GRANTHAM FACTORIES (ALLOCATION)

HC Deb 30 July 1947 vol 441 cc525-83

7.5. p.m.

Mr. Oliver Lyttelton (Aldershot)

The Committee will remember that when I requested the President of the Board of Trade to have an independent inquiry into the matter of the allocation of the Grantham factories, he refused. We on this side of the Committee have, therefore, taken this opportunity to raise the matter, and I shall confine myself entirely to this subject. We propose to ask the right hon. and learned Gentleman, if he does us the courtesy of being present—and I must say, in passing, that this being a matter which concerns the administration of his Department, of which he has had plenty of notice, and I having received no notice from him, I think it is treating the Committee with great discourtesy not to be present—and in his absence I shall ask the hon. Gentleman, who probably has not got the power to do so, which makes it difficult for the Committee, to consent to a Select Committe being set up in this matter. If he does so, it will not be necessary for me to ask my hon. Friends to divide the Committee, but if he does not consent, we shall move a reduction in the Board of Trade Vote. I hope that nothing I have to say will impart the slightest prejudice into the consideration by the Committee of the facts which I feel it necessary to recite.

In order to understand the apprehension which Members on this side of the Committee, and indeed on the other side also, feel about the allocation of these Grantham factories in this year, it is necessary to go into the history of these transactions in some detail. I must begin at the beginning. The three factories in question have an area of about 250,000 square feet, so that we are not dealing with a very large proposition. During the war Factories 3 and 4, which I am chiefly talking about, were engaged with Factories 1 and 2, in the manufacture of Hispano-Suiza guns. Factories 3 and 4 had been built by the Government and leased to British M.A.R.C., which is the British Manufacture and Research Company. Subsequently Factory 2, which is not of such importance, was transferred to the Government.

When the Public Accounts Committee investigated certain matters in connection with production from Grantham, their inquiries were addressed to British M.A.R.C., of which the hon. Member for Grantham (Mr. Kendall) was at the time the managing director. Subsequent to that date, a company called Grantham Productions Limited, which had initially a small capital of, I think, £1,000, came into the picture. As far as I understand it, this company in some way or other entered into contracts with the Government for the supply of certain guns, not the original production, though in fact at that time it was British M.A.R.C., not Grantham Productions, which was the lessee of these two factories. The contractual relations between Grantham Productions, on the one hand, and British M.A.R.C. on the other, call for some investigation, because the facts cannot be ascertained unless access is had to the books of both companies, or at any rate of one of them. That is only preliminary.

After the end of the European war, proposals were made by Grantham Productions to the Board of Trade under which these factories were to be allocated, in peacetime, to Grantham Productions Limited for the manufacture of two products, first, a "people's car" which was intended to sell for £100, and secondly, agricultural tractors. At the time when this application was originally made, the present Chancellor of the Exchequer was President of the Board of Trade. After going carefully into the circumstances, he turned down the application of Grantham Productions, and allocated the premises to another company called Aveling-Barford, which had been established for over a hundred years in Grantham. They have a well-known name for road making machinery, such as steam rollers. They had a new development at the end of the war for small earth-shifting machinery.

The present Chancellor of the Exchequer, in his capacity at that time of President of the Board of Trade, considered that neither the people's car nor the tractor were what is called production propositions. He regarded them as, mere drawing board projects and, from my own knowledge, it was mainly on this ground that he allocated the factories to the rival claimants and not to Grantham Productions. If these two projects were in an advanced state of development, as was claimed by the company, some investigations are necessary about how a company which was entirely engaged upon Government contracts had been able to develop two such ambitious projects during the war and have them ready for exploitation on VE-Day.

Just about this time the Labour Ministers left the Coalition Government and the so-called Caretaker Government came into office. In that Government, I was President of the Board of Trade and Minister of Production. I combined both offices. When I got back to the Department over which I had previously presided in 1940, I was immediately given the facts about this case. I found that my predecessor the present Chancellor of the Exchequer had in fact only reached a decision the day before I returned to the Board of Trade. Therefore, I determined that I must make up my own mind, because the decision was so recent, and not shelter behind his. I would like to assure the Committee that my reason for re-opening the case was that I felt that the hon. Member for Grantham, who had been engaged successfully in the manufacture of Hispano-Suiza guns during the war, was entitled to more consideration in regard to these factories than any other firm who had not been manufacturing during the war.

I had a first interview with the hon. Gentleman and I so informed him. I may say that I considered the reasons why the present Chancellor of the Exchequer had turned down the application to be quite sufficient in themselves. Whether a particular product is a production proposition or a drawing board project is, after all, a matter of opinion which only events can prove to be right or wrong. I emphasise that I considered his reasons by themselves were enough. However, I investigated the whole matter in very great detail and I asked the hon. Member for Grantham if he could call upon me at the Board of Trade to discuss some other aspects of this proposition. I asked him in particular how the proposition was to be financed. Clearly, the Government in allocating a Government factory to an industrial concern must be satisfied that the proposed tenant has sufficient money behind him to develop projects such as this and to carry them through their various stages until they are proved and become commercial propositions.

