ADDITIONAL NUMBER OF LAND FORCES

HC Deb 18 February 1947 vol 433 cc1031-86

Motion made, and Question proposed, That an additional number of Land Forces, not exceeding 65,000, all ranks, be maintained for the Service of the United Kingdom at Home and Abroad, exclusive of those serving in India on the Indian Establishment, during the year ending on the 31st day of March, 1947.

6.5 p.m.

The Financial Secretary to the War Office (Mr. John Freeman)

I have to ask the Committee to vote an increased total of 65,000 in the Land Forces for the year 1946–47, together with a large increase of money for the same year. When Supplementary Estimates are presented at this time of the year, the usual custom is to present, not only the total increase which is asked for, but also any variations of expenditure between the Estimate as originally approved and the final state of the account as apparent at the end of the year. In presenting this Estimate,. we have followed that practice, and, although a very large number of Subheads are included in it, it will, I think, be agreed by the Committee that it makes the position reasonably clear as to how this money has been expended and what variations there have been between the original Estimate and the present time.

In view of the pitfalls that surround us in Debates of this kind, I think it conceivable that the Committee will not judge the present moment to be particularly appropriate to have a full Debate on these affairs. Nevertheless, it would not be right to ask for these substantial increases without giving some explanation why we want them, so I propose to draw attention to some of the more important elements of increased expenditure which appear in these Estimates.

In the first place, neither of these Estimates contains any matter which has not been brought before the Committee previously. They are required to implement decisions taken by the Government which have been considered by the House during the course of the past 10 months. In a certain sense, they might be considered analogous to the Money Resolutions which we consider after the Second Reading of a Bill. The biggest single item of major expenditure is £37 million for the, war gratuities and postwar credits of Servicemen and women who are still serving.

The Temporary Chairman (Colonel Ropner)

We are discussing Vote A, and that point does not arise on this Vote.

Mr. Freeman

With respect, Colonel Ropner,. I thought I might be able to take both Votes together.

The Temporary Chairman

No. The Committee must take Vote A separately.

Mr. Freeman

I beg the Committee's pardon, and I will deal with Vote A separately. I drew the attention of the Committee to the explanation which is, in fact, printed with the Estimate. It is simply that Vote A allows the military authorities to retain a maximum number of men on any given day in the course of the year, and it follows that, at the time of the run-down period, that maximum will probably be reached.

On this particular occasion, owing to the slight postponement of the withdrawal of certain Indian troops from stations outside India in the early days of April last year, the strength of the Army borne on Vote A was 65,000 higher than we had estimated. That excess disappeared automatically within the course of a few days, and this Vote has nothing whatever to do with any slow-down or acceleration in the release quota. It is concerned merely with expenditure in the first days of the financial year. With that explanation, I trust that the Committee will agree to the Motion.

Brigadier Low (Blackpool, North)

I would like to go into this question a little more closely. If the Committee will turn to the statement made by the Secretary of State when he moved the Estimate on 14th March last, it will see that, in actual fact, the excess over his Estimate, into which he went in some detail, is not £65,000, but £107,000, so that really the Secretary of State and those working with him underestimated to the extent of £107,000. My second point is that I would like the Financial Secretary to tell the Committee in what stations these Indian troops were kept at that time, because that information might help us at a later stage of the discussion this afternoon.

Mr. Hopkin Morris (Carmarthen)

I should like to ask the Financial Secretary whether any part of the sum now asked for in the Supplementary Estimate is to be devoted to the reorganisation of the Army, and, if so, whether we 'may discuss some of the problems of that reorganisation on this Vote?

The Temporary Chairman

A question of that sort will have to be discussed on the Vote which follows this one.

Mr. J. Freeman

I frankly confess that I am not quite clear about the first point raised by the hon. and gallant Member for North Blackpool (Brigadier Low). I have not the reference to the OFFICIAL REPORT which he is carrying with him, and I am sure that he will hardly expect me to read it now at short notice while I am replying to his point. Whether there is any disagreement about our figures or not—and I am certain that we can resolve the matter without any real disagreement—the fact remains that this margin of excess is largely accounted for by these Indian troops. A year ago they were, of course, serving in a good many parts of the world outside India; they were serving in many parts of South-East Asia and, to the best of my knowledge and belief, they were also serving at that time in the Middle East and in Italy. The number involved is not large. as the hon. and gallant Gentleman will realise. During the course of the year, they were largely moved out of these areas. We had estimated for a certain number to be left there. In the first week of the financial year there were nearly 65,000 more than we had anticipated. That is the simple and frank explanation of this Vote.

Resolved: That an additional number of Land Forces, not exceeding 65,000 all ranks, be maintained for the Service of the United Kingdom at Home and Abroad, exclusive of those serving in India on the Indian Estab lishment, during the year ending on the 31st day of March, 1947.

Motion made, and Question proposed, That a Supplementary sum, not exceeding £50,000,000 be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1947, for expenditure beyond the sum already provided in the grants for Army Services for the year.

SCHEDULE
	Sums not exceeding
	Supply Grants	Appropriations in Aid
Vote	£	£
1. Pay, &c. of the Army	113,570,000	*— 47,648,000
2. Reserve Forces, Territorial Army, Cadet Forces, &c.	Cr 255,000	—
3. Medical Services	Cr 62,000	*— 230,000
5. Quartering and Movements	Cr23,558,000	1,442,000
6. Supplies	Cr27,977,000	*— 5,669,000
7. Clothing	Cr 910,000	70,000
8. General Stores	Cr 5,116,000	375,000
9. Warlike Stores	Cr. 2,100,000	*— 150,000
10. Works Building and Lands	Cr 3,865,000	1,815,000
11. Miscellaneous Effective Services	Cr21,502,000	762,000
13. Half-Pay, Retired pay and other Non-effective Charges for Warrant Officers, Non-commissioned Officers, Men and others	200,000	—
15. Civil Superannuation, Compensation and Gratuities	75,000	—
Balances Irrecoverable and Claim Abandoned	20,000,000	—
Total, Army (Supplementary) 1946–47 £	50,000,000	*—49,233,000
*Deficit

6.15 p.m.

Mr. J. Freeman

I can now resume the remarks which, in my innocence, Colonel Ropner, I hoped that you would allow me to make on Vote A. The point that I am anxious to put to the Committee by way of opening is that, although this is, on paper, a very substantial sum, and although the Committee will probably desire some explanation, a part of the large sum involved is a matter of accountancy. We have introduced nothing new here. This is money required to implement Government decisions already taken and already notified to the House. The largest single item in this extra expenditure—

Mr. Stephen (Glasgow, Camlachie)

When referring to Government decisions already taken and notified to the House, does the Financial Secretary to the War Office wish to intimate that this money is for something included in the Estimate last year?

Mr. Freeman

I do not wish to treat the hon. Member abruptly, but, if he would read the Estimate, which is set out extremely fully, he would find the answer to his own question contained in it. I hope slightly to amplify the figures in that Estimate on one or two items. The largest single element of extra expenditure in this Supplementary Estimate is £37 million which has been paid out in war gratuities and postwar credits to Service men and women who are still serving. The Committee will remember that no postwar credit or war gratuity could be earned by members of the Army after the summer of 1946. In the normal way, these benefits have been paid on demobilisation, but, in the case of men and women serving after 31st October, 1946, the Government decided to pay them those postwar credits and the war gratuities into a Post Office Savings Bank account straightaway in order that they might begin to accrue interest at a. date earlier than they would otherwise have done. The total cost of that amounts to £37 million.

In one sense, this is an increase of expenditure, but I suggest that the Committee can legitimately regard it as a matter of accountancy, in that we have brought forward in this financial year what we should have had to pay in the next or subsequent financial years. I am certain that the fact that we have taken this step will meet the general approval of hon. Members on both sides of the Committee. The fact that the Army has not been able to run down quite as far or as fast as we had hoped during the current financial year—

Earl Winterton (Horsham)

When the hon. Gentleman mentions the figure of £37 million, does he mean that that figure represents an addition of sums under the different headings?

Mr. Freeman

Yes, Sir. For the noble Lord's information, what I am trying to do is to give a little extra information about some of these figures. The figure of £37 million is, of course, an extraction from several of the subheads in Vote I. As far as we can extract the cost of the slightly lower rate of release than had been hoped, for, I can tell the Committee that it is in the neighbourhood of £17 million. The Committee is very well aware of the considerations which have led us to take this course, and I can only say that we are seeking to economise in manpower wherever possible. The Committee will, of course, have noted the announcement made last week that we have found it possible, during the course of the next five months, to release an extra 50,000 over what we had originally anticipated.

I should also like to draw attention to one further substantial sum contained in this Supplementary Estimate. It is the sum of £14 million which, once again, if hon. Members are studying the Estimate in detail, is an extraction from several Subheads. That figure is for the Polish Resettlement Corps.

Mr. Sydney Silverman (Nelson and Colne)

My hon. Friend referred to the Polish Resettlement Corps. I take it that what he really means is Vote 11, Subhead C, £13,300,000. The Polish Resettlement Corps does not exist yet.

Mr. Freeman

If my hon. Friend will allow me to continue my argument, I think I shall be able to satisfy him on that point. What I was about to explain to the Committee is that the announcement of the Government's intention to form the Polish Resettlement Corps was not made until 22nd May, 1946; that is to say, after these Estimates were prepared. At the time we made our main Estimates for the year 1946–47 we contemplated having on our charge a certain number of Polish Land Forces who would come off our charge at a very early date. During the course of the financial year the decision was taken by the Government, which has been approved by Parliament, that the Polish Resettlement Corps should be formed. As a result, we have had during the current financial year, first of all, a considerable extra element of charge in payment for such members of the Polish Armed Forces as have not yet joined the Polish Resettlement Corps but who have been maintained at the expense of this country for a longer period than was expected. We have also had, and shall incur within the next two months, expenses in connection with the formation of the Resettlement Corps itself. It would be quite impossible, judging from our experiences on the last Estimate which we discussed, to go through this Estimate point by point and answer all the questions which hon. Members oh both sides of the Committee will ask, and unless I go through the Estimate literally Vote by Vote, there will be Members who are ingenious enough to put perfectly fail questions on matters which have not been covered. Since, in the short time I have been in the House, I have been taught that one of the cardinal virtues in moving a Supplementary Estimate is brevity, and since I have beside me my right hon. Friend the Secretary of State for War who is prepared to be "shot at" and answer questions which may be put by hon. Members, I think I had better leave the matter at that, having touched on some of the salient points, and invite the Committee to take these Estimates as they think fit.

Before concluding, I will draw the attention of the Committee to one point of substantial importance, and that is, as will be observed by hon. Members who have studied the Estimates, that the excesses and savings come very near to balancing one another. I realise that I have to walk the tight rope with great delicacy at this point, but I hope, without going into details, that you will allow me, Colonel Ropner, to point out in passing that had it not been for a failure of appropriations in aid, it would not have been necessary to ask the Committee to grant this Supplementary Estimate.

Mr. Grimston (Westbury)

I have one or two small points to raise first of all in connection with this Supplementary Estimate before passing on to one very major item which the Financial Secretary has not mentioned at all, and to which I think the Committee's attention ought to be directed. I would like to pass rapidly over the small points that I have to raise The first point is this. Of course, we have no quarrel with the decision to pay postwar credits and gratuities to those who will not be demobilised during the current year. It will, no doubt, help the showings of the savings movement which, from the point of view of the Chancellor of the Exchequer, will be a good thing. But there is one point of detail about which I want to inquire. I presume these figures do not include the demobilisation leave pay and allowances?

The Secretary of State for War (Mr. Bellenger)

Demobilisation leave is only paid for when the men take it.

