite the excuses that the Lord President made today, concentrate for a spell on first things first, and devote all their thoughts and energies to dealing with and remedying the present situation and to finding answers to the problems put up to them from all sides of the House—not only from this Bench but in even stronger language from the Benches opposite—if they would concentrate on those tasks, then I believe that we might see the beginning of a revival of that spirit of unity and co-operation that saw this country through after Dunkirk. They could then, I believe, count on the co-operation of all sections and classes of people, and let me assure them that if they did that they could count no less on the co-operation and help of hon. Members on these Benches.

8.20 p.m.

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

I think these two days of Debate have disclosed a very large measure of common concern on both sides of the House at our economic difficulties, and a sincere desire on all sides to help in the problem of their solution. Indeed, I think, with the exception of the three speeches from the Front Bench opposite, one might well say that there has been little political partisanship in the Debate. It would, therefore, seem quite inappropriate for me to wind up this Debate with a controversial speech. I would rather try to make what constructive contribution I can by summing up and explaining to the best of my ability the major points that have been raised in the course of the Debate. I hope that in so doing I shall be able to answer many of the questions which have been put forward by right hon. and hon. Gentlemen opposite.

I start with our domestic problem because that, I think, is the one which most intimately concerns the people of this country at the moment. On the domestic side of our economy, the task with which we are faced is to refill the civil pipelines, so that there may be a plenteous flow out of them of consumer goods of all kinds for our people. But a part, and a very vital and important part of that flow, must come either directly or indirectly from overseas, and in order to obtain that we must, of course, be able to export commodities in exchange. Starting from a normal state of affairs in 1939, throughout 1940 and 1941, we continued to live far above the standard that our then current production could possibly provide, and that we did by drawing upon and exhausting all our stocks in reserve. The pipeline was emptied and we consumed all that there was in the shops and the warehouses and even the goods which were in the half-manufactured state in the factories then turning over to war production.

The exhaustion of our stocks was, of course, very ably assisted by the hundreds of millions of pounds' worth of goods, destroyed both in our homes and shops and factories by the blitz. Since 1942 we have been hanging on. as best we could, with the help of Lend-Lease and mutual aid supplies, but with a gradual lowering of supply levels ourselves. Since V.E. Day, and only since V.E. Day, we have started on the upgrade as regards our domestic supplies, and I think that people sometimes fail to realise that this process of recovery must be a slow one. Take, for instance, such a case as a cotton mill. First of all, arrangements have to be made to release the cotton mill from its wartime use, whatever it may be. Then it has to be rehabilitated, refitted with its machinery, and made ready for cotton production. Then the staff and workers have to be collected and the whole process of manufacture started up and, when once it has been started up and all that process has been gone through, it will take eight to twelve months before the first results from that mill are seen in the shops of the country. That necessarily means a delay, and we must, with this process of building up our domestic production, make a huge investment—a capital investment in stocks, an investment which has to be twice as great as our net capital investment in 1938. That is the volume for stocks alone. At the same time, of course, we have every other kind of capital investment in the form of houses, building new factories, more machinery and so on, for which in every line there is the most clamant demand.

It is in the light of these circumstances, of attempting to do an enormous task in the minimum of time, that we must review what we have, in fact, achieved. Already by the end of last year goods of all kinds were reaching the market in very substantially increased quantities. The retail sales of household goods, for instance, had increased in the last quarter of last year by nearly 50 per cent. above the corresponding quarter of 1944. Taking some individual items, the increase in utility furniture was from 0.6 million units to 1.9 million units compared to a 6 million unit production before the war. The increase in perambulators, for which some hon. Member wanted to know the figures, was as follows: Before the war the monthly production was 50,000; in January, 1945, it was 38,700; in November, 1945, it was 62,200 a month. In some cases the figures were actually well above prewar figures. Take, for instance, electric irons and fires, which went up to a monthly overage in the fourth quarter of 1945 of 115,000 electric fires and 155,000 electric irons. I give these as quite fair examples of that type of goods.

We are perhaps apt, in the presence of some particular continuing shortages, to overlook all these easements that have been achieved since the war ended. The general progress in the return of labour to civilian industries enables us to forecast a continuing improvement because, as I have said, the results in finished goods of that labour will not appear for some months to come in the shops in this country. Let me give the House some figures to show the order of magnitude of what may be termed our optimistic forecast. Here, I hope, I shall be answering the question of the right hon. Gentleman the Member for South-port (Mr. R. S. Hudson) about the figures given by the Prime Minister and the Lord President. In 1939 we had about 18,000,000 workers actually employed over the whole field of production, distribution and services. That includes commerce, the distributive services, and everything else except the Forces. Of those, 1.3 million were working for the Services on the rearmament programme— that was at the time of heavy rearmament—and 1.1 million were engaged on exports of manufactures and minerals. The remainder, 15.6 million, were, therefore, engaged upon production and all the other common services.