The hon. Member for Grantham then informed me regarding finance that he himself was going to put up £70,000, that two of his friends, whom I am not going to name, because I do not know whether the statement was made with their authority—I am not making any criticism; I am not going to name them—were going to put up £10,000 each. The hon. Member for Grantham also said that the workpeople in the factory were going to put up £30,000 to £35,000, and the balance of the finance required would be by prepayment by the agents to whom the sale of the people's car was to be entrusted. I judged from this statement that the total finance proposed was to be of the order of £150,000 to £175,000, and that some of this finance was very far from firm. I was also apprehensive about the prepayments by the agents who were to sell the cars. I believe that in the United States it is a common practice for agents to make these prepayments and, as far as I know, they only make them against a prototype or a model which they can see, or else they make the prepayment with one, two or three very great automobile manufacturers behind the product. I did not think at the time it was suggested that finance should come from prepayment that either of those conditions really existed. There was no prototype to be seen and there was not an engineering firm, of great prestige in this particular field behind the projects.

However, I came to the conclusion, first, that the total finances which were to be provided for these two very ambitious projects were totally inadequate in amount; and, secondly, that even if that were not so, the methods by which these were to be obtained were not sound, or at least they were not firm enough. Therefore, after my own investigation, I confirmed the decision of the present Chancellor of the Exchequer, and I allocated the factories to the same firm to which he had allocated them, namely, Aveling-Barford. I trust the Committee will believe me when I say that I came to this decision very reluctantly. I hope also that they will acquit me of any smugness or complacency in making this statement. I am entitled to no praise whatever for making this decision. I am not saying, "I told you so" or anything of the kind. Any novice in industrial matters would have reached the same conclusion.

I would remind the Committee that some motor manufacturers in this country would regard £2,500,000 or £3 million as insufficient finance for a project of this kind, and others would put it at an even higher figure. To proceed with £175,000 of finance, which was only at the best a conditional promise, was to court certain failure. I came to the conclusion very reluctantly. I would remind the Committee that I was also Minister of Production and part of my duties were to try to stimulate production wherever I thought it could properly be done, and that this edifice was erected on insecure and insufficient foundations.

In this rather tangled story, another event occurred—agreeable to hon. Members opposite—when the Caretaker Government failed. The investigation which I have made into this project had, as sometimes happens in Government Departments, taken some time. It so happened that I reached the conclusion which I have described to the Committee only a few days before the fall of the Caretaker Government. I was succeeded by the right hon. and learned Gentleman the present President of the Board of Trade who, unfortunately, is absent. I apprised him of my decision in these matters in a memorandum. I have some reason to believe that the right hon. and learned Gentleman at first confirmed the decision of his two predecessors but subsequently, acting from motives of which, naturally, I had no knowledge, he consented to set up a Committee of Inquiry under the chairmanship of the hon. Gentleman the Member for Stoke (Mr. Ellis Smith). After this inquiry the right hon. and learned Gentleman proceeded to reverse the decision of his two predecessors—one, I would remind the Committee, a Labour Minister, and the other a Conservative Minister. He cancelled the promise of allocation which had been made to Aveling-Barford and allocated the factories to Grantham Productions.

In the case of the finance for this project, it was found in a different manner from that which the hon. Gentleman had contemplated originally. A sum of £265,000 was found. His Highness the Jam Sahib of Nawanagar, according to my examination of the registry, provided £245,000, and the hon. Member for Grantham provided £20,000. I do not know whether the latter holding was a beneficial holding. The agreement was that this £265,000 was to be put up in five per cent. non-cumulative non-participating preference shares. I understand from a statement which the Jam Sahib made at the time that, in return for this subscription of £245,000, he received 25 per cent., or 2,500 shares, in Grantham Productions. In other words, he risked over 90 per cent. of the money sunk in the project, and apart from the five per cent. which was non-cumulative be became entitled to only 25 per cent. of the profits or equity of the main company. It is not for me to comment upon these terms except to say that they were generous to the point of being quixotic.

No part of the failure of the company can be attributed in any way to the onerous terms which were imposed upon it by those who financed it. That sum of money, as I have said, is getting on for twice the amount which the hon. Member for Grantham had originally told me he contemplated raising for his project. The production of these two ambitious projects, even with this greater finance, never had a chance of success, and the company, in its new form and possessed of this new money, had a life of just over a year and went into liquidation on 15th November, 1946, and had unsecured creditors at that time of £247,116. Amongst the creditors were the Inland Revenue for P.A.Y.E. to the amount of £25,000, which appears to me to be quite out of line with the wages bill for which the company was liable at the time. This is a matter which alone requires to be investigated, because it is not the custom, so far as I know, for the Inland Revenue to finance industry by this means, but this was, apparently, an ex- ception. This was in addition to £25,000 to British M.A.R.C. Further, the hon. Member for Grantham paid out a liability which the company had incurred towards the hospital.