Mr. Grimston

That is the point I wanted cleared up. I am obliged to the right hon. Gentleman. The other small point I wanted to raise at this stage relates to an item on page 5, under Vote 5— "Railway stores, &c." I see that the amount asked for is nearly £750,000 more than the original Estimate. With the slowing down of movements and so on which have taken place, I find that figure somewhat strange, and I would like some explanation about it. There is also a very small item on page 9, concerning compassionate gratuities. I would rather like an instance of what those are. I see the figure has gone up from £45,000 to £120,000—an increase of £75,000.

I now wish to turn to a very large item in these Estimates which has not been mentioned at all by the Financial Secretary. If hon. Members will look at the bottom item on page 9, they will see "Balances irrecoverable and claims abandoned". The amount is £20 million. That is a very large sum of money. In fact, it amounts to the whole of the Supplementary Navy Esimate. On page 11 there is a paragraph which reads: In addition to the increased expenditure brought about by the above changes, it is necessary to make provision for substantial losses incurred on accumulation of surplus marks and schillings in Germany and Austria. On 20th May, 1946, the Secretary of State for War informed the House of Commons of these loses and announced the introduction of the British Armed Forces special vouchers scheme. It is very surprising when one refers to this statement which was made to the House, as I will do in a moment, to find that losses to the tune of ₣20 million had been incurred. I do not want to detain the Committee very long, but I must direct their attention to the information which was given to the House by the Secretary of State for War on 20th May, which is referred to in the statement which I have just read. This information, through no fault of the Secretary of State's, I am sure, took the form of an answer to a Written Question. The Written Question was this: To ask the Secretary of State for War whether he has any statement to make with regard to the currency in which troops of B.A.O.R. draw their pay. I do not propose to read the whole of the answer, and when I interpolate I will tell the Committee. The answer was: Yes, Sir. Hitherto it has been the practice to pay the troops in B.A.O.R. in the currency of the country in which they are serving. Owing to the scarcity on the Continent of goods generally, and particularly of cigarettes, it has been possible for troops to make large profits in local currency by selling canteen goods to civilians at inflated prices, and to use the proceeds for further canteen purchases, etc. Consequently, the amount of local currency received back by Paymasters from canteens and Army post offices and exchanged by them for sterling or other currency has been more than that issued as pay. Despite the limits imposed on the amount of exchanges for individuals, which have been some check on these practices, Paymasters have accumulated very considerable balances of German marks, which will be a direct loss to the Exchequer. Here I interpolate to say that I understand the sort of thing that happens is this—and please let it be understood that nothing I am going to say must be taken as blaming the troops in any way. It is a perfectly natural thing for a man to have done in the circumstances, if the temptation was placed in his way. The troops can go to a canteen and purchase cigarettes for x marks. They can then go outside to the German civilian population and sell those cigarettes for two, three or four times the amount paid for the cigarettes. They can then go back to the canteen and purchase more cigarettes, or they can go to an Army post office and invest the difference in Savings Certificates, or at the Post Office Savings Bank. That is how these losses have occurred. Now I will return to the statement of the Secretary of State for War. He said: I am arranging for the introduction of special vouchers denominated in sterling which alone will be accepted for purchases in canteens, Army post offices, officers' shops and other official organisations. Now I will miss out a certain amount of the statement. He went on to say later: The task of printing and distributing the vouchers is considerable and at least two months will elapse before the arrangements can be implemented. I have, however, thought it proper to inform the House of my plans and at the same time to give the troops this provisional notice of the change."—[OFFICIAL REPORT, 20th May, 1946; Vol. 423, c. 33.] 6.30 p.m.

Two things occur to me there. Was the extent to which these losses were amounting realised at the time? Because if so, it seems to me extraordinary that no other steps were taken than to produce a voucher scheme which would take two months to bring into operation, and at the same time give everybody a naive warning that they had better make hay while the sun shone. I think anybody reading this written answer at the time would never have dreamt that a loss between 5th April in the current year and about 20th May would run to the tune of £20 million—or rather two months after when the vouchers came into operation. Prima facie—though I should like to hear some more about this from the Secretary of State—it seems to me this is another instance of the feckless administration and complete inability to grasp the size of a problem for which the Government are becoming renowned. To allow this sort of thing to go on to the tune of £20 million is, I think, most reprehensible and the Government ought to be severely criticised for it.

What I want to know beyond that is: Is the Secretary of State now satisfied that the voucher scheme he has introduced has, in fact, put a stop to this practice, or are losses still running on account of this particular item? Before we finish with this Vote I hope the Secretary of State will give us some more information, particularly on those points, and. whether as soon as this was found out steps were taken before the present scheme could be brought in to try to put a stop to it. Otherwise, it is a case where the situation has got hopelessly out of hand through negligence on the part of the Government. That was the main point which I wished to bring before the Committee on this matter, and I think note should be taken of it. There are many other points which my hon. Friends will wish to raise, and, therefore, I do not wish to say any more, except to repeat that we really must have some more information from the Secretary of State about this enormous loss of £20 million which is falling on the British taxpayer.

Mr. Hopkin Morris

I take it I am now in Order in dealing with the matter of reorganisation, which comes under this Vote? I would like to have an assurance from the Secretary of State with regard to the reorganisation of the regiments in Wales itself. There are three regiments, the Royal Welsh Fusiliers, the Welch Regiment and the South Wales Borderers. They are old regiments associated with Wales, of which Wales is proud. It is very important, and a matter of national concern to us, that these regiments should be kept together. But if my information is correct—I should like to have some information from the Secretary of State about this—it is now intended under the system of reorganisation—

The Temporary Chairman

I think the hon. and learned Member's remarks are more appropriate to the main Estimate. His remarks are out of Order at the moment.

Mr. Hopkin Morris

If there is to be an opportunity of dealing with this subject on the main Estimate, I accept your Ruling, Colonel Ropner.

Colonel Wigg (Dudley)

I wish to detain the Committee for a few minutes on the increase on Vote 14 B, which the Committee is asked to pass tonight. If hon. Members will turn to the explanatory note on page 10, in paragraph (e) they will find it stated that as the scheme of re-assessment of retired pay and pensions was only announced in April, it had not been taken fully into account when the main Estimates were prepared. When the Secretary of State for War announced the new scheme he said it applied to officers and men who were in receipt of retired pay or pension before the war and who had either volunteered or been recalled for the period of the emergency. In his statement the Secretary of State said: The retired pay or pension re-assessed as above in respect of war service will be regarded as a new code pension."—[OFFICIAL REPORT, 15th April, 1946; Vol. 421, c. 388.1 The original White Paper on Postwar Code of Pay Allowances, Retired Pay and Service Gratuities was published, and stated in paragraph 40 that: There is a difference between the Service at present in regard to the liability of Service pensioners to be recalled for service in time of emergency It is proposed that as part of the new scheme a liability to recall for service in emergency should apply to pensioners of all three Services. Paragraph 52 of the White Paper makes a definite promise to reassess the pensions of those n.c.o.s who were in receipt of pension before the war, and who served during the war.

Now I wish to relate my personal case as an n.c.o. pensioner to what I have already said. It is usual for an hon. Member to declare an interest in the Committee, and I am declaring mine. I was an n.c.o. who went to pension before the war, and returned to the Service of my own volition, and served for six years as an officer. In these circumstances my pension was due for re-assessment. I mention in passing, that such is the administration of the War Office in handling pensions that although I have left the Army for well nigh a year I have not yet received a penny. But that is by the way. I also tell the Secretary of State that, in view of the conditions which he intends to attach to my pension I do not propose to take my pension, and I think there must be a great number of ex-officers who will take the same line.

On 28th November last I received a communication from the Secretary of State for War writing, not from the War Office but from an accommodation address, namely, the Royal Hospital, Chelsea. This is a communication which tells me—and in case anybody thinks I am very rich, let me say it would shock the Committee if I told them how much is involved—that if I am to get an increase of a few shillings a week, as a result of volunteering and serving six years' commissioned service, I must sign the following undertaking: You are asked to state below whether you accept the old pension rate without liability to recall, or the new pension rate with a prospect of liability to recall. I was asked to sign a declaration in the following terms, and to address it, not to the Secretary of State for War but the Secretary of the Royal Hospital, Chelsea: I have read your letter offering me an option between pension at the old and the new code rates for service and rank. I understand the choice which has to be made, and that if I choose the new code rate I am liable to recall to full-time military service in emergency. Well, I may have earned the title of "old soldier," but I was not wearing that one without a few further inquiries. So I wrote again, having an idea by this time what was happening, and said: I shall he grateful if you will define more closely the phrase in Form 555 reading 'carry the liability to recall to full-time military service in emergency.' If I accept the liability to recall in what rank and in what Corps am I liable to be recalled? I remembered that there was still an emergency, and if I were not careful I might find myself serving as a private in the Pioneer Corps. I was not in the least anxious to take on such a liability for the sake of a few shillings a week.

There was a long delay, and then the Secretary of the Royal Hospital wrote and said: I am directed by the Lords and others, Commissioners of this Hospital to inform you that the question of ' liability to recall to full-time military service in emergency ' does not come within the jurisdiction of this office, but should be referred to the War Office. So to the War Office I go. Perhaps I ought not to have been surprised, but, eventually, I got a reply—an astounding fact. It said: I am afraid I am not yet able to give you an answer on this point, as the conditions of recall to full-time service of pensioners who accept pensions under the new code are still under consideration. Now, this may all sound rather funny; but I think there is not so much fun in it, because there is no section of the community more loyal, more patriotic, than the regular warrant officer or n.c.o.s, and I say it is an insult to these men to slip a quick trick across and get some to undertake writing an obligation for which there is no legal sanction. Particularly when one remembers that the men who are affected by this are, every single one of them, men who volunteered without any question during the war.

I am not going to blame the Secretary of State himself for this, because that would be unfair, and it would be assuming he knows what is going on in his Department. Nothing could be further from the truth. The facts are that the War Office is up to its old game: "We are now at peace; we are back to real soldiering at last; and we are going headlong back, to 1815 or 1066 or to some other date in the past." Then along comes another war and jerks them up again. This is not good enough, and I am asking the Secretary of State to withdraw and repudiate this document—which means nothing—and to repudiate the insult which he has put upon the shoulders of a patriotic and trustworthy body of men.

Mr. Martin Lindsay (Solihull)

I wish to support as strongly as I can the plea just put forward by the hon. and gallant Gentleman the Member for Dudley (Colonel Wigg). I do not wish to repeat all the facts he has mentioned, but this is clearly a case which should be looked into. Where the War Office would have been in the last war had it not been for the long-term n.c.o.s and warrant officers who came back, we all know quite well. They came back, and did good service; and only after a good deal of pressure from all parts of the House of Commons, was it finally agreed that their pensions should be reconsidered and raised. It is scandalous that this increase of pension should be given only if they sign this pledge to return to an unspecified rank in an unspecified corps. What they should do in the future, in another emergency, has nothing whatever to do with the service they gave in the past, for which these pensions should be paid

6.45 P.m.

Mr. S. Silverman

I want to deal with one substantial point, but before I come to it I should like to say a word about the point raised by the hon. Member for Westbury (Mr. Grimston). Twenty million pounds is a lot of money, and if that really has been the cost to the taxpayers of this country of a black market operated by our Forces in Germany, largely at the expense of the people of that country, then. I think, we should have an explanation, and an assurance that it is to come to an end now. But we should also like to know what is the extent of our liability under it, because I observe that in the Explanation. on page 11, £20 million is said to be only part of the cost. The last sentence says: The Supplementary Estimate provides £20,000,000 to cover such of the losses as were incurred during the current year prior to the introduction of the special vouchers scheme. It appears to me that the £20 million is not, the whole of the sum which we are called upon to pay in order to subsidise and support this black market; £20 million is what it cost us in the current year, and I think we should like to know what has been the total cost I am not suggesting that there is anything we can do about it. All we can do about it now, is to pay up; but, at least, we are entitled to know how far it has gone, and I hope the Secretary of State will be able to tell us.