At the peak of our industrial mobilisation during the war, we had a total manpower of 22,250,000, or rather about 2,500,000 more than prewar. Out of that greater total, 17.5 million were in industry and all the other services I have mentioned, and 12.1 million, as against the 15.6 million prewar, were serving the home market and essential civilian supplies or civil defence or basic services, such as transport, public utilities, local government and so forth. Up to June, 1945, the total employed in industry had fallen by 16.3 millions but, as the number on munitions had also fallen, there still remained 12 million for the home market and in the basic services. Since that time 3⅓ million had come out of the Services and munitions by the end of last year, but at the same time some 600,000 had gone out of industry altogether old people, married women and so forth; while in the form of unemployed and Servicemen and women on leave and not working another 900,000 were not, in fact, employed. About half a million have gone on to the export programme, leaving 1.3 millions out of the 3⅓ million who had been added to the 12 million serving the home mark.t and basic services, and leaving us still 2.3 million short of the number so engaged in 1939. It is with that depleted number that we have to try to tackle the very much greater task that we have today than we had in 1939.

I would like at this stage to remind the House that the problems of the conversion of industry are by no means simple—

Mr. R. S. Hudson

May I interrupt? I do not even yet follow the arithmetic of the right hon. and learned Gentleman. I understood him to say just now that there are today 13,300,000 people engaged in home civilian and export work compared with 15,600,000 before the war. How does that tally with what I understood the Lord President of the Council to say, that there were already as many people in home civilian production?

Sir S. Cripps

I appreciate the difficulty, but if the right hon. Member will look at Table I of "Employment" in the Digest he will see the split up of the figure of 15 millions and that it depends on the amount in the distributive trades, commerce and finance and so forth, which differ very much as between the two periods. If one merely compares manufacturing trades, there is a difference of nearly one million in the distributive trades.

I want to deal with the problem of con version of industry and to emphasise that that is by no means a simple problem. It was difficult enough in the changeover to war purposes when there was an over riding priority for that changeover. It. is much more difficult today when re conversion is only one of a number of priorities—housing is as big, or a greater priority. In engineering, reconversion only entails the finishing off of munitions con tracts which often have to be tailed off in order to maintain the nucleus of the labour force to go on to the new manufacture. Then there is the clearing of the old stores, partly finished manufactures, the retooling, equipment and retraining of the staff and workers. If all that can be accomplished, as I have seen it done in one case in six days, a very good job will have been done by industry. A very good job is being done in industry in re conversion today.

Where there has been a closing down and a concentration of an industry, difficulties are much greater, and the recollection of a balanced labour force is indeed a major operation, bearing in mind that direction of labour is no longer either practicable or desirable. Often a factory may be held up for want of a particular type of skilled man while all the rest may be prepared and ready to go ahead. Take the case of cotton spinning again, because it is very difficult. In June, 1939, there were 139,000 operatives and by June, 1945, the number was below 114,000. Ever since then we have been trying to build up the labour force to cover the exceptional wastage of older persons who have been leaving the industry and some married women withdrawing when their husbands came home. We also had to try to increase the number of productive forces. This is not a mere question of numbers because, unless the force is balanced in all the many grades and skills, a mere numerical increase will not produce a greater result in production. During the war there has been practically no recruitment, and, therefore, no new training in skill in that industry. We have, as it were, a six years age gap in the skilled. workers of this industry. By the end of September, we had succeeded in increasing the force to between 118,000 and 119,000 persons. But conditions were such that, with all the alternatives offering in the Lancashire area, we could not persuade the people to go back into the mills. We have tried, at the request of the industry, to improve matters by getting out a better wage system, and that Mr. Justice Evershed's Committee has accomplished with skill and speed. There have been no results because the recommendations are still under consideration. It is of the greatest importance for the revival of the cotton industry that a final decision on these recommendations should be taken quickly. [An Hon. Member: "By whom?"] Taken by the industry. That is only a typical example of the sort of difficulty of readjustment that this country must overcome before a really marked increase in the supply of consumer goods can be brought about.