Had the company gone into compulsory liquidation, there would have been a different turn and its affairs would have been in the hands of the Official Receiver, but, actually, the company went into voluntary liquidation. During its life of slightly over a year, its total deficiency, according to the statement of affairs on 15th November, amounted to £445,000, or, in other words, the capital of £275,000—£265,000 in preference shares and £10,000 in ordinary shares—had been lost, and, in addition, there was a balance of £170,000 due to creditors, against which there were no assets. There were also liabilities to a number of creditors in respect of contract cancellation orders, which the directors of the company at that date estimated would not be less than £120,000.

When Granthams Productions, Ltd., went into voluntary liquidation one would have expected the Board of Trade to have done one of two things—either to have approached the previous applicants or to have sought some other substantial concern to take over the factory. They did neither. The Board of Trade never approached the previous unsuccessful applicants, Messrs. Aveling-Barford, and they received no reply to several letters sent to the Department until Mr. Edward Barford was asked to see a secretary on 5th June, 1947. At that time, he was informed by the second secretary that the factory would not be allocated to him, but to a financial syndicate headed by Mr. F. S. Cotton.

At this point, I must intervene with some comments. It is quite possible, as we all know, to make mistakes in these matters, and it is even possible to allow one's sympathies, and I share many of them, to turn one's judgment, and this must have been the fact over the original allocation to Grantham Productions. Any cursory examination by a competent businessman should have convinced the President of the Board of Trade that the finance on which these ambitious projects were to be launched was, to say the least of it, flimsy and inadequate, but it would also appear to the ordinary commonsense man that, having made such a mistake once, one would not enter into the same mistake again, once it had been proved conclusively by the failure of the company itself after 12 months or little more and without any substantial production having been made.

The ordinary commonsense man would have been at great pains to prevent a similar mistake happening again, and I do not think it possible to suppose that the second allocation was made from carelessness or ignorance of what had gone on before. Grave as are the responsibilities of the President of the Board of Trade in regard to the first allocation, they become much heavier and much graver over the second. I would not, of course, dream of imputing anything but the highest motives and disinterestedness to the right hon. and learned Gentleman, however much I differ from him politically, but I must say that this reallocation calls into question the trustworthiness of the whole Administration and particularly that part of it for which he is responsible. The main reason why I am anxious that the Parliamentary Secretary will give us, at least, an assurance that he will consent to a Select Committee being set up, is because I think that the right hon. and learned Gentleman has been let down, and I am very suspicious about the allocation of these factories, which, to say the least, requires independent investigation.

To resume the narrative, the re-allocation was made to a financial syndicate headed by Mr. F. S. Cotton. Let me at this point say that I think it very doubtful whether Government factories should ever be allocated to financial syndicates, and I think they never should be allocated where there is a reputable industrial firm of long experience who are applicants at the same time. In this particular instance, there was another such firm in Grantham, but I think the idea was that the factory should be allocated to an industrial concern. I think that the greatest care is necessary to ensure that a financial syndicate is not engaged in trying to make money by turning over the assets and reselling. At least, they should have at their disposal all the finance necessary, not only to buy the assets and to finance production, but to carry the project through to a successful issue.

By this time, the project of the people's car had been dropped, and, instead, the production contemplated at Grantham was the manufacture of agricultural tractors. The established manufacturers of agricultural tractors are now very well known, and some of them have many years of experience behind them in this type of manufacture. I have it on the authority of more than one that they could increase the output of tractors by up to 50 per cent. if they could obtain a greater quantity of steel. Therefore, it appears inexcusable to allot capacity to a financial syndicate, who, I suspect, and I cannot say more than that, had no experience in this type of production, and who were completely untried in this field, but, even if they had had the experience and had been successful, as the Board of Trade is no doubt aware, the only result would have been to cause a further shortage of steel for the established manufacturers. When the present capacity for making tractors is unfilled, the creation of further capacity with the same object appears, on the surface, to be undesirable. I have heard some suggestion that the tractors were to be made of cast iron, but iron castings constitute one of the bottlenecks of industry, and, at any rate, the tractors would probably have been out of date before they were designed.

It appears that Mr. F. S. Cotton had been declared bankrupt before the war, and that he had paid a last amount of 2s. 4d. in the £, making a total composition of 12S. in May, 1947, and that he had been, promised the allocation of these Grantham factories in June, 1947. I would like to say quite frankly that I consider it a very distasteful task to have to bring out circumstances of this description, but they are not intended, in any way, to cast aspersions on Mr. Cotton, who suffered these misfortunes. I do not know the reasons which led to them. I make no charges against the good intentions of Mr. Cotton; I do not know what they were. I confine myself to the simple proposition that a syndicate headed by a gentleman who had only the previous month paid the last composition of 2s. 4d. in the £ to his creditors, is an unsuitable type of syndicate, whoever the other members of it might be, to which to allot Government property.

I would remind the Committee that Government property is certainly the lesser of the interests involved. There are also the interests of the workpeople who had already suffered very seriously from the brief life of the previous venture. If they were to be collected and used in Grantham for the purpose of this production, surely, after the experience which the Board of Trade had had, most careful inquiry was necessary to ensure that the new company was one of substance, and had at its disposal all the necessary finance. I cannot believe that a syndicate headed by this gentleman, who was described as a West End financier, and with this particular record, fulfils those necessary conditions.