The point I want to deal with is the item under Vote 11 C, and that is the pay, allowances and certain other expenditure of the Polish Land Forces. I see that the original Estimate was for £13,300,000, that the revised Estimate is for £20,927,000, and that the increase of the revised Estimate over the original Estimate is £7,627,000—not far short of an excess of 6o per cent. I gathered from the Financial Secretary to the War Office that the explanation is a simple matter of dates, and does not involve any question of policy, or, at any rate, not any question of new policy. What he was saying was that the original Estimate of £13,300,000 was on the assumption that the cost of these Forces to the British Treasury would come to an end on a certain date, but that, in fact, it continued beyond that date, and that it is this extra £7,000,000 or £8,000,000.

I am not so sure. I am not sure that every penny of this increased expenditure has not been illegally incurred. What I should like to know is, on what authority of this House, any money whatever has been spent on the maintenance of the Polish Land Forces, on and after the date on which we recognised the present Government of Poland. I am suggesting that there has been no authority at all. This House agreed, and rightly agreed in the first place, in 1940 to the Allied Forces Act; and, having agreed to the Allied Forces Act, it incurred an obligation, which nobody regrets or repents, to pay for those Allied Forces on our soil and on common battle fields and under our authority. But that was on the basis that they were legitimate—

Mr. Boyd-Carpenter (Kingston-upon-Thames)

On a point of Order. On these Estimates is it in Order for the hon. Member to go back into past history on the subject of the Polish Forces, and to raise difficult and, in my submission, irrelevant questions of international law?

The Temporary Chairman

I do not think the hon. Member has been out of Order yet.

Mr. S. Silverman

I have the utmost respect, and, indeed, some affection for the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) who raised the point of Order, and I hope he will not think it disrespectful if I venture to remind him that it is in the strict examination of expenditure on Supplementary Estimates that the House retains its control over the public purse.

Mr. Boyd-Carpenter

I entirely endorse that sentiment, but the hon. Member himself will appreciate that that duty is the more effectively discharged if it is discharged at the proper time.

Mr. S. Silverman

I do not think I need dissent from that view, but I should have thought that the proper time to express the view of this Committee, that £8,000,000 of money has been spent by the Treasury without any authority from the House, is the precise moment at which His Majesty's Government come to the Committee and ask for sanction for that expenditure, which is what they are now doing. Having said that, let me go back to my argument. I was saying that in order to distinguish between the rightness of the one and the wrongness of the other, it is necessary for the Committee to appreciate how this expenditure arose, and whether its continuance is authorised or not authorised. What the House agreed to in the main Estimates was to maintain the armed forces of a recognised ally. We said on that occasion that the fact that the Polish Government had been overrun and disrupted, whether it was from the East or West,—and that was what we were considering in 1940—and were unable to apply their own laws on their own soil for their own citizens. should not be used by us to deprive them of this authority, and that we would pay them what was necessary to enable them to do so, subject to certain safeguards and rights of repayment when the time came. The authority of the Government to pay moneys out of the Treasury de pended on that; it depended on it being an amount to maintain the armed forces, of a State which we recognised, with which, we were in diplomatic contact and which was an Ally.

So far as the Polish Land Forces are concerned, they ceased to exist on the date when we recognised the present Government of Poland and ceased to recognise what used to be called the "London Government." I want to know by what authority we have spent any moneys since that date in maintaining the Polish Land Forces. The Allied Forces Act no longer applies, and if this has not been done under that authority, under what authority has it been done, and what are we paving for, and what are we getting for our money? This cannot be a nebulous matter. We must decide what is the legal standing of this organisation, and what authority there is to pay money to it. It is no longer an Allied force, and if it is not an Allied force, then it must be somebody's private army. Whose private army is it, and when did the Government get authority to pay people' to maintain a private army? If I raise a private army, will the Government pay me? [Laughter.] Why not? General Anders is not even a British subject, and he is no more entitled to maintain an army at the British taxpayer's expense than Sir Oswald Mosley would be entitled to maintain a private army. This is a serious matter I am not saying that we should not recognise our obligations to maintain people who are recognised to be refugees, or that they should be compelled to go back to their countries if they think themselves to be in danger.

The Temporary Chairman

I think that the hon. Member is now a little wide of the subject. It would not be in Order to discuss the general question of maintaining Polish forces in this country.

Mr. Silverman

I would not venture to dissent from that Ruling. I recognise that that would be completely out of Order on this occasion. I thought I might be entitled to say as much as I have said, and no more, in order to protect myself against any assumption that I was seeking in some way to disown a proper obligation we have undertaken. What I am saying is that there is no authority to pay one single penny towards the maintenance of a disciplined force subject to no national law and on British soil, which is nothing less than a private army. If the Government want authority for that, they must come down to the House and ask for it. I say that they have not the authority to do it, and that every penny has been illegally spent.

Earl Winterton

I desire to raise a point of Order in connection with the Explanatory Memoranda to these Supplementary Estimates. I believe it has been ruled by your predecessor in the Chair, Colonel Ropner, that we cannot discuss appropriations in aid on a Supplementary Estimate. I have never seen before such a number of paragraphs devoted to explaining appropriations in aid, and we are now in the extraordinary position that while we can discuss those things in the Explanatory Memoranda which are in Order, we are, owing to the Ruling, precluded from asking a question on any of the last four paragraphs on page 11. I suggest it is most extraordinary that this printed document is before the Committee and we can discuss only a portion of it. In the circumstances, cannot we have a relaxation of the Ruling on the subject of the last paragraphs of the Explanatory Memorandum on page 11?

The Temporary Chairman

I think not. The paragraphs are given by way of explanation, and previous Rulings debar the Committee from following the course the right hon. Gentleman suggests.

Earl Winterton

I am glad it should be on record that although this is a Government document which is before the House, we are not allowed to discuss it.

Mr. John Freeman

Government Departments have the choice to publish or not publish statements, in full, but whatever they do, it does not affect the Rules of Order. It seemed to us to be fitting on this occasion to give the fullest possible explanation for the convenience of the Committee, but that does not affect the noble Lord's rights, or what he can or cannot discuss in the Debate.

Brigadier Low

Is it not possible to distinguish between appropriations in aid where there is a deficiency, and appropriations in aid where there is a surplus over the original Estimate? I notice that Erskine May states that appropriations in aid.— cannot be reduced in Committee of Supply, nor can the policy of such appropriations in aid, or the services on which savings have been made, if they are due to savings, be discussed. In actual fact, the deficiency in appropriations in aid, as shown in this document, results in a considerable charge upon the taxpayer.

The Temporary Chairman

No.

7.0 p.m.

Mr. Stephen

Is it not a Rule that when there is additional expenditure in a Supplementary Estimate the purpose to which that expenditure is to be put can be discussed? That is a point I tried to make when the Financial Secretary was making his speech, but he did not seem to understand me. I take it that we can discuss the additional expenditure which is being asked for in the Supplementary Estimate, but not main policy, which is covered by the appropriation in aid.

The Temporary Chairman

I think that is correct, but it is hardly relevant to the point which was put to me.

Earl Winterton

The Explanation to the Supplementary Estimate says: Provision was made in Estimates for the recovery of £9,500,000 from the proceeds of Japanese exports. … It is now unlikely that Army funds will receive receipts on account of this during the current year. Is it not ridiculous that we cannot ask the meaning of that last sentence?

The Temporary Chairman

It would certainly be out of Order to discuss that matter.

Major Legge-Bourke (Isle of Ely)

Surely, there is a difference between a saving and an appropriation in aid which does not exist? In this case, the Explanation to the Supplementary Estimate says that Japanese exports have not materialised, so there can be no question of saving.

The Temporary Chairman

A discussion on that matter would he out of Order.

Earl Winterton

Then do I understand from your Ruling, Colonel Ropner, that although there is an increased burden on the taxpayer it is not possible to ask why that increased burden has been incurred?

The Temporary Chairman

Not on this Supplementary Estimate.

General Sir George Jeffreys (Petersfield)

I would like, first of all, to raise a point in connection with Vote 1, Subhead H, which deals with pay and certain other cash emoluments of the Auxiliary Territorial Service. The Estimate shows an increase from £3,523,000 to £5,229,000, and I would like to ask the reason for that increase now that the war is over. It was always understood that there would be a considerable reduction following the eight years' excellent service which that Service rendered during the war. Now I come to Vote 2, Subhead B, which deals with grants to County Territorial Army Associations. Here, there is an increase of £125,000, and, again, I ask what is the cause of that increase? Since the Home Guard was wound up, and the Territorial Army had not been reconstituted, the duties of the T.A. Associations have been confined to the maintenance of property and so forth, and there has been no cause for extra expenditure.

I would now like to mention Vote 10, subhead G, which deals with the hire of buildings. One rather hoped that when buildings had been derequisitioned to a considerable extent there would be a decrease, but there is an increase of £1 million. I am sure the Secretary of State will be aware that, unfortunately, a great deal of damage has been done to requisitioned buildings by troops. Whether that £1 million includes any compensation, or money for repairs, I do not know.

Now I would like to come to Vote 11, Subheads C and CC, which deal with the pay and allowances of the Polish Troops and of the Polish Resettlement Corps. As the hon. Member for Nelson and Colne (Mr. S. Silverman) said, there is a considerable increase in the expenditure on Polish Forces, and there is an entirely new Vote this year for £4,447,000 for this Corps. That is a considerable sum, and it follows on the very large sums which were spent by this country on the Polish Forces during the war. I do not say for one moment that we did not have full value, while the war lasted, for the money we spent. I know those Polish Forces gave devoted service in many cases but, nevertheless, the expenditure was large, and those Forces are not only being maintained now, but have been maintained for a number of years, at the expense of British taxpayers. As the hon. Member for Nelson and Colne also said, they are no longer Allied Forces and I suggest that we should constitute them as British Forces. There could then be no mistake about expenditure in that case. I suggest, as I have suggested before, that we should form a Foreign Legion into which we could enlist the many efficient members of the Polish Forces. We are short of manpower, and such a step would be of great assistance. Further, it would. be strictly in accordance with precedent, and if we did that we should get solid value for the money we are asked to pay. We should get the benefit of the money we have spent on them, the money which we are now being asked to spend, and the money which it seems likely we shall have to spend in future. Further, it would be good business to make better use of these men that we have been doing up to now. I also suggest that some of them—those who were either unwilling or were not available for further Army service abroad —could be used to supplement our deficiency in manpower and labour.

I would like to call attention to Vote 13, Subhead E, which concerns the retired pay, etc., of colonels and regimental and departmental officers. This Vote covers only a portion of the retired officers, and shows an increase of £200,000. I would like to ask whether that increase applies to those officers whose retired pay was stabilised in 1935 at 9½ per cent. below the basic rates of the Royal Warrant of 1919? It is a very old standing grievance, frequently brought up in this House, that these officers have not had the amount by which their retired pay was reduced restored to them. I asked a Question in the House last week as to how much it would cost to restore to these officers the amount by which their retired pay had been reduced, and the answer was, £180,000 to £200,000. I notice that this figure is for £200,000, and I am wondering whether justice is at last to be done to these officers. They have been very hardly and scurvily treated in the past, and I hope that this £200,000 is intended to deal with their grievances, and that the Secretary of State will be able to answer the questions which I have put.

Mr. William Teeling (Brighton)

I propose to deal with Vote I, Items F and G, in relation to civilians at pay and record offices, which shows an increase of £338,000, and civilians attached to regimental units, for which there has been an increase of £1,226,000. I should like some enlightenment as to these figures. I can only take a personal case of which I have knowledge, and it makes me wonder exactly how this money is to be spent and what is really happening. I am referring to the R.E. records which have their offices at Brighton. In 1939, this record office had 80 pay clerks and 60 record clerks and by March, 1946, the number employed was 1,300. The present strength is approximately 750, and the authorised strength for 1st February, 1947, was 590. In other words, there is a surplus of about 160. I find that the first lot to be discharged included no fewer than eight men who are completely disabled as a result of the last war. They are not able to do any other kind of work, and apparently no suitable work can be found for them. I find, however, that among those left behind, are—and I am now quoting from a letter from a constituent on whom I can definitely rely: A husband, wife and daughter, a publican, not an ex-publican, who is still carrying on his business and has done for several years, a newsagent, and a tobacconist with a very considerable income, who, incidentally, has never served in His Majesty's Forces and they have been employed for the past four or five years. Also a retired bank manager, and many others, with incomes that enabled them to come to and from the office in their own cars. There are numerous cases where husband and wife are employed, and married women whose husbands are in good positions outside. There are a number of men who have never served in His Majesty's Forces, and single women, who can also run their own cars, still employed, who could well be dispensed with and absorbed into industry, as the work at present does not warrant such a large staff. 7.15 p.m.