By the end of this year we hope that, with the greatly diminished numbers in the Forces shown in the White Paper, and in the munitions industries, we shall be able to put rather more than another half a million people on export work so as to reach a volume of exports as great as, or slightly above, that of 1938, and also that we shall have 400,000 more than in 1939 serving the home market, which should give us the chance of greater supplies there as well. This larger labour force will have a great deal to do besides producing consumer goods. The housing programme, together with all the arrears of maintenance and continuing blitz repairs, especially to industrial buildings, which have hardly been started yet, will absorb a very large body of labour. Similarly, on the machinery side, a tremendous" volume of production and adaptation is required to re-establish our civilian industries and to start, where it is possible to do so, on their modernisation. The stocking up of the pipeline will also require a great deal of labour as also will our increased export trade, so that we cannot look to a very speedy return to prewar levels of consumer goods production. It must be a gradual process.

Now let me turn to the question of exports. Our object is to secure that by the end of the year we shall have 50 per cent. more workers engaged on export, than we had in 1938. That will not be the end of what we have to do, but if we can accomplish that, it will certainly be a very satisfactory beginning. I am sure I need not explain to the House the necessity for those figures. During the war we parted with our overseas investments, and, in addition, we have incurred very large overseas indebtedness. Before the war, we had a balance of interest payments in our favour in the overseas accounts of£200 million sterling a year. That was equivalent to the work of some 800,000 men in this country, and represented the value of all the wheat, the meat, the cotton and the wool we imported into this country. Now the balance is the other way, so that, in addition to paying for all these things by exports, we must also export to pay our debts.

In 1938, about 15 per cent. of all our manufactured products were exported, and a great deal of raw material, especially in the form of coal. Now there is no coal to export, so that, to balance our accounts, and maintain our pre-war standard of living, we must in future, export, on the average. 25 per cent. of all our manufactured goods. That is a formidable task, especially as we do not want to lower our own standards of supply in order to fulfil export orders; we want it to be additional. I agree wholeheartedly with what has been said by many speakers on both sides of the House, that we want to do all we can to encourage our own people by giving them the most that we can to use and enjoy, especially by way of consumer goods. That is our objective.

Squadron - Leader Fleming (Manchester, Withington)

Will the right hon. and learned Gentleman explain how it comes about that stocks of towellings, which are deteriorating in Manchester warehouses, are still being held up by his own Department, and not even allowed out coupon free?

Sir S. Cripps

I will deal with matters of detail, if the hon. and gallant Member likes to put a Question to me. I think it is rather beside the general point.

Our policy is to encourage exports to the maximum, where they are of goods not urgently required at home, limiting by licensing the export of goods in short supply at home to a mere trickle of free exports. I say "free exports," because in many classes of commodities, we are bound to send some minimum quantity abroad, to our Dominions and Colonies, or by allocation agreements to other countries, who have no other possible source of supply. In other words, we try to put the burden of paying for our essential imports where it will least affect or hurt our own people. I am sure there is a great deal of misconception on this point. I would, therefore, like to illustrate the policy by one or two figures. If we take our exports for January, 1946, 60 per cent, of them were on goods which are not ordinarily bought or sold in shops at all, and of the remaining 40 per cent., only half were types of goods to which any form of consumer rationing has been applied in this country. That is the only way one can compendiously describe the classification.

In many cases we have, of course, set targets for industry of a percentage of production for export at which it should aim. It naturally pays us best to export high priced luxury articles if we can, goods that at the present time we cannot ourselves afford to use in our own market. I know that leads to some heartburning sometimes, when beautiful materials, for instance, are made for export, and are not for sale on the home market. We are bound to do it, because it gives us the highest conversion value, and enables us, in fact, to get more for the home market in the long run. It is the average of all those targets, which must reach that 25 percent. of our overall production of manufactured goods. In the make-up of these targets there is the greatest diversity. I will cite at random a few instances. These are targets for the first six months of 1946: Private cars, 50 per cent.; cycles and motor cycles, the same; electric cables, 30 per cent.; internal combustion engines, 65 per cent.; non-priority sports goods, 40 per cent.; photographic goods, 50 per cent., etc. None of these goods are those in vitally short supply in the sense that people cannot live without them.