At the time that the allocation was made, the hon. Member for Grantham made it known through a paper in Grantham, which he himself controls, that the Cotton syndicate was, in reality, the hon. Member himself, and his interests in another form. I do not know whether the Board of Trade repudiate this suggestion or whether they support it. Be that as it may, running through all these transactions, there appears to be a positive intention, in the face of all the facts or experiences, by the Board of Trade to allot these factories to a concern in which the hon. Member for Grantham was engaged or had the controlling interest, irrespective of reason and irrespective of the distress brought about by their first allocation.

The Cotton syndicate could not find the necessary money with which to pay the purchase price of the assets which had been agreed with the liquidators. Much less could they find the finance necessary for production. I want to be perfectly fair, and it is, perhaps, fair to say that the publicity which surrounded these transactions, and which I regret, but which I cannot see could have been avoided, may actually have frightened off those who were originally prepared to back Mr. Cotton. But the fact remains that, so unstable was the backing of the financial syndicate, the moment the circumstances surrounding these two allocations were ventilated in the Press, the syndicate, so far from having the necessary money, were unable to find even the £110,000, which was the agreed figure at which the assets could be purchased.

It only became apparent that they could not pay after several delays granted, for reasons which I do not know, by the Board of Trade, and, in fact, to all intents and purposes, the activities of those factories were suspended while the Board of Trade tried to bolster up the syndicate. The blunders of the Government have sterilised a possible source of industry for 18 months, and this sort of thing sounds ill to those who are being exhorted about the urgency for greater production in the country. The right hon. and learned Gentleman, when questioned by me, refused to have an independent inquiry made into the circumstances. I must say that, at that time, I thought he might be doing that because he thought that he would cause some embarrassment to the hon. Member for Grantham. Such an attitude I should resent as being neither fair to the hon. Member nor to the House; nor did it pay any regard to the egregious blunders which the Government had already made in this direction. But if his refusal of an inquiry had been made because of a wish not to cause embarrassment to the hon. Member for Grantham, it was at least understandable, even if it was wrong. But now, I see, the hon. Member for Grantham has put his name to the Motion which I put on the Paper calling for the appointment of a Select Committee. It is quite clear from that—and I appreciate his motives—that he, too, wishes the whole of these circumstances to be fully investigated. Who, then, are the Government sheltering? What reason have they for denying an inquiry?

I can offer certain explanations, but they would be mere surmise. One explanation could be that the President of the Board of Trade has been badly let down somewhere, and finds himself in the position of having to defend actions which are indefensible, and that he wishes to protect those who have been guilty of giving him wrong advice. But, as I say, that is mere surmise. I suggest to the right hon. and learned Gentleman, through the Parliamentary Secretary—I cannot suggest it to him personally because he is not here—that it is in the interest, not only of the administration and its trustworthiness, but in the interest of the good name of the House of Commons, and in the interest of the good faith of the Department and the Government that he should now accede to the request which I make, and should set up a Select Committee to inquire into the matter, and to publish to the last detail the circumstances surround- ing the original allocation, the failure of the company after 12 months, and the re-allocation to a financial syndicate, headed by a man who could only pay the last composition to his creditors the month before, and the subsequent and inevitable failure of that syndicate to complete the deal. If he does not agree to the appointment of a Select Committee, everyone will have the impression that something reprehensible has been going on which the Government do not wish to bring to the light of day. I think it would be a great mistake to think that anything which was disclosed by the Select Committee would do more harm than leaving the matter unexplained and unresolved, thus giving to the ordinary man suspicions which nothing but the full disclosure of the facts can possibly allay.

7.37 p.m.

Mr. Quintin Hogg (Oxford)

On a point of Order. I am going to ask you, Mr. Beaumont, whether you will accept a Motion to report Progress and ask leave to sit again in the following circumstances? My right hon. Friend has just made a series of statements to the Committee which, I think, the Committee will probably agree raise a prima facie case for an inquiry. The statements relate in detail to matters which took place before the hon. Gentleman the Parliamentary Secretary was appointed to his present office, and which call for some explanation from the right hon. and learned Gentleman the President of the Board of Trade. Moreover, my right hon. Friend has asked the Government to reconsider their refusal to have an inquiry. In my submission, the continuance of this Debate in the absence of the right hon. and learned Gentleman, for whatever reason—not knowing the reasons, I can, of course, make no complaint—is nothing but a mockery, and, therefore, we must ask leave to sit again when the right hon. and learned Gentleman finds it possible to be among us.

The Deputy-Chairman (Mr. Hubert Beaumont)

I cannot accept the hon. Gentleman's Motion, because a representative of the Department concerned is present to reply to the Debate.

Earl Winterton (Horsham)

On that point of Order, Mr. Beaumont, is it not usual, when the personal position of a Minister is under discussion, for that Minister to be present? May I respectfully suggest that the Ruling which you have just given—although I am not quarrelling with it—may have a most calamitous result, because it means that any Minister whose personal conduct is under review could, without explanation, absent himself from this Chamber.