Why should these people be entitled to employment, when these eight men, to whom I have referred, are being turned off? Some time ago, I was asked about this matter, and these men were then given temporary work. Now I hear that redundancy notices have been re-issued on 7th February. Here is a letter from one of the men concerned: No doubt you are aware that our redundancy notices were issued on 7th February in spite of the fact that the War Office promised to retain our services, provided we were profitably employed on the entitlement medals work. However, according to them, this job can now wait indefinitely, although the Departments concerned have many thousand of application forms waiting to be despatched. The position seems to be that little work has been found for them, while others, who are civilians with practically no war record at all, are being left behind. The answer will probably be that according to the arrangement last year, only 3 per cent. of ex-Servicemen can be employed in Government offices. Surely a War Department should be the Department to employ far more than 3 per cent. of these men? People who are being asked to join the Army will surely want to feel that if they do so, something will be done for them afterwards.

So far back as 1906, there was a Commission on this particular subject. I quote from Cmd. Paper 2991, of 1906: The Committee recommend that the Government should direct the various public Departments to fill suitable vacancies by ex-soldiers and sailors of good character, and that only in the event of such candidates not being forthcoming were posts to be filled by civilians. Today, although we are increasing the amount of money being spent on this Department, we are priding ourselves because we are actually employing 3 per cent. of ex-Service personnel, and yet men like these are being turned out. To my mind that is disgraceful. How do the Government expect people to join up it they feel that when they retire, at the age of 45, there will be no jobs available for them? Surely, Government Departments. and especially the War Department, should do their best to find suitable work for them?

The Deputy-Chairman (Mr. Hubert Beaumont)

I am afraid that I have allowed the hon. Member to go further than I should have done. He is now getting on to policy, which is not under discussion.

Mr. Teeling

If it is a question of increasing the amount of money for this Department, and if I have a particular case in my constituency, is it not right and proper that when people are being dismissed they should be the people who have not taken any part in the war?

The Deputy-Chairman

The hon. Member is now getting back to policy. We can deal only with the Supplementary Estimates. What he is now saying is a matter for discussion on the Estimates as a whole.

Earl Winterton

Surely an hon. Member is entitled to ask why a person has been dismissed?

The Deputy-Chairman

Yes, and I have allowed the hon. Member considerable latitude, but he is now making a Debate on a subject which I rule is out of Order.

Mr. Teeing

I bow to your Ruling, Mr. Beaumont. But I know about this case of people who have been dismissed, and that the reasons given for their dismissal was that an agreement was arranged whereby only 3 per cent. of the people employed were to be ex-Service personnel, who were badly wounded during the war. I would like the Secretary of State to explain how it is nothing can be done for these disabled men, while other fit men and women are being kept on.

Lieut.-Colonel Lipton (Brixton)

May I put one or two points to the Secretary of State for War in connection with subhead F, "Civilians at Pay and Record Offices "? This is a revised Estimate which shows some increase on the original Estimate. It does not emerge very clearly whether this increase represents a policy on the part of the War Department of increasing the number of civilian employees in the pay and record offices, and at the same time reducing the number of Service personnel employed there. It is not clear from sub-paragraph (c) on page 10, how the increase becomes necessary at all. We all know, of course, at a time when demobilisation is proceeding fairly rapidly that there is a very considerable addition to the work of the pay and record offices. It seems to me, therefore, that if demobilisation is slowed down this kind of pressure must inevitably also be slowed down, so that this argument cannot on the face of it be advanced as a satisfactory explanation for the increase that is being asked for now. It may be that other considerations are receiving attention at the moment, in view of Command Paper 6715, which aims at a uniform rate of pay between the Services. Possibly at another time, it will be in Order to discuss some form of unified pay and record system applicable to all three Services with a considerable economy on the present system.

Brigadier Low

I should like to return to the point made by my hon. Friend the Member for Westbury (Mr. Grimston) in connection with Vote 14. It seems to me to be an indictment of the Government that we have suddenly learned in the last week or so that the British taxpayer is to pay £20 million entirely because of illicit trading that has taken place between, so we are told, members of our Forces and our ex-enemies. Why should it be that, without offering any explanation of the failure to find other sources from which payment of this sum should be made, the Government put in the explanation to these Supplementary Estimates the bold statement that we have now to find £20 million for this current year and by implication, as the hon. Member for Nelson and Colne (Mr. Silverman) reminded us, we might have to find a greater sum later? In passing, I should like to correct an impression which the Member for Nelson and Colne left, and that is that the illicit trade had gone on largely at the expense of the people of Germany. It seems to me completely and wholly at the expense, of the people of Britain.

On 20th May the former Secretary of State for War made reference to the matter, but we were given no indication that the sum was of this size or anything approaching it. Furthermore, from the very treatment of the statement, it is clear that the right hon. Gentleman's predecessor did not realise the gravity of the situation. He talked quite glibly about two months' delay before the necessary steps, which he advised were essential, were put into force. Therefore, it is clear that there has been a grave case of maladministration. Let us look at the way in which this loss has been incurred. I can say again, it is due to black market operations, as they are known, between members of our Forces and our ex-enemies, and in the course of these black market operations currency was used, which I suppose had been printed by one or other of the occupying Powers. There has been no suggestion that this currency collected in surplus quantities in the hands of the Paymaster, the Post Office and ultimately in the hands of the Exchequer was forged currency I take it, seeing there is no contradiction, that I am right in that, and that, therefore, the currency must have been printed by one of the occupying Powers.

I would ask the right hon. Gentleman the Secretary of State for War to tell us whether he has approached the other occupying Powers to see if they will bear some of the loss. I should like him further to explain why it is that the collection of the surplus marks must necessarily result in a loss to our Exchequer. Why is it that he and the Treasury cannot find some way of getting over this difficulty? I imagine we could get into complicated arguments on this subject, but surely the Committee knows that if a private bank —and banks still are private—had incurred this loss its Board would have got a great deal more than disapproval from the shareholders. It seems to me to be a case that requires a great deal of explanation from the right hon. Gentleman.

I should like now to come to a few smaller points which also, in my opinion, require some explanation. If the right hon. Gentleman turns to Vote I he will see that under subhead B there is an increase in the revised Estimate over the original Estimate of 43 per cent. Does that mean that the Army is now 43 per cent. larger than it was estimated it would be at the time when this Estimate was made? In passing, it is curious to note that though there has been a great increase in pay, there is no similar ratio increase in allowances, and perhaps, too, he can make that clear. May I turn now to the payment of war gratuities? Perhaps I should disclose that as an officer I, like many other Members of this House, have a personal interest in this, and we are particularly pleased that these war gratuities are going to be paid. I think that many of us have been wondering for some time when these war gratuities and demobilisation benefits, if at all, were to be paid to hon. Members of this House. The right hon. Gentleman knows that in some cases hon. Members of this House have been released under Class A; in other cases, mainly in cases where hon. Gentlemen are very much younger than the normal Members of Parliament, they have not been so fortunate, and I gather they are not likely to receive anything like the Class A benefits. Hon. Members of this House, who left the Army because they were elected to this House, come under the class of release for special civilian employment, and they were placed on the unemployed list. For them, as indeed for all of us, it is a good thing that these payments should he made as soon as possible.

7.30 p m.

Now I come to subhead R, "Bounties for soldiers on special short-service engagements, etc." The right hon. Gentleman is an optimist. He expected to get 25,000 short-service recruits before the end of this financial year. In his last statement to us on the position he disclosed that he had 9,000 short service recruits by the end of the year. With a prescience and foresight denied to some of his colleagues, he seems to have anticipated a state of unemployment which would produce quickly for him 14,000 short-service re- cmits. Perhaps he will tell us why he anticipated a much larger number than appears to be justified by the records at the end of December.

I turn to the subhead which deals with the Territorial Army County Associations. I reinforce the plea that was made by my hon. and gallant Friend the Member for Petersfield (Sir G. Jeffreys), who asked the reason for the increase in the Estimate. As I understand it, the War Office's revised Estimate caters for the Territorial Army setting up shop on 1st January, but it is now not to set up shop till 1st April, and yet we have to provide a greater sum for the Territorial Army County Associations. I would like an explanation of that increase. I have no doubt that there is some very good reason.

There axe one or two points I wish to raise in connection with the Poles. Whatever may be the legal or illegal position of the Polish land forces, there can be very little difference of opinion that these payments have to be made while the officers and men of the Polish land forces continue to serve in their land forces or in the Polish Resettlement Corps. In the course of his remarks to the Committee at the opening of this discussion, the Financial Secretary to the War Office implied that the Polish officers and men had been retained for a longer period than had been expected. Has that been a change of policy? If so perhaps he will give us the reason for it? What has happened to slow up the expected rate of release of the Poles from the Polish land forces? In passing, I beg the right hon. Gentleman to dispose of the question of legality or illegality. The matter has been raised over and over again in the House, especially by the hon. Member for Aston (Mr. Wyatt) and the hon. Member for Nelson and Colne (Mr. S. Silverman). It is about time the Government came down on one side or the other. Also under the same head is the item "Payments to India under the Indian Defence Expenditure Plan." I understand that that is payment in respect of Indian troops employed on Imperial duty outside India. Is it not a fact—perhaps the right hon. Gentleman will tell us—that some limitation is imposed upon the employment of those troops by the present Interim Government in India? If that is so, why should the taxpayer of this country be required to pay these enormous sums in future? Perhaps the Minister can give us an answer to the question? As to the general question, we must not be too complacent—I am sure the right hon. Gentleman is not complacent—the fluctuations in budgeting are very marked.

As the Minister stated at the beginning of this discussion, it may he that if certain sums had been available from other Governments as expected, we should not now find ourselves faced with the necessity to discuss this Supplementary Estimate. Even if it were so, this Paper discloses great changes in Estimates. I should not like this Committee to indicate that they were satisfied. We quite realise the difficulties that there have been. The hon. Member for Nelson and Colne reminded us that it is our duty to examine very closely into every item of expenditure in this Paper. I hope we may get a careful answer to the questions put from this side of the House.

Mr. Chetwynd (Stockton-on-Tees)

I found the Explanatory Memorandum to these Estimates a very great help. It has enabled me to follow what otherwise might have been a very difficult statement. I welcome the statement by the Financial Secretary that the 37 million pounds in payment of postwar credits and gratuities this year accounts for a substantial part of the increase. In regard to postwar credits, I note that the Explanatory Memorandum states that the credits will be paid, as far as possible, during the current financial year. During the past year I have received a number of letters from men on their demobilisation leave, saying that they have not received their gratuities and postwar credits in adequate time, and I want an assurance that they will be paid before the end of this financial year. I hope that the regimental pay and record offices now have this problem in hand and that they have the necessary staff and account machinery to deal with it. I hope they will speed up the payment so that they may be completed during this financial year. Now that the bulk of demobilisation is over, can the Minister say whether he has been able to transfer from the pay offices and record offices any substantial body of people to more useful work in the Army? I think that is a possibility which should he examined.

I would be grateful, on Vote 1 (a) and (b), if the Minister could break down the sum of something like £47 million increase in certain pay and emoluments. This appears to be due to the increase in Indian personnel and certain increases in pay not worked out when the Estimates were completed, and also due to the increase in the numbers retained in the Army over what was expected, and if he could, give us more detailed information on that point I should be grateful.