If we turn to textiles, furniture, boots and shoes and similar goods, the picture is completely different. Taking cotton and wool as the two textiles most widely affecting the clothing rationing position, the situation is as follows: In the case of wool the total export proportion for piece.goods is 13 per cent., and of worsted yarn 5 per cent. Of this, 28 per cent. the yarn exports, or 1.4 per cent of total production, is free. Fifteen per cent. of piece goods, or 1.9 per cent. of total production, is also free. So the House will observe the very smallest figures are, in fact, going for free export at all. So far as cotton is concerned, the export trade is based in terms of yarn, though in fact it goes in many other forms, piece goods, netting, etc. Of the yarn 25 per cent, is for export, and so far as yarn is concerned, there is no free export at all. As regards piece goods, 16 per cent. is going for the first quarter of this year, making not more than 3 to 4 per cent. of total production of cotton goods for free exports. These very small quantities of cotton goods for free export enable us just, and only just, to hang on to our most valuable markets by a tenuous thread. Even if we were to abandon them, and so diminish most seriously our hope of future trade, it would only make the present 75 per cent. of the home market into 79 per cent. for cotton goods, and that would not all be consumer goods, because there is a large industrial use, which has to be supplied as well.

If we take boots, shoes and furniture, there is a mere minimum of boots and shoes exported—in the region" of I per cent.—and of furniture virtually nothing at all. We are at present importing furniture in order to try to ease the domestic situation. I give these figures in order that the people may understand that there is no hoard that can be drawn upon to increase these commodities for their consumption. There is only one source of improvement, that is, more production, and when that comes forward, as it will, gradually, we shall increase home consumption in step with a slight easing up on export. We have to do that, because, if we keep other countries waiting too long for our goods, we shall miss our "markets, and when we do get a surplus over home consumption, we shall not be able to dispose of it abroad, and so we shall not be able to balance our payments, or utilise our labour.

I would like to correct what may be a wrong impression I think created by some statistics giver by the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) yesterday. I think his view of the adverse balance was too gloomy. He wrote down the average monthly exports for 1946 to£43 million. I think it is wise to discount the January figure by some amount. To make such a cut I think is quite unjustified and I hope this fact will be proved by the February figures when they come out. Those, of course, are the first two months of the year with which we are dealing. I think we ought to obtain an average of nearly£65 million a month in our recorded exports over the year. Against that, we can set an average figure of£100 million a month for retained imports, so that just taking those two figures, as the right hon. Gentleman did, there should not be an adverse balance of more than£35 million a month.

Mr. Lyttelton

I was speaking only of the figures for December, January and February. Those were the only figures available.

Sir S. Cripps

I am not criticising but the right hon. Gentleman did apply them to 1946 and say that would mean a deficit of£600 million a year. No other figure would give a£420 million deficit on the amount for me year compared with the 1938 deficit of£398 million, which would not be bad for visible exports. Where the real trouble comes, of course, is that the deficit was made up in 1938 by invisible exports, and those, as we all know, have very largely disappeared today. That is the task, so far as exports are concerned, that we have to discharge—to make good the invisible exports by visible exports today.

A point has been raised about the trouble of directing labour. The right hon Member for Aldershot complained that he could not get labour in his engineering industry. I know that is quite a common complaint, but we must be careful to look at the facts of the situation. If we are to try to deliver all the orders that are on the order books of this country today, we shall certainly want a few extra millions of trained operatives. Already, the engineering industry is very much swollen over prewar figures. Before the war, leaving out the chemicals, explosives, and other industries in Group 1, there were 2,816,000. At the peak of war production there were 4,610,000, and today there are 3,280,000.We cannot expand indefinitely one particular industry and draw the workers away from every other industry in the country. We must maintain a balance, even if we have full order books. The hon. Member for Monmouth (Mr. P. Thorneycroft) suggested that we should freely import foreign labour from everywhere. I do not really think he can realise the psychological difficulty this would cause in the country, the fear of unemployment after a short boom, which was witnessed before. There is not only that psychological difficulty, but the absolute impossibility of finding quarters for hundreds of thousands of foreign labourers. imported here from abroad at the present time. It is hard enough to get quarters for German prisoners. That, I am afraid, is a suggestion which would be quite impossible.

We were asked what we were doing about these difficult industries. Well, the position is that we are having a special inquiry into those industries where difficulties of recruiting are dependent upon the conditions in the industry, to see whether something cannot be done to improve rapidly those conditions—even ventilation it may be or lack of mechanism, as in the foundries—so as to make them more attractive and therefore better able to draw labour into them.