Mr. Kendall (Grantham)

Further to that point of Order. Would it not have been more proper, Mr. Beaumont, to have raised the question of this Motion before the Debate started, and not after the speech by the right hon. Member for Aldershot (Mr. Lyttelton)? It seems to me to be unfair to raise the point now. Surely, on seeing that the right hon. and learned Gentleman the President of the Board of Trade was absent from the Front Bench, the objection to his absence could have been raised before, and not subsequent to, the speech of the right hon. Member for Aldershot.

The Deputy-Chairman

I will first deal with the point of Order raised by the noble Lord. I cannot determine how far the right hon. and learned Gentleman the President of the Board of Trade was aware that his presence would be necessary. It is purely for the Chair to decide whether a Debate can continue if there is present an official representative of the Department concerned who can reply. In those circumstances, the Debate should continue.

Mr. Hogg

Further to the point of Order raised by the hon. Member for Grantham (Mr. Kendall). In the first place, may I say that, of course, I could not raise the matter before the Debate commenced because I had naturally assumed, until a late stage in the speech of my right hon. Friend the Member for Aldershot (Mr. Lyttelton), that the President of the Board of Trade would have taken the trouble to come here. Further, I had no prior knowledge of what my right hon. Friend was going to say. Therefore, I waited to see whether the charges against the President of the Board of Trade were of such a nature that, in my judgment, he ought to answer them personally, and, in my submission to you, Mr. Beaumont, I took the only possible course of waiting until my right hon. Friend concluded his speech and until one had some opportunity of seeing what the situation was, before raising a point of Order. I submit that I should have acted prematurely and wrongly had I taken any other course.

The Deputy-Chairman

I appreciate the point of view expressed by the hon. Member for Oxford (Mr. Hogg). The position is this: a statement has been made by the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton), to which presumably there will be a reply, not necessarily, from any particular individual Minister but from a Minister representing the Department concerned. So far as I know, whether the right hon. and learned Gentleman the President of the Board of Trade is present or not, a reply will still be made. In those circumstances, the Debate should now continue.

7.42 p.m.

Lieut.-Colonel Bromley-Davenport (Knutsford)

In whatever section of the Committee hon. Members may sit, they cannot fail to be impressed and, indeed, profoundly shocked by the facts disclosed by my right hon. Friend the Member for Aldershot (Mr. Lyttelton). The whole story reads rather like some mysterious novel, with the Board of Trade, British M.A.R.C., Grantham Productions, Mr. F. S. Cotton and last, but not least, the hon. Member for Grantham (Mr. Kendall) playing the principal parts. What lies behind this mysterious and unhappy sequence of events which has led to two years' loss of production, an unfortunate Indian Maharajah losing about £250,000, the Inland Revenue being owed some £25,000 in unpaid taxes, and a lot of unhappy people being thrown out of work? I want to read an extract from a statement issued to the "Grantham Journal" by the hon. Member for Grantham on 17th June, 1945: We have an outstanding record of productive efficiency by the managers of these factories during the war. Nine months ago we made application for them to be allocated to us for postwar projects. These included a cheap motor car and a light tractor, and a number of other very interesting engineering products. They are all tested and proved to be first-class. We have orders which run into many thousands of them all over the world. I understand that at that time the peoples' car project was intended to produce 50,000 cars and tractors a year, that production was to start within six weeks from V.E. Day and that the car was to sell for about £100. The question I want to ask is, whether the right hon. Gentleman the President of the Board of Trade took steps to ascertain how a company with a capital of £2 in 1939, increased to £10,000 in 1945, could have incurred the vast development cost of the Kendall-Beaumont car and the Kendall tractor.

Mr. Tiffany (Peterborough)

On a point of Order. Would the hon. and gallant Member kindly explain whether he is still reading the statement or making his speech?

The Deputy Chairman

That is not a point of Order.

Lieut.-Colonel Bromley-Davenport

The hon. Gentleman is trying to make it difficult for me. That is the usual practice of some hon. Members. It is understood that the development cost of this car must have amounted to far more than £10,000, and possibly in the neighbourhood of £100,000. If so, how was it done? Where did all this money come from, in a company with only £10,000 capital? It could scarcely have been made during the war, with crippling taxation and with war profiteering quite properly made impossible. Surely, any reasonable man must know that for anybody to be able to produce 50,000 cars and tractors a year, starting within six weeks from V.E. Day or thereabouts, vast development costs must have been obtained and expended prior to 1945. If so, when and where did development take place and how was it paid? Did the development cost of these tractors as well as the "people's car" take place on British M.A.R.C. premises and by individuals on a British M.A.R.C. pay roll? But we want to know and the public want to know where this vast development cost came from, and when and where did development take place? I suggest that the only way in which a full and proper explanation can be found to all these questions put by my hon. Friends is by a Select Committee with the right to delve into all the evidence and, above all, to examine the books.