Earl Winterton

I do not want to make a speech at this period, Mr. Beaumont—I hope to make my main speech if I catch your eye later—but I thought it would be for the convenience of the Committee if the right hon. Gentleman would answer some of the questions put from this side of the Committee. I want to reinforce what has been said by the hon. and gallant Member for North Blackpool (Brigadier Low) and the hon. Member for Westbury (Mr. Grimston). We have a very considerable feeling—if I may have the right hon. Gentleman's attention for a moment —of disquiet at this very serious loss of money—that is what it is to the British taxpayer—in Austria, and it would be for the convenience of the Committee if the right hon. Gentleman, who always treats the Committee most courteously, would address the Committee at this point. Perhaps he would, in particular, refer to the loss of £20 million. I would remind the Committee that £20 million is a fifth of what was generally considered to be the total annual Budget before 1900, yet the Financial Secretary did not deign to make reference to it in the course of his observations.

The Secretary of State for War (Mr. Bellenger)

I should be only too glad to comply with the noble Lord's request, but I wish to make an appeal to the Committee—or I shall at the conclusion of my remarks—to give us this Supplementary Estimate. Obviously I cannot damp down the Debate, but it is more for the convenience of the Committee if hon. Members put their various points and the Minister then replies. It only prolongs the Debate if the Minister is expected to get up on more than one occasion to answer the various points put by hon. Members—

Earl Winterton

Does the right hon. Gentleman suggest, when talking about prolonging the Debate, that hon. Members of this Committee have not a perfect right to ask questions? What has "prolonging the Debate" to do with it?

Mr. Bellenger

The noble Lord knows, of course, that hon. Members are quite entitled to speak as long as they can catch the Chairman's eye. I do not wish to interfere with their rights. All I was trying to do was to make the Debate as orderly and tidy as possible. An appeal has been made to me to reply at any rate to that portion of the Debate which has, already taken place. We must remember that we are dealing with an Army which was swollen during the war years and which has still not reached its peacetime proportions No business concern could ever hope to estimate and deal with the vast sums of money with which we are dealing in addition to occasional changes in the Government's policy during the year, and then come out in the end as near as we have done in this year's Estimates. We are asking for a Supplementary Estimate of £50 million. That is not large in relation to the problem and the forces with which we have been dealing. I propose, with the permission of the Committee, to deal seriatim with the points put by hon. Gentlemen on both sides of the Committee. There are quite a number of them, and I hope the Committee will bear patiently with me if I take time in replying as fully as I can. I do not want to weary hon. Members, but all the points have been points of substance.

The main point of substance has been the loss of £20 million in relation to what one might call speculation by the troops in Germany and Austria, which resulted in the British Treasury being landed with a considerable number of marks and schillings. The hon. Member for Westbury (Mr. Grimston) rightly picked on that point, as indeed, when the matter came to my attention when I was Financial Secretary, it startled me. Although I have had some experience of the agility and, as one hon. Gentleman called it, the "slickness" of the British Army in making a deal and making a profit out of that deal, I was not aware of anything like this. The strictures passed by the hon. Member for Westbury on His Majesty's present Government will not all reach the right mark because, it may interest him to know, a very large proportion—I cannot tell him how much—of these speculations occurred during the time of his own Government or of the National Government which preceded the present one. When our troops went into Germany—

7.45 P.m.

Mr. Grimston

The right hon. Gentleman will Observe that the Explanatory Note with these Estimates says that this loss of £20 million arose during the current year. The right hon. Gentleman has been asked whether that is the total loss, and that was the question I was trying to put.

Mr. Bellenger

Yes, Sir, the loss came into this year because the marks which have accumulated have to be dealt with in this current year, but the actual speculations occurred right from the start when British troops went into occupied countries. I suppose I must condemn any private enterprise operations such as these. It is obviously not right that British troops or anybody else should make a profit out of the British taxpayer and the British Treasury, but the fact remains—I put this to hon. Gentlemen—that when wars happen, all sorts of transactions take place—[HoN. MEMBERS: "Hear, hear."] It is not to be wondered at in view of what I have heard in this House during the war and since about the speculations that went on, not only by troops but by civilian contractors, that when the troops saw the opportunity of making money, they took it. We all regret it and I hope that everyone—

Earl Winterton

Who are these civilian contractors? Surely we cannot discuss them on this Estimate? If the right hon. Gentleman introduces that subject, we shall have to ask permission to pursue it.

Mr. Bellenger

Obviously I cannot pursue that point, but the noble Lord knows that these matters have been brought up both during and since the war. I can say nothing more—

Earl Winterton

What has this to do with the Estimates?

Mr. Bellenger

—in this Debate, but what I am trying to point out is that it does not lie in the mouths of hon. Gentlemen opposite to condemn British troops because they speculated. They speculated. and speculated wrongly, I quite agree. It should never have been done, and as soon as we found that it was being done we attempted to stop it, and I hope we have successfully stopped it—

Mr. Grimston

I specifically said that I was not blaming the troops for this, but the right hon. Gentleman has said that this started from the beginning of the occupation of Germany, which was about April, 1945. This Government took office in July, 1945. Three months after VE-Day this Government took office, but they did nothing about this until 26th May, 1946, more than nine months later.

Mr. Bellenger

Just as the troops were swift in their military operations advancing across Germany they were swift in finding how easy it was to make a profit in this manner, described so ably by the hon. Member for Westbury—

Mr. Grimston

The Government were extremely slow in finding it out.

Mr. Bellenger

The hon. Member for Westbury has evidently been let into some of the secrets. As to the point of his criticism that the Government were slow in not stopping it, I would remind the Committee that, when this started, operations were proceeding. Even when operations had finished, as the hon. Gentleman said, in July, 1945, when this Government took office, there was a considerable amount of movement and settling down, and we were the first nation to alter the system of paying out troops either in our own currency or in the currency of the land where they were serving I do not know what American losses have been, but American troops are no slower than British troops at finding a way of making a profit in various ways, and I should imagine their losses had been very considerable.

We took steps other than that of stopping the German currency payments of the soldiers' wages and, let us be quite clear, not only soldiers' pay, but officers' salaries too, because they all had a hand in this merry game. We took certain steps before that happened to try to prevent these depredations going on at the expense of the British taxpayer. What we did was to limit the amount of German currency which the man could draw to the wages which were due to him. Therefore, if he wanted to convert the German marks it which he was paid at the pay table, as the soldiers were doing quite merrily, by converting German marks into British postal orders and so forth, he was prevented from buying more postal orders or transmitting his German money home, through the British Post Office and by other means, to the amount of money that he was permitted to draw in wages. Then, again, it was only permissible for any soldier to take £10 in sterling out of this country when he embarked for overseas, with the result that he was limited, at any rate in theory, to acquiring German marks to the equivalent of his £10 I will not say that troops did not take more than £10 out of the country, for it Is a very difficult matter, unless one searches every officer and man, to make sure that he is not evading the law. One of the most important steps we took—and we had to take legal opinion before we could take it—was to change the whole basis of currency in which the British soldier was paid, and he is now paid in what are known as B.A.F.Vs. We hope, and we have reason to believe, that these quick money making methods at the expense of the British taxpayer have been stopped. I do not think I need say more than that at the moment except that it was going on in the lifetime of both this and the previous Government, and as soon as we were aware of the large sums involved we stopped it —at least we believe we have stopped it and there are no leakages continuing now.

Brigadier Low

Before the right. hon. Gentleman leaves that, there is one question—

Mr. Bellenger

I would appeal to the hon. and gallant Gentleman not to interrupt.

Brigadier Low

I asked a question which has not been answered.

Mr. Bellenger

I have a long list of detailed questions put to me by hon. Members, largely on the benches opposite, and I want to deal fairly with them. It means I must limit my remarks on each subject if I am to give them an answer. Otherwise I am afraid I shall be detaining the Committee really longer than they will have patience to listen to me. The hon. and gallant Gentleman knows that I am always willing to give way, but there must be a limit if I am to keep within a reasonable time.

The hon. Member for Westbury mentioned Subhead G of Vote 5—civilians attached to railway stores. That comes under the heading of "Quartering and Movements" and I think it is a reasonable amount when one considers the large masses of troops we had to move about from different parts of the world. Dealing with the question asked by the hon. and learned Member for Carmarthen (Mr. Hopkin Morris), I am afraid that it is not possible for me to continue his point, though it was a very substantial one, namely the re-organisation of the Army and the reduction of certain infantry battalions. I should be out of Order if I dealt with that, but I quite agree that it may be a very suitable subject for the main Estimates which will be introduced within the next few weeks.

My hon. and gallant Friend the Member for Dudley (Colonel Wigg), supported by the hon. Member for Solihull (Mr. M. Lindsay), raised the point as to the new pension rates, and the liability attached to them. The hon. and gallant Gentleman the Member for Dudley made an amusing speech, and illustrated his points with his own experiences. I had a good deal of sympathy with him when he was telling us how he was referred from the Royal Hospital, Chelsea, to the War Office and back again, although I think he perhaps elaborated his point about the Secretary of State not knowing what is going on in his own Department to a point which went beyond the reasonable bounds of humour. However, my hon. and gallant Friend seemd to be satisfied with the point he was making. Let me say right away that I will examine carefully the point raised about this increase of liability due to increased pension rates, and I hope it will be possible for me to settle that point with him to our mutual satisfaction.

Mr. Boyd-Carpenter

And to that of the, House.

Mr. Bellenger

Certainly, I will also acquaint the House on some suitable occasion with the information I am able to get and, possibly, the decision I shall be able to make. I would remind my hon. and gallant Friend, who made great play with the out-of-date methods of the War Office, going back to 1815 and "1066 and all that," that at least in those days the hon. and gallant Member, if had been alive, would have found no Royal Hospital, no pensions, and, indeed, no War Office. I can only hope, therefore, that the result of my investigations may convince him that we have made some slight advance since the days of 1066

My hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) raised a point which queried not only the Supplementary Estimate for the payment of the Polish Land Forces, but also the policy on which that is based, if I understood him aright. I do not propose to answer him tonight; indeed. I doubt whether I should be in Order in doing so on the question of policy, namely, on the legality of making these payments.

Mr. S. Silverman

I have difficulty in following my right hon. Friend. Policy and legality are not the same thing; they are two totally different questions. Also, I asked him about something which is not merely in Order now, but which would be in Order on no other occasion. I want to know on what authority this Supplementary Estimate was incurred. I do not want to repeat my argument, which I adumbrated at some length. that this liability was incurred on no authority and every penny spent was illegally spent.

Mr. Bellenger

I would merely say in answer to my hon. Friend that the policy was laid down—

Mr. Silverman

I am not talking about policy.

Mr. Bellenger

A policy is either legal or illegal, and the policy we are pursuing of paying these Polish Land Forces arises out of the Explanatory Notes in the main Estimates of 1946 on page 75 where it says this: This Subhead provides for the pay, etc., of the Polish Land Forces serving under British command, pending final arrangements as to their future. A certain sum of money was provided under that heading to pay these forces. What we are asking is that an additional sum shall be provided to pay those forces which have continued in existence under British command since the days when the main Estimates were introduced last year.

8.0 p.m.

Mr. S. Silverman

Will my right hon. Friend understand—and I feel sure I am right about this—that he cannot justify the illegality of the Supplementary Estimate by saying that the main Estimate was illegal too? What we are concerned with tonight is the Supplementary Estimate, and it is no answer to my argument—if I am right—that the Supplementary Estimate was illegal, to fall back on the main Estimate and say that two wrongs make a right—the main Estimate was illegal, this is illegal, and therefore both must be all right. That seems to me to be the law of the jungle.