There are two main points with which I want to deal. First, I have been asked, "How are you going to "carry out your plan?" I was delighted with the general measure of agreement in the House that it was right and proper that we should plan and, having a plan, that we should try to carry out the plan. I was asked how it can be done. That, of course, is a very critical and crucial point. No country in the world, so far as I know, has yet succeeded in carrying through a planned economy without compulsion of labour'. Our objective is to carry through a planned economy without compulsion' of labour. The general idea is that we should use a number of controls, in order to guide production into the necessary channels, according to the plan which we have formulated. The principal controls will be financial, including price control and taxation, materials control, building control, machinery and exports control, those have been in operation during the war, and certainly, as long as there are scarcities to be distributed, those, controls will serve to persuade production into the right and most useful lines. I have not time to go through the details of how each of them will operate, but those controls, we believe, will give an approximation, and it is no good doing any more today because no plan can be any more than an approximation. The statistics do not exist yet. They have to be collected in forthcoming years.

Over and above that, there is the question of persuasion of labour through employment exchanges, through giving priorities to this or that industry, which does enable us, to a certain extent, to lead labour into the places where it is most urgently required It will be seen that without any wages policy beyond that which we have always followed, the policy of using the democratic method of settlement between the trade union and the employer—assisted by wages councils in industries where that system has not operated properly—will be carried on until such time as we find it is necessary, if it becomes necessary to change it for something better. Our present policy is that it should continue.

I come to the final stage of the argument as to how we are to get the im- proved production that we so urgently need. As the hon. Member for Edgbaston (Sir P? Bennett), in what I might say was a very, remarkable and enlightening speech yesterday, told us, many of our present difficulties-—and I agree with him completely—are the inevitable sequel to the greatest war in history. They are part of the bitter price.that. we still have to.pay for the victory that we, won They Will pass as we settle down again to the economy of peace, and they will become part of the history of the past, but we must ask ourselves whether, merely by this lapse of time, we shall find ourselves at the end of all our difficulties.

A great deal, has been said on the question of the, present rate, of output per man hour, or man week or man year, however one likes to express it, and that is a matter upon. which it is extremely difficult to speak. with any certainty at all, In some factories, it is undoubtedly much down on the prewar figure. Perhaps, 6o to 70 per cent, of the prewar figure is hot an exaggerated instance in particular cases. But what is impossible to ascertain is how much of that is due to the lack of balance in the labour force, to the untrained labour that comes in, to the conditions of the change over, to the waiting time and to the hundred and one other factors which influence rates of production in the time of conversion. Undoubtedly, a large part of it is due to these causes. Civilian industry has not got back into the rhythm that it had in 1938. Nor has it such a continuous large scale character that marked war production in the later years of the war, but not in the beginning.

We must not, therefore, jump to the hasty conclusion that all, or even a large part, of this loss of man hours is necessarily due to slackness. Anyone who has had to do with the change over of production in a factory knows only too well how long it may take to settle down to the new production, especially when the working out of new piece rates is entailed in all that new production. I have often been bitterly disappointed, as Minister of Aircraft Production, when new types have been introduced, at the lack of speed with which they came forward, because the piece rates on them could not be fixed. In fact, taking such figures as are available for October and November last year, and comparing them with June and July, there is shown to be a slight tendency throughout a great many industries for a small increase in the productivity of labour, and certainly, these figures do not lend any weight to: the suggestion that there has been a falling off since the end of the war.

While, therefore, 1 agree that we want to encourage a new spirit of endeavour in industry, I believe that a great deal can still be done by smoothing the process of change over and very large. Improvements will naturally take place as we settle down to the continuity of peacetime production.Therefore, do. not let us blame ourselves or discourage others be cause we have hot-accomplished the impossible. Various hon. Members have sought to describe the existing situation in terms either of pessimism or optimism I certainly am an unrepentant optimist, subject to the one proviso that we frankly face our difficulties and take the necessary steps to overcome-them. We need not concern ourselves unduly, I think with the question of the redistribution of wealth or purchasing power within our own country: That we can debate and decide amongst ourselves, as, for instance, the amount we are prepared to redistribute under social insurance Schemes and so forth. That is" all a matter of our internal economy.

What we must guard against and guard against at all costs, is.a foreign indebtedness; that we cannot discharge-or an inability to import essential foodstuffs and commodities from abroad, without which we can.neither-live nor work. We can measure our own difficulties by the size of our adverse balance. Our present expenditure abroad, is partly, due to our overseas military: commitments, which will, we hope, decline considerably next year, below that stated in the White Paper, which only takes us to December, 1946 for the figures there given.air transitional figures which relate to the: present world conditions. We hope that that condition will improve and, with the improvement, that the need for overseas: expenditure on the Forces will fall very Considerably. Leaving out that extra factor, there is still a very large leeway to be made up which is measured by the need for exports to be increased by somewhere between 50 and 75 per cent by volume, over the prewar figure. That we have to provide by our production in addition to all our extra home needs and, we hope, the swelling volume of consumer commodities for our own people and the general maintenance of our domestic standards. And how are we to do it? Only by the most tremendous and sustained productive effort. Unless and until we make that effort, we cannot rehabilitate our country, maintain our standards and provide the necessary exports. One or other of those will have to go short, and they are all equally critical and vital.