As regard the 1945 allocation, what did the right hon. and learned Gentleman the President of the Board of Trade consider to be adequate working capital before allocating these factories to Grantham Productions? How much capital did this firm actually have at the time of the 1945 allocation? In this connection, I have heard it said that the late Mr. Henry Ford, the late Lord Austin, Lord Nuffield and the Rootes Brothers all rolled into one, could not begin to produce 50,000 cars and tractors a year, without a capital possibly of at least £5 million. A capital of £10,000 is not sufficient for the mass production of people's roller skates or the rotating tooth brushes so admired by the hon. Member for Loughborough (Mr. Follick), let alone a people's car.

With regard to the 1947 allocation, I would like to quote from "The Times" of 15th July, 1947. The great criticism on the second allocation is whether it was proper to grant a lease of Government factories to tenants whose resources were unknown, who had no actual experience of manufacturing the intended product"— and, as they say elsewhere in the article— who were closely associated with the previous tenant now in liquidation. I understand that Mr. F. S. Cotton has now failed in his endeavours to dispose of the assets of Grantham Productions at an immense profit. We know that no more Indian gentlemen have come forward, and I must say I cannot blame them. Once bitten, twice shy. The allocation has now, therefore, been withdrawn by the Government, but the question I want to ask is: Why were the Grantham factories ever allocated to the Cotton group?

I would also like to know what is the result of the 1945 and 1947 allocations of the Grantham factories by the right hon. and learned Gentleman the President of the Board of Trade. It is apparent to everybody, whatever their political party, that we are once more back where we first started in 1945. An unfortunate Indian gentleman, as I say, has lost about £250,000; the Treasury, I understand, are still owed some £25,000 in taxes which have not been paid; the production of goods so badly needed for export has been held up for two years, and a lot of people have been thrown out of work. In consequence, therefore, everyone suffers.

If this is an example of the way the Government conduct the business of this country no wonder our people suffer. No wonder we are up against it. No wonder we must work or want. The Government, of course, know tonight that they can, with their huge majority, do anything they like. If they are nervous of the truth, if they are anxious about disclosures resulting from inquiry, they can make vague statements and draw red herrings across the trail by talking of the past iniquities of their political opponents and 20 years of Tory misrule, and that sort of poppycock. But that will deceive no one. They can order their supporters to troop obediently through the Division Lobbies en masse chattering with exultation at yet another victory. But they will know, we shall know, and the people of this country will know that an inquiry will not have been held because the Government are anxious about any possible disclosures that might be revealed by a Select Committee. If there is nothing to hide, let there be a court of inquiry. The Government have nothing to lose. But if there is not an inquiry, then it may well be that the Government are anxious of any possible disclosures and have a good deal to lose. Therefore, we ask the Government to appoint a Select Committee, and if they refuse, whatever they may say, the people of this country will know the reason why.

7.52 p.m.

Sir John Mellor (Sutton Coldfield)

I should like to assume that the President of the Board of Trade in his unfortunate absence has authorised his Parliamentary Secretary, after hearing this Debate, in his discretion to agree to an appointment of a Select Committee. I do not think that that is necessarily a very optimistic assumption, because it is always the way with the President of the Board of Trade to entrust a very great measure of authority to his Parliamentary Secretaries. He did, indeed, entrust the decision of the allocation of these factories to his then Parliamentary Secretary, the hon. Member for Stoke (Mr. Ellis Smith), and it is on the correspondence that he made it quite clear that, to whatever decision the hon. Member for Stoke came, he would abide by that decision. In answer to a Question which I asked last December concerning the original allocation to Grantham Productions, Limited, the President of the Board of Trade referred to evidence of improved financial and productive resources. That evidence very much impressed the hon. Member for Stoke. I am rather wondering what that evidence included, because in less than 18 months from that date Grantham Productions Limited, had gone into liquidation.

Mr. Gallacher (Fife, West)

Will the hon. Member excuse me? He is talking of the hon. Member for Stoke (Mr. Ellis Smith). Will he make it clear that even if the hon. Member for Stoke was mistaken, the hon. Member for Stoke was scrupulously honest in anything he said?

Sir J. Mellor

I really think that there is nothing that I have said that could possibly have suggested anything but complete confidence in the integrity of the hon. Member for Stoke. [HON. MEMBERS: "Hear, hear."] The question of his judgment is an entirely different matter. I was suggesting that he had been very much misled by the evidence put before him as to what was described as improved financial and productive resources, because, as I pointed out, within less than 18 months the company which was alleged to have those resources had gone into liquidation, and it had gone into liquidation causing a good deal of distress, not only to people in Grantham, but to people up and down the country.

My right hon. Friend the Member for Aldershot (Mr. Lyttelton) referred to the proposals in the financing of the production of the "people's car" as including prepayments from the distributors. But, unfortunately, those distribtuors and their customers who did make such prepayments are still out of their money. There is a sum, I understand, of £55,000 held in a banking account, but it has not so far been considered possible by the liquidators to return that money to the depositors, and that being so, I think it is very doubtful whether they will get it back at all. It may be they will only be able to rank as ordinary creditors claiming pari passu with the rest of the unsecured creditors to share in whatever assets there may be to distribute.