Mr. Bellenger

The hon. Gentleman will put his argument in his own way, and I prefer to put my argument in my way. I am not attempting for one moment to say what he is trying to put into my mouth. I think it would be out of Order to enlarge on the point that has been put to me tonight by my hon. Friend the Member for Nelson and Colne as to the legality of these payments.

Mr. S. Silverman

What is the legality?

Mr. Bellenger

I merely say that these men have been paid, and rightly paid, for the good work they have done within the British Army. All I am asking for is an additional sum to pay these men. I hope it will decrease considerably, because we are endeavouring to get these men either to go back to Poland or to settle, through the Polish Resettlement Corps, either in this country or overseas. If the explanation I have given tonight does not satisfy my hon. Friend, I regret it, but I cannot take the matter any further tonight.

Mr. S. Silvermanrose—

Mr. Bellenger

I am very sorry to disappoint my hon. Friend, but if he wishes to do so he must take another opportunity of raising this matter. I cannot go any further tonight on that point.

Mr. Silverman

If my right hon. Friend will not give way, I shall have to follow him in the Debate.

Mr. Bellenger

As my hon. Friend pleases. The hon. and gallant Gentleman the Member for Petersfield (Sir G. Jeffreys) raised several issues which I shall try to deal with. The first was on Vote 1. subhead H, which concerns the A.T.S. As under subheads A, B and C, the increased payment which is being made, and which we are asking the House to approve. is due partly to the increases in the strength of the Army, and that includes the A.T.S. within the Army, resulting I am bound to admit in part from a certain slowing-down of the release programme in the latter part of the financial year. With regard to Vote 2, subhead B, which concerns the Territorial Army, the increase is not a very large amount when one considers that during the latter part of this financial year, although we shall not start active recruiting for the Territorial Army until 1st April, there has been a lot of administrative work entailed on the part of the county associations in preparing for the 1st April, when we hope to make our main recruiting appeal. The amount involved is not very large in relation to the whole of the Supplementary Estimate, but I think that the hon. and gallant Gentleman will agree with me that it has been well spent.

With regard to Vote 10, subhead G, which the hon. and gallant Gentleman mentioned, as he rightly anticipated that includes sums due in the way of compensation for dilapidations and so forth, owing to the increased speed with which His Majesty's Government have been derequisitioning private properties which they took during the war. With regard to Vote 13, subhead E, which deals with retired pay, the hon. and gallant Gentleman of course brought forward a matter which he has raised on many occasions in this House, namely, the reduction in retired pay made during what was known as the "economic blizzard" and which was never fully restored to officers. I do not propose to say anything on that matter tonight. I cannot give the hon. and gallant Gentleman the satisfaction he wants; this matter has been thoroughly Debated on previous occasions and therefore I must pass to the next subject, although I regret to have to do it and I know the hon. and gallant Gentleman will regret that I cannot give him the answer he wants tonight.

Sir G. Jeffreys

I asked whether any allowance was made for that service which he has just mentioned in the increase of £200,000.

Mr. Bellenger

The hon. and gallant Gentleman is perhaps being a little optimistic. I have to inform him that the £200,000 does not cover the point which he raised and argued so ably tonight, as he has done on previous occasions.

The hon. Member for Brighton (Mr. Teeling) and my hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton) raised the question of the redundancy of civilians serving in the record and pay offices. I sympathise with the point of view of the hon. Member for Brighton, but the fact remains that the Army is diminishing and must diminish, and therefore the civilian services attached to it must diminish too. The time must arrive when the Army must come down to its peacetime level. Unfortunately that time has not arrived yet, but I think we should be neglecting our duty at the War Office if we did not economise in every possible way we could. Unfortunately it will result in some of the civilians in record and pay offices having to find alternative employment elsewhere, or else, taking advantage of the offers we are making, to transfer to other record offices which we are now establishing in preparation for the new Army which is arising.

The hon. and gallant Member for North Blackpool (Brigadier Low) mentioned Members of this House who were serving at the time of the Election and who were given the option of continuing to serve in the Army or of not continuing to serve in the Army but to carrying on their Parliamentary duties in this House. If they choose the latter alternative they were relegated to unemployment, and indeed by that method, which is not one over which I have complete control, they did lose certain of their demobilisation benefits. But they were entitled to their war gratuities and, if the hon. and gallant Gentleman has not recovered his yet, I can assure him he could do it. I recovered mine long ago. Of course I got out before he did, but that was probably due to the fact that he, being a much younger man, was able to carry on the active fight longer than I was able. I came to the House earlier than he did and therefore, like him, I lost some of my demobilisation benefits. However, I am not grumbling about that, and I am sure the hon. and gallant Gentleman takes this matter in as cheerful a frame of mind as he possibly can. I hope also that he has not reached such an abject state of poverty that we shall be compelled to grant him some ex gratia payment to keep him going.

The hon. and gallant Member for North Blackpool also referred to short-service engagements. Vote 1, subhead R, Is purely a bookkeeping entry. We have merely specified it here because the Treasury instructed us to open a special bookkeeping account to show the money spent on bounties for the short service engagements, and on the whole I am bound to say that the short service engagement scheme is going very satisfactorily indeed, especially in relation to officers who are either serving now or who have already left the Service and want to come back.

Brigadier Low

Could the right hon. Gentleman give us the latest figures?

Mr. Bellenger

No, I cannot at this moment give the figures out of my head, but this is a matter which could be usefully pursued by putting a Question down on the Order Paper. If that were done should be prepared to answer it. I think I have dealt as faithfully as I can and, I hope, in as full detail as I can, with the points that have been raised by various hon. Members tonight. Considering that we are demobilising something like 700,00o men within this year and the next I do not think one can expect the Army Estimates to be rigidly accurate. From what I have seen of previous Estimates and Supplementary Estimates in this House—I have not seen as many as the noble Lord, of course, but I have seen quite a few—and although I am not claiming for one moment that we have estimated as closely as might have been possible, taking it by and large I think we have done our best. I hope the explanation I have given to the Committee this evening will now enable them to let me have the Estimates.

Sir G. Jeffreys

Is the Minister not intending to give an answer to the question concerning the employment of Polish troops and the suggestion that they might be embodied in a foreign legion?

Mr. Bellenger

I have answered the question about creating a foreign legion. It is against the policy of His Majesty's Government to do so, but I think I can say to the hon. and gallant Gentleman and, in fact, to the whole Committee, that the Polish troops who were brought here came only because they had served the Allied cause and fought so valiantly during the war against, in the main, Fascism and Nazism. I think I can say that we are rehabilitating them, either by getting them back to Poland—and I only wish that those who are willing could go hack a little quicker, but the delay is not all on this side—or, in the case of those who do not want to go back, by establishing them in some civilian occupation where they can lift up their heads, look every man in the face, earn an, honest living and Live the rest of their days in peace.

8.15 p.m.

Major Legge-Bourke (Isle of Ely)

The right hon. Gentleman has just mentioned the matter of the Poles, and I should like to begin by saying a few words about them. There seems to me to be considerable confusion in the Minister's mind as to the difference between policy and fact, and one now begins to understand much more clearly, "Let us Face the Future." But that is perhaps a little outside this discussion. What I did ask, and what we have not yet had cleared up, is why that original decision was taken to presume that so many Poles were to be able to get back to Poland. We do not know why that decision was ever taken. It was obviously a wrong decision and it appears that there is no possible ground for ever having made the supposition that very many Poles would get back. In view of what has happened today there seems less likelihood than ever.

I do ask the right hon. Gentleman to bear in mind in connection with this matter that however much money we spend on the Polish land forces, whether or not those forces are legally right, the fact remains that we owe them a debt which I hope the right hon. Gentleman intends to repay. The hon. Member for Nelson and Colne (Mr. S. Silverman) today raised the matter of their legality and was a little surprised to hear the hon. Member for Aston (Mr. Wyatt) state during Question time that the fact that they were illegal has now been definitely established. One now knows who it was who established it. The hon. Member for Nelson and Caine is, of course, entitled to his own opinion, and we had better leave, it at that.

I want now to turn from the question of the Poles to the other parts of the Estimate. First, with regard to the point originally raised by my hon. Friend the Member for Westbury (Mr. Grimston) concerning railway stores. When he came to reply the Minister said that those stores came under the general heading of "Movement," and referred only to matters connected with the movement of troops. I should like to ask him whether he would confirm that that is really so. The increase is £718,000 and 1 am wondering how railway stores can actually be covered under the matter of movement. Is it a question of the vast pool of railway engines and that sort of W.D railway engine of which, I understand, there is a great surplus in the country lying about doing nothing? Whether it is that type of store or a question of maintaining offices and that kind of thing in railway stations is another matter, and if the Financial Secretary speaks again perhaps he would clarify the point.

There is also a matter concerned with Vote 13 upon which I should like to ask a question. So many people have chosen a gratuity in lieu of retired pay that an increase of £1,300,00 is shown in the Estimate. I do not know whether we could be given some enlightenment as to why it is that gratuities have been chosen in so many cases, but it does raise the whole matter of the Reserve and I imagine that it might not be in Order to discuss that too deeply tonight. We should, however, bear in mind the whole time the number of people who are going straight out of the Reserve and everything else, and those who are still liable to recall. We have no indication from this Vote as to how many those would be. There is still one very important question which the right hon. Gentleman did not answer, and had he allowed my hon. and gallant Friend to interrupt him it might have saved the Committee a little time. I think it was a very important point as to whether any of the other Allied Powers had had any part in this business of special vouchers.

Mr. Bellenger

I can answer that point. They have incurred their own losses, which are not part of ours, and they presumably have made their own arrangements.

Major Legge-Bourke

I am grateful for that information. I was wondering whether perhaps all the special vouchers which are circulating and are supposedly printed by our authorities were, in fact, the only ones, or whether there were some others resembling ours which had been printed elsewhere. I think it is just possible that that might have happened. I was hoping that perhaps the right hon. Gentleman would answer that point and that if the printer has been traced some slight representation might be made—if it has not been made already—to the offending Power. I understand that there is a little doubt over that matter, and I hope that it will soon be cleared up and that whatever is established will be announced to the country.

Earlier the Minister interrupted my right hon. Friend on the matter of demobilisation leave, and I wonder whether he would consider telling the Committee how great a proportion of those concerned did not take this leave and, if they did not, in how many cases this was as the result of their own choice and in how many cases they were not here to take it? In other words, how many came home after their due date for release? I think it was quite a number, and there were certainly some from East Africa, if the right hon. Gentleman remembers.

Mr. Bellenger

I think the hon. and gallant Gentleman is confusing disembarkation leave and demobilisation leave. Demobilisation leave arises when a man leaves the Services and goes back into civilian life.

Major Legge-Bourke

I am grateful to the right hon. Gentleman for that correction, but the fact remains that he said it depended upon whether or not they took demobilisation leave, from which it appears that certain men were refusing to take demobilisation leave. Another point to which I wish to refer is the matter of bounties, which was touched upon by my hon. and gallant Friend the Member for North Blackpool (Brigadier Low). My hon. and gallant Friend referred to the last figures which the right hon. Gentleman has given, and I hope that, before the end of the Debate, the right hon. Gentleman will be able to give us the latest news. I understand that, since the power cut, there has been a considerable increase in the number of men coming back. I remember that very early in this Parliament, the right hon. Gentleman the Minister of Labour said that the one thing he did not want the Army to become was a home for the unemployed. I do not want to get out of Order on this matter. The increase in regard to bounties is an original increase in the shape of £1 million, and I take it that the £1 million is sufficiently much in excess of the figures before the power cut was made to enable a pretty good influx as a result of the bounty. I hope, however, that the right hon. Gentleman will bear in mind all the time that if we simply allow the Army to become a second best to civilian employment, the Army, the country, and the world will suffer. I hope he will make a point of encouraging the British Army to consist of people who are proud to be in it, and not of people who speak about it in rather more derogatory terms, in a way in which even some hon. Members are inclined to do.