We shall get a breathing, space if we get dollar loans from America and Canada which will enable us, for two or three years, to enjoy a better standard, provided that during those years we step up our production. How are we to step up our production? Not by working long hours, which his wholly uneconomic, or by reducing wages, which certainly does not increase production. The first thing necessary is to make full use of all the normal working hours available today. There must be no slacking by managements or employees, and no absenteeism by either. That would help, but it is not nearly enough. We shall have the advantage—and it is a very great advantage—over the prewar position that we will not tolerate unemployment. For that reason, we are spending so much on the capital works in development areas where unemployment was and is again appearing. We shall not be content until we have provided employment for all the workers in those areas. So far, we have got about half way in the planning of the necessary factory space. That would give us, if we succeed, at least a million man years; extra over prewar figures-rather more than the amount that we have lost by way of our foreign investments, which was.800,000.

Next comes the problem of. making each man hour more productive That entails: more organisation, better layout, more modern buildings and conditions of work, up-to-date methods and machinery, efficient research and development, good personnel management and all the other factors that create the best conditions in which the men and women of this country can give of then best. That is a team job, to which every one must contribute. As regards the rest of the industries, other than those like the coal industry which are being dealt with by special means, we are proceeding by the technique of working parties, or similar bodies, which can diagnose the needs and suggest the remedies. Once those are ascertained it will be up to employers, employees and the Government to see that, somehow or other, those needs are met and the necessary measures are carried through to modernise and rehabilitate our industries That will need flexibility of mind on all sides. Employers and employees must equally be prepared to share in the responsibility and to adapt themselves to the necessities of the new economic and psychological situation that has arisen.

The industries of this country are not a mass of inefficiency. I know that from my own wartime experience. Many of them have got out of date. Some were indeed out of date before the war, and many more have suffered from the sheer inability during the last six years to make those advances that have been so freely made in some other countries which have not suffered as we have In any event, we shall all agree on this, that in the task that confronts us, nothing but the highest degree of efficiency throughout all our industries will be good enough to enable us to succeed. It does need a quick and spectacular increase in production per man year, and we have to be prepared to use every means to attain it, because upon our capacity to accomplish this increase the whole future of our country depends.

While we are carrying out this work—the production that will be, necessary to improve the productivity of our industries, and this new capitalisation of British industry—we must recognise that it will not be possible at the same time to have a spectacular increase in consumer goods. If only we can be patient for a little longer, while this boosting up of our industrial production is get under way, we shall reap a really great benefit in a year or two in increased standards of supplies. I know how hard that request must seem, especially to the housewives of this country, who today are living often in grave discomfort. Nevertheless, it is vital for our future. I have been accused of every kind of harshness and austerity. It is only because of my passionate desire to see better and more suitable standards for our people at the earliest possible moment that I feel it is wrong to concentrate at the present time only upon the increased flow of consumer goods for consumption. We as a national ways react best to hard circumstances and tough times. The drive and energy of the years after Dunkirk were the reaction of the British people to great dangers and impossible difficulties. Who, in the face of that historic achievement, could feel depressed or pessimistic about our future? Let us adopt the motto of the Royal Air Force "Per Ardua ad Astra "—through hard work to prosperity. We all know what the fact is. We are up against a tremendously tough situation. But we know equally well that, once the British people realise that fact, they will respond, whatever their class and whatever their job. They will prove once again to the world that we are no effete democracy, but a vigorous, live. people determined to work our way through the difficulties of peace, as we fought our way through the difficulties of war.

I would ask every Member of this House to make it his or her duty to tell the people the facts of the situation—the facts as to which we are all agreed here tonight—and to give them that sense of urgency and high endeavour which will bring them victorious out of all their difficulties, relying upon their own skill, ingenuity and devotion which are as widespread through our country today as ever in her long history. If we in this House can approach the problem in that spirit, and give to the people that leadership and inspiration, we shall not only enhance the traditions of this great Parliament, but we shall also earn the gratitude of our constituents.

Question, "That this House doth agree with the Committee in the said Resolution," put and agreed to.