But this has caused a good deal of distress, and I would like to read one letter which I received from quite a humble person who is still out of his money. He wrote: We people who have put down our deposit money have not heard one word officially as to what is to become of our money, whether we shall ultimately get a car, or whether our money is lost. I have written to Mr. D. Kendall twice, enclosing stamped and addressed envelopes for a reply, but have had no answer. I have telephoned Grantham Factory and the only thing they could tell me was it was hoped things would straighten themselves out. Nothing more. There must be hundreds of working men like myself who desire to run a small, cheap car that we could manage to buy who deposited our money in good faith, and we can ill afford to lose £20. I think we are entitled by this time to know something of what is going to happen. After the company went into liquidation six months passed. I think it singularly strange that immediately the company went into liquidation the Board of Trade did not publish a notice such as they published about a week ago saying that these factories were now available for re-allocation. I cannot understand how they hung on, and that is, I feel, what we want particularly to have explained by the Parliamentary Secretary when he replies—why they took no action, but just waited upon events such as might develop in connection with Grantham Productions Limited in liquidation. Then Mr. Cotton came upon the scene, and we were informed by the Parliamentary Secretary on 17th June as follows: The group in question have acquired the assets of Grantham Productions Limited, from the liquidators with the view to continuing the production of the tractors."—[OFFICIAL REPORT, 17th June, 1947; Vol. 438, c. 204.] Was any condition made by the Board of Trade that, if the factories were allocated to this group, they would produce tractors? I do not think so, because we know that, within a few days of their acquiring the allocation of the factories, Mr. Cotton, on behalf of this group, was hawking the assets of Grantham Productions Limited, which they had acquired, round the City, hoping to dispose of them at a very substantial profit. At least the Board of Trade must have recognised that that was a very grave breach of faith. This group came to the Board of Trade saying, "We have acquired" the assets of Grantham Productions Limited in liquidation." That was not quite true. But, at least, they were committed to purchase them. On the strength of that, and because they assured the Board of Trade that they intended to carry on the production of tractors, they got the allocation of the factories.

Well, in no time they were trying to dispose of the assets at an enormous profit. Surely, that having been done, one would have thought that the Board of Trade would have broken off all negotiation with the group and said, "In no circumstances shall this group have the allocation of these factories." We also asked the Parliamentary Secretary what experience the Cotton group had of the production of tractors. Upon that point, however, he was entirely silent, and it is quite obvious that they had no experience whatsoever which would assist towards the production of tractors.

In the Debate on 26th June, the Parliamentary Secretary said, with regard to their financial resources: … we ascertained from the group's bankers … that Mr. Cotton and his group were well able to provide out of their existing resources the necessary capital both for the purchase and for the running of the business. It may be that there was money in the bank to an impressive extent. I do not know whether that was true or not. But the fact that there was money in the bank does not necessarily mean that the proprietors of that money will be true to their obligations, and apparently the Board of Trade took no steps to discover whether these people could be relied upon or not. Indeed, a little later in the same speech the Parliamentary Secretary said, with reference to the acquisition of the assets of Grantham Productions Limited, by the Cotton group: A binding agreement had been reached, and only afterwards was it decided to continue the allocation in favour of the group."—[OFFICIAL REPORT, 26th June, 1947; Vol. 439. c. 807–9.] A binding agreement had been reached by this group, and apparently, according to the information at the disposal of the Board of Trade, they had the money with which to implement that agreement. Except for Mr. Cotton they all preferred to remain anonymous, and the Board of Trade has protected them in that anonymity. Then, as soon as there was publicity, which made them feel a little nervous of their position, they fled from the field leaving only their broken undertakings behind them. Those are the people with whom the Board of Trade have been in close relationship, without taking the slightest trouble to find out whether they were reliable.

There is one other question I would particularly like to ask. It was stated on 20th June in the newspaper controlled by the hon. Member for Grantham, the "Grantham Guardian": Supplies of raw material have been assured by the only authority in a position to assure them. I ask the Parliamentary Secretary whether that is a correct statement. If so, who gave that assurance, and what does it involve? Was any priority promised to the Cotton group if they went ahead with the production of tractors? Were they given any undertaking which would put them in a more favourable position than their competitors? This is a very important aspect of the matter, because there is only a sufficient amount of steel available in the country—I will not enter into the question whether cast iron is of any use in the production of tractors—for the production of a limited amount of tractors. Therefore, it is of supreme importance that such steel as is available for this purpose should be used only by firms of considerable experience and productive and financial resources, so that we can be quite sure that the country gets the best possible results.

This has been a long chapter of a most deplorable waste of time, money and productive resources. These factories could have been put to some useful purpose; two years have elapsed since they were originally allocated to Grantham Productions Limited, and they are still not allocated in firm hands—two years' wastage of valuable factory space. I think the President of the Board of Trade has a great deal for which to answer, and I only hope that the Parliamentary Secretary will be in a position to answer for him. The least we should be granted is our request for a Select Committee to investigate the whole matter.

8.7 p.m.