Mr. James Hudson (Ealing, West)

The Minister took part in the Debate, and made a reply to the speeches that had been made, earlier than he had intended to do by reason of the remarks of the noble Lord the Member for Horsham (Earl Winterton). There were several hon. Members on this side of the Committee who still wanted to speak about a matter on which he partially replied—to me, very partially—namely, the question of the£20million.

Earl Winterton

May I say that I did not intend any discourtesy to the Minister or to the Committee, but as we had no information on that matter, I suggested that the Minister should give some? I did not suggest he should make a full speech.

Mr. Hudson

I thank the noble Lord. I am glad that we are now in a better position than we were before to debate the matter. I think it is an appalling situation which has been disclosed. A sum of £20 million has had to come from the public Exchequer to cover illegal dealings in Post Office orders, German marks and Austrian schillings. Apparently there were illegal dealings by many people. Were all of them doing it? I do not think they were. At about the end of the period referred to, in May, 1946, I was in Austria with some other hon. Members, and I heard much comment among soldiers about the fact that this sort of thing had been going on. The comment was in the form of a complaint that some had taken advantage of the situation, while others had not done so. I imagine—and I do not think I am imagining too much—that there cannot have been more than half a million men engaged in the process. I think that half a million men is an extreme estimate of the number of people involved. These half a million people—I think a very much smaller number—have filched from the public Exchequer, on an average, £40 apiece. It is a disgrace that the War Office did not find that out until action was taken in May, 1946. The officials re- sponsible ought to have become aware of it as a result of the dealings in Post Office orders. Any post office engaged in this matter could have related what was taking place—I have no doubt they did—and action could have been taken; yet all the time the illegal process continued.

We have listened to the Minister describing this business in terms which I could not quite understand. My right hon. Friend may have intended to be more severe than he sounded, but it seemed to me that when he was talking about this "merry game," he would have been better engaged in describing it for what it was, a piece of utter dishonesty carried out at the public expense. I think that Parliament ought to speak quite firmly, and that it may be clear to anybody in the Army who reads the report of this Debate that Parliament has a very definite view with regard both to soldiers and to civilians who filch out of the public purse payments to cover illegal dealings in exchange. I think it is particularly important to say this to those people who are passing to and fro between Switzerland and England and other Continental countries and England at the present time. Certainly, to say it with reference to the Army is of the greatest importance. The Minister made slight references of disapprobation, but I think his references ought to have been very much stronger, and particularly they ought to have been stronger against his own officials for their failure to deal with this thing at a much sooner date. I protest against the dreadful disclosure made by these figures.

Mr. David Renton (Huntingdon)

Arising from the remarks of the hon. Member for West Ealing (Mr. J. Hudson), I wish to put a brief question to the Minister in the hope that either he or the Financial Secretary will be able to give an answer. Can he tell the Committee whether, in the course of what can only be described as a very large-scale swindle, any money has been recovered from individual people, including officials, who may have benefited from these transactions?

Mr. S. Silverman

I apologise to the Committee and to my right hon. Friend the Secretary of State for War if I appear to be over-persistent, but I think that an important issue is involved. The issue is not, as he and some hon. Members opposite appear to think, an issue of policy. That is not the point I raise. Although, as a matter of fact, it is not true that all the money has been spent on maintaining those who fought Fascism, and some of it has been spent in maintaining those who did not. I do not want to discuss that aspect, because I think it is out of Order. I do not want to refer to the question of policy. I endeavoured, to the best of my ability, to argue the point that the money had been illegally spent, and if it was illegally spent, it is a matter of irrelevance to the discussion that it was spent for worthy or meritorious purposes. If the purposes were worth it, if the purposes were such as hon. Members would approve, there is a constitutional method of getting authority for the payment, but that is not my point. I say that this debt was incurred without any constitutional or legal authority, and without the sanction of Parliament. To that point I have had no answer, and it is not good enough for my right hon. Friend simply to say, "Oh, I do not propose to pursue it."

8.30 p.m.

My argument may be entirely wrong; I hope it is. I would rejoice in the fact that it was ill-founded, and that there was nothing in it, and that everything had been properly done. But my right hon. Friend has not attempted to refute the argument. Perhaps he does not at the moment know what the answer is. If he does not know, it would be courteous to the Committee to tell us so. I assume, from the fact that he has not endeavoured to say that there was anything wrong with the argument, that there is nothing wrong with the argument. The answer must be that the money was illegally spent. There are ways of putting it right. If the objects were meritorious, the House of Commons is always generous in matters of indemnity. But I am sure no hon. Member will think it a light thing that money should be spent without proper authority, nor that there is anything wrong in raising in the Committee in this way doubts about a question of that kind. I think my right hon. Friend treated the matter too lightly. If there is an answer, let us have it. If there is not an answer, let him say so, and say that steps will he taken to put right whatever was done without authority, and we should all be content with that. We can then deal with the matter of indemnity when we have it before us.

It is no good saying, "This thing was illegal, but, as the objects of the payment were meritorious, we need do nothing about it." Charles I paid the supreme penalty for taking that view 350 years ago. I hope we are not going back to that. This is a serious matter, and we are entitled to a better explanation than my right hon. Friend has offered.

Mr. J. H. Hare (Woodbridge)

I join the hon. Member for Nelson and Colne (Mr. S. Silverman) in condemning the attitude the right hon. Gentleman took up in answering the very serious allegations made by my hon. Friend the Member for Westbury (Mr. Grimston). He has treated the Committee in a most light and frivolous way. Twenty million pounds is a large sum of money, and when it is lost to the Exchequer entirely as a result of black market operations, it is a matter on which we are entitled to have a full and detailed explanation. The Minister stated that these infringements of the currency regulations occurred from the very start. Those were his words. In other words, they occurred immediately after operations ceased in Germany in May, 1945. It took 12 months for the Government to take, or even to consider taking, effective measures to stop these very serious infringements of currency regulations, which were costing the country money all the time. The House should have been kept fully informed.

We have heard for the first time that the War Office did take certain other steps. They curtailed postal orders being sent back to this country, and troops were allowed to take only fro into Germany. But these palliatives were obviously quite insufficient. So, in May, 1946, a whole 12 months after the activities started, the Government decided at last to do something to remedy the situation. The announcement that they had taken this decision was presented to the House in the most extraordinary fashion. A question of £20 million was involved, but the best that the then Secretary of State for War could do, was to give an answer to a Written Question saying that under certain regulations he was intending to issue special currency vouchers. He then went on to say that it was going to take two months before he could print the necessary forms in order that this abuse could be checked. I suggest that the present Minister's predecessor was guilty of a very grave lack of efficiency in announcing his decision in such a fashion, and in adopting a very leisurely method of trying to solve the problem.

The right hon. Gentleman turned in his rather mocking and light-hearted fashion to these benches, and said that it was not for Members on this side of the Committee to condemn the troops for the action they took. We do condemn the troops for the action they took, because they were definitely cheating the country and disobeying the law. We also condemn quite wholeheartedly the Minister responsible. I would suggest that this incident, about which this country is hearing for the first time in any detail, is one other really shocking example of Ministerial inefficiency, so many examples of which we are beginning to see from day to day as a result of the prevent Socialist Administration.

I will leave that point, but there is one other point which I have been trying to raise in the last two hours. I would ask the Minister to look at Vote 10, Subhead W, which deals with "Services in certain theatres abroad." I do not intend to discuss the decrease in that Vote; I know that I should be out of Order if I did. But I would like to ask the Minister how much of this revised Estimate of £24,288,000 is represented by costs of works and buildings in Palestine. I can only assume that we should in fact expect to see a considerable rise on what we have been spending on those things over the last year. I would like to know whether the Minister can give us some idea of that figure. It is important, because Members on both sides have, for the last year, been much concerned with the conditions with which our troops in Palestine are having to put up. Their camps are really thoroughly disgraceful. We have had assurances, not only from the right hon. Gentleman, but from his predecessor, that efforts were to be made to improve conditions, to build hutted camps and to do away with as many tented camps as possible, to provide such services as electric light, N.A.A.F.I. entertainment, etc. We have been repeatedly assured over the last year that something was to be done. If the Minister could say that he had in fact expended money on that purpose—

The Temporary Chairman (Sir Robert Young)

Will the hon. Member indicate to which part of the Estimate he is referring?

Mr. Hare

I am referring to "Services in certain theatres abroad."

The Temporary Chairman

The hon. Gentleman cannot discuss that because that Subhead shows a decrease. There is no supplementary sum asked for in respect of it.

Mr. Hare

I naturally bow to your Ruling, Sir Robert. I did point out that I was not trying to discuss the deficiency. I was asking the right hon. Gentleman—

The Temporary Chairman

The hon. Member cannot discuss it at all. Vote 10, Subhead W, shows a decrease, and cannot be discussed.

Mr. Hare

I naturally bow to your Ruling, Sir Robert. I therefore end by expressing the hope that either the right hon. Gentleman or the Financial Secretary will, in his reply to this Debate, treat this matter of the £20 million that has been scattered to the wind as a result of black market operations, in a manner which is worthy of this House.

Mr. Boyd-Carpenter

The Minister, in his interim reply and with his customary geniality, dealt with a number of small points but he could have caused this Debate to be less protracted had he addressed himself to answering specific questions on two matters of major importance. Before passing to those questions, I would give the right hon. Gentleman one word of reassurance. The right hon. Gentleman was much upset by the fact that his hon. and gallant Friend the Member for Dudley (Colonel Wigg) indicated that he knew nothing about what was going on in the Department. Let me assure the right hon. Gentleman that his lion, and gallant Friend is Parliamentary Private Secretary to the Minister of Fuel and Power and, therefore, perhaps it is natural that he should be under the illusion that Ministers know nothing whatever about their Departments. The right hon. Gentleman has made no attempt to answer the question put in two most forceful speeches by his hon. Friend the Member for Nelson and Colne (Mr. S. Silverman). The question was whether the continuance of the Polish Armed Forces is or is not legal. The Minister can be certain that that question is not designed in any way to hamper the execution of our duty to these men. Nonetheless, it is the duty of this Committee to be satisfied as to its legality before passing a Supplementary Estimate for the financial maintenance of these Forces.

The right hon. Gentleman has been challenged more than once on this point. So far he has, most conspicuously, refused to answer. If the right hon. Gentleman cannot come to that Box and give the Committee a definite assurance that the maintenance of these Forces, for which we are asked to vote money, is legal, then it will be obvious to the Committee that the right hon. Gentleman knows that it is not That is not treating the Committee or the country fairly. Before we vote this money we are entitled to know whether or not the object is legal. I appeal to the right hon. Gentleman to prevent the inevitable conclusion that it is illegal and to give chapter and verse for its legality. I do not know whether the right hon. Gentleman desires to rise and do so? [Interruption.] Some hon. Members opposite appear to treat this matter somewhat lightly. I do not intend to be driven from the point by them. The hon. Member for Nelson and Colne realised the seriousness of this matter and the damning impression which the reiterated failure of the Minister to answer a straight question will give outside. I appeal to the right hon. Gentleman to give an answer. The right hon. Gentleman half rose and then thought better of it and relaxed in his seat. Let us hope that when he comes to reply, as I suppose he will, he will give an answer.

Another matter to which I wish to refer is that of the £20 million. It is fair to say that the right hon. Gentleman and the War Office have not been completely frank in this matter. The statement of his predecessor, in the written reply to which reference has been made, gave no indication of the existence of a major scandal. It indicated the necessity for minor remedial measures. It is astonishing that the Financial Secretary, in moving the acceptance of this Estimate, did not refer to this demand for £20 million to make up for moneys expended as a result of what is obviously a grave scandal. Before we pass this Estimate the Committee is entitled to find out a great deal more about this matter. Indeed, as the hon. Member for Nelson and Colne pointed out, the Committee is in duty bound to find out a great deal more. If this leakage of public money has been continuing over the prolonged period which the right hon. Gentleman indicated, can he say why it was not discovered earlier? Can he indicate whether those responsible in his Department for keeping a check upon these matters knew whether or not this was happening? If they did not, what on earth is the use of a financial Department that is blissfully ignorant of the leakage of £20 million of public money?

8.45 P.m.

Either these people in his Department —and he is responsible—knew that this, was happening and did nothing to stop it until £20 million had leaked away, as the right hon. Gentleman says, over a long period, or they knew nothing at all about it. I will ask the right hon. Gentleman this question: Has a court of inquiry into this matter been convened? I know, and many hon. Members on both sides of the Committee know, that if one is in a subordinate position in the Army and one loses half-a-crown, a court of inquiry is instantly convened, and, almost inevitably one is made liable to refund it. This is a case of £20 million. Has a court of inquiry been convened to discuss responsibility for this, to assess the blame and to ensure that future loses will not take place? As has already been pointed out, there is no assurance yet, and the Explanation of the Estimate is to the contrary, that, if we vote this £20 million, there is to be no further commitment. Can the right hon. Gentleman tell the Committee that there will be no further commitments in this respect? This is obviously a matter of very considerable importance.

Then I hope the right hon. Gentleman can explain a little more fully than he has done how it was that these transactions, regrettable breaches of discipline as they undoubtedly were, resulted in this enormous financial loss. As I understood his statement, it was that, as a result of these transactions, large sums in marks—I assume of occupation marks—had got into the hands of the military authorities—larger sums than were required for the pay of the troops. I want to ask the right hon. Gentleman, if I may have his attention for a moment, these questions: Why are these marks apparently so valueless? Why cannot they be used for necessary expenditure in Germany? Why must they be treated as a dead loss? He has not told us whether they are the occupation marks of the British zone, or of another zone, but they are, presumably, legal currency in occupied Germany, so why is it that they must be treated as a dead loss? There may be a perfectly simple answer to that, but I am suggesting to the Committee that that answer has not yet been given. All that we have been faced with is a bill for £20 million. It has been presented, and I am sure I carry the Committee with me in this, in a manner wholly inconsistent with the manner in which a responsible Minister of the Crown should disclose to the House of Commons, or to a Committee of the House, a major scandal of heavy financial proportions in the Department in which he is the responsible head.

Mr. Bellenger

Might I make an appeal to the Committee to terminate this discussion, because I understood, when I got up to reply, that the noble Lord the Member for Horsham (Earl Winterton) was asking me to reply to points already put? I endeavoured to do so, perhaps without giving complete satisfaction to one or two hon. Members, but I do not think I can carry this point any further tonight, and, therefore, unless hon. Members have any new points to put to me, I think it means prolonging the Debate unnecessarily.

As to the other two substantial points raised by the hon. Member for Nelson and Come (Mr. S. Silverman) and the hon. Member for Westbury (Mr. Grimston) on the case of the Polish Land Forces, whether the payment made to them, either in the original Estimate or in the Supplementary Estimate, is legal or not, that point will be decided by the Comptroller and Auditor-General and the Public Accounts Committee of this House, which will have to examine these accounts, and they will be the guardians as to the legality or otherwise of this payment. I cannot, in arguing with the hon. Member for Nelson and Come tonight, satisfy him that it is legal, any more than he can satisfy me that it is illegal It is purely a matter of opinion. I say that the payments have been rightly made to the Polish Land Forces, and that the Comptroller and Auditor-General and the Public Accounts Committee of this House will certainly put the matter in its proper perspective.

As regards the second point raised by the hon. Member for Westbury, it was pursued by other hon. Gentlemen, including the hon. Member for West Ealing (Mr. J. Hudson), who castigated me for not chastising in words of wrath the British soldier who made some money out of the British Exchequer, I do not deny for one instance that, according to the letter of the Ten Commandments, these men are guilty. But I seem to remember some famous words which start: The quality of mercy is not strained. … I am not offering it as an excuse for these men doing what they did, but it must be remembered that they have for long been underpaid by this country. However, the fact remains that what they did was illegal. I condemn it as such, and as much as my hon. Friends would like me to do. But that does not overcome the main point put by hon. Members opposite, because they said explicitly that they did not condemn the soldier, but only those who did not find out what was going on. If 1 were to explain how this operation proceeded, I imagine that I might be giving some tips to further black market speculators. both civilian and military.

Unfortunately, it centred in N.A.A.F.I. It was not a question which the War Office could control from day to clay. The goods were sent from this country through N.A.A.F.I., purchased in Germany and Austria by the troops from the canteens —and not only by the troops; there are other forces in Germany apart from the military Forces who have had a share in this—and then sold at enhanced prices to the Germans. The money received was then brought back to the canteens with which to purchase more goods, and so it went on in a snowball fashion. It was only after a period that this could be detected. As soon as it was detected, we made very radical attempts to stop it. In answer to the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) I would say that I think we have completely stopped the traffic, but more than that I cannot say tonight. I hope that, with the further explanation I have given on these two points of substance, apart from the various other points raised tonight, the Committee will agree to this Vote.

Mr. Pritt (Hammersmith, North)

I am very disquieted about the question of the Polish Land Force. I have listened to most of the Debate, if not all of it. As I understand it the Minister's reply is really another way of saying, "They say it is illegal, but I, the Minister, do not think it is I can advance no reasons for saying it is legal, and good reasons have been advanced for saying it is illegal. But, will the House give me the money just the same, because I may be caught later by the Comptroller and Auditor-General." As an excuse for theft, it would not go very far to say, "It is all right; I know that I am stealing your goods, but, sooner or later, I shall be picked up by the police." There are Law Officers in this House who are competent and who could tell the War Ministry in five minutes that it is illegal. But we are asked to sanction an illegality. The argument is, "Sanction it now; we shall be caught later." Surely, the only thing for the Minister to do is to ask for this Debate to be adjourned because he does not know whether the money for which he is asking is lawful or unlawful. I feel very strongly about it.

Mr. Leslie Hale (Oldham)

I had no intention of intervening in this Debate, but no answer has been given by the Minister, and we are entitled to one. There was a time in the history of this House when expenditure was scrutinised. Tonight, the Minister has asked for two sums of £20 million under two separate heads, each of which represents £2 per head for each family in Britain and each of which represents £60,000 from the town which I have the honour to represent. I am entitled to ask—I am comparatively new to this House and do not profess to know the procedure—what my position would be if, having no explanation as to whether this payment is legal or not, I voted for it, and the Comptroller and Auditor-General decided that it was illegal, and this House refused to pass an Act of Indemnity. Would hon. Members be personally liable or, if not, who would pay for it? If the Minister says, "I shall explain this to the Comptroller and Auditor-General and get his assent," why cannot he say what the explanation of the Comptroller and Auditor-General will be?

On the other side, which I personally find more disquieting still, we have had no explanation of how that occurs. We have been told that purchases were made from the N.A.A.F.I. and that they were "snowball" purchases. We have not been told why the money was not effective money, or what happened to the marks. I do not often find myself in agreement with the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). I think this is the second time in this House that I have found myself in agreement with every word of his speech. The other occasion was on the non-controversial and highly uplifting subject of lawyers. I have served in the ranks in the first world war, and I know what happened to me if I lost a button or the smallest piece of uniform. There was no question about the quality of mercy not being strained. I do not want to go into personal history—it might be out of Order—but I would just add that I would have wakened in the guard room in the morning to face a bleak and doubtful future. The Secretary of State for War says, "Here is £20 million. There has been no inquiry and nobody has been 'on the mat'." No senior officer has said "Why did you not report this matter 12 months before?" No officer of N.A.A.F.I. has said why they were allowing all these purchases of vital commodities of which our own people were being deprived, and why they were allow-this "snowball," as the Minister calls it, to roll down the hill to financial disaster. I think we are entitled to more explanation than we have had. Every one of us here is failing in his duty if he says, "It is only £20 million and we have got into the habit of talking of money without any conception of what it means." We should be failing in our duty, if we did not ask for a fuller explanation than we have had.

Several Hon. Membersrose—

The Temporary Chairman

I think the Minister has given the fullest answer that hon. Members could possibly desire.

Mr. Grimston

In view of what we regard as the extremely unsatisfactory nature of the Minister's reply, I wish to move to reduce the amount of the Vote by £20,000,000 in respect of the losses sustained under the heading "Balances irrecoverable and claims abandoned."

I beg to move, "That a sum, not exceeding £30,000,000, be granted for the said Service."

Mr. S. Silverman

This is a new question. So far we have been considering whether we shall grant the Supplementary Estimate for which the Minister has asked. The hon. Member for Westbury (Mr. Grimston) has now moved an Amendment, and I want to consider what my position is. I have objected to two items. One of them I regard as a completely illegal payment and, so far, I have heard nothing which legalises it. No one can say that the other matter is illegal. This Committee would be legally justified in saying, "However wrong it was, we are going to waive all claims against anybody," and, in fact, it would be wise to waive any claims there may be. I do not see how at this time we can recover any of these amounts from anybody. I would not stand in such considerable embarrassment if an Amendment had been moved to reduce the Vote by the amount of the Supplementary Estimate on the Polish Land Forces, because I am not sure how far the Committee would be justified in voting the Government a sum of money the legality of which has not been defended at all. The other point is quite different. I think we would be quite wrong not to pay this £20 million I think we would be equally wrong not to have the fullest inquiry as to how it came to be lost.

Mr. Boyd-Carpenter

Before voting it.

9.0 p.m.

Mr. Silverman

It will not do to say "Before voting it," because whether we can have it before or after voting it, I hope we will get it somewhere. However, it does not help the right hon. Gentleman not to give him his £20 million. It has to be found somewhere, and it seems to me to be the height of irresponsibility to say "This money has been lost but the Committee are not prepared to make any proposal whatever as to how the debt incurred shall be discharged." That seems quite wrong, and I hope the Committee will not accept the Amendment. If there were another Amendment dealing with the Polish Land Forces we might take a very different view.

Mr. David Renton (Huntingdon)

The hon. Member for Nelson and Colne (Mr. S. Silverman) has had very much longer experience and greater knowledge of the Rules of the Committee than myself. But I feel I must take him up on one point. Surely, the purpose of our going into Committee of Supply is so that we may be given reasons by the Government why they wish the Supplementary Estimates to be voted out of the taxpayer's pocket?

Mr. Silverman

Certainly.

Mr. Renton

If that be the case—and the hon. Member for Nelson and Colne appears to agree it is so—if we are not convinced by the reasons which have been given by the Government, then we do not vote the Supplementary Estimate which is being asked for. For that reason I should think the hon. Member ought to be in agreement with the Amendment moved by my hon. Friend the Member for Westbury (Mr. Grimston).

Mr. Silverman

Nevertheless, I think we have to act responsibly. We may be completely dissatisfied—and many of us are—as to how this £20 million came to be lost. But that does not absolve us from the responsibility of considering how the loss is to be dealt with now. The money has got to be and will be paid. When I say that, I am not suggesting that there ought not to be the fullest inquiry into how this came about; I agree there should be. But I think it would be wholly irresponsible for the Committee to decide that the bill should not be paid. The other paint is a wholly different one.

Mr. Rentonrose—

The Temporary Chairman

We cannot have argument across the Chamber like this. It is quite out of Order.

Mr. Renton

With respect, Sir Robert, I gave way to the hon. Member. I will just conclude by saying this. The hon. Member seems to be suggesting that the Government have merely to say that there has been a loss, and the Government should then be given the sum they ask for. I submit that should not be so; and that there should be a satisfactory explanation.

Mr. Grimston

I am seized of the point which has been made by the hon. Member for Nelson and Colne (Mr. S. Silverman), and we are in a difficulty. But we have not had a satisfactory reply on this matter; there has been no promise of any inquiry. However, in order to put the matter right, I think the only thing that it is possible to do is, if you and the Committee will allow me, Sir Robert, to withdraw the Amendment for the reduction, and to give notice that we shall raise the matter upon the Report stage of these Estimates.

Amendment, by leave, withdrawn.