Sir Arnold Gridley (Stockport)

In intervening in this Debate for a short time I would like the Committee to understand at the outset that I have no interest whatever in either of the parties who are concerned in this matter. I know nothing about the alternative firm who were anxious to secure these premises. Also, I know absolutely nothing about the business of the hon. Member for Grantham (Mr. Kendall), but I have every reason to believe that he is a most capable engineer, and no doubt we shall learn from him, in the course of the Debate, the story that he has to tell.

Few hon. Members in this Committee have heard the story unfolded to us by my right hon. Friend the Member for Aldershot (Mr. Lyttelton), before today. All we have heard up to now have been Questions and answers in the House, and a certain amount of newspaper comment upon them. But I think we would all be agreed upon this—indeed I should be extremely surprised if any hon. Member in any quarter of the Committee would dispute it—that we have heard from my right hon. Friend a case to which there must be an answer. For my part, I propose to suspend judgment—because I always like to hear both sides of a case—until we have heard what the hon. Member for Grantham may have to say, and what the Parliamentary Secretary may say in reply.

What concerns me this evening is that, in this Committee I speak in one sense or another, as I think everybody knows, as representing industry, and those of us who are concerned in industry are frequently attacked on the ground that we mismanage this, or misconduct that, or do not handle our employees properly, or that we are engaged in some doubtful transaction, and so on. I am very jealous for the reputation of industrialists, who include both good and not so good men—as is the case in all activities in life. Here, for the first time for some years in my Parliamentary experience, we have a Government Department which, rightly or wrongly—and I say "rightly or wrongly" advisedly up to now—is being charged with the very careless and incompetent handling of this matter. As I say, there may be a very good reply to it, and we would all be wise to wait until we have heard both sides of the case.

There are one or two observations I think it right to make to the Committee, which are based on my fairly long experience in the conduct of productive industry. I want to put this question very directly to the Parliamentary Secretary. I do not know whether Members are aware—a good many may be—that if you wish to develop new prototypes in these times, as some of my works are doing at the moment, and the materials out of which they are to be made are, or may be, in short supply, you have to apply either to the Board of Trade or to the Ministry of Supply for licence to manufacture. If there is a shortage of materials, no licence is granted until the prototypes have been produced and the Government Department concerned are satisfied that they will be advantageous to the national interest. If materials or allocation of materials can be provided for production, a licence to manufacture some limited quantity may be granted. I have been through this experience myself on three or four occasions during the last six months, and hon. Members on all sides can take it from me that that is the position. I do not think anyone representing a Government Department will dispute it for one moment.

That being so, this question seems to arise. The people who wanted to have these factories, with whom the Board of Trade apparently negotiated so long were to manufacture tractors and a "people's car." Therefore, were prototypes of these products ever produced, and were the Government Department concerned satisfied that they were what the nation wanted and must have, even in these times of shortage of steel and so on? If they were approved, were there sufficient materials available to put them into production in factories to enable them to be manufactured in sufficient quantities to cover overhead charges and be a really commercial proposition? I think that these are important questions to which answers are absolutely essential.

The next point, which was touched upon by my hon. and gallant Friend the Member for Knutsford (Lieut.-Colonel Bromley-Davenport), although he did not raise it in the same way as I should have raised it, is this. Those who have been engaged on producing prototypes, whether it is for motor cars, motor car engines, aeroplane engines, tractors or anything else, know perfectly well that invariably immense sums of money have to be spent on development expenditure before the prototype can be tested out when it has been produced, and the position has been reached when all the "bugs" which are found in anything entirely new nave been eradicated, and you are satisfied that it can safely be put into production. Having regard to what we are told about the lack of capital from which this firm suffered, where was that money found? The hon. Member for Grantham may have his answer, and it is a very, important question to have answered. We know that the factory was engaged on Government contracts for a long time, and I should think that a works which was fully occupied on such contracts would have had no time whatever to devote to producing something entirely new for postwar production and, far less, have any funds available for that particular purpose.

My next point is this: One of the newest and biggest factories in the country today for the production of tractors is, I believe, the one put down by the Standard Motor Company. I speak subject to correction, but I have seen it mentioned many times that a capital of £2 million was required to put that factory into production. What capital was to be involved in equipping, jigging and tooling, the factory at Grantham, not only for tractors, but also for cars on a mass production basis? I believe the Board of Trade may find it difficult to answer, if they were willing to allow this factory to be handed over without making certain, or getting expert advice, as to the amount of capital which would be required to establish and carry on a successful business. If the Government have a good case a committee of inquiry need not be feared because, presumably, the Government will have nothing to hide. But if the Government refuse a committee of inquiry it is only reasonable to suppose that they will themselves quite unnecessarily create suspicion that there is a good deal to hide. If there is not, what possible objection can there be to a committee of inquiry? I am sure that the hon. Member for Grantham feels that he has a good case, that if he himself is prepared to ask for an inquiry he will be willing to come out into the light of day and give all the facts. I beg of the Government, for the sake of their own reputation—unless they have something to tell us which will convince us that a committee of inquiry is not necessary—to assent to what we are asking today. It would be in their own interests.

8.19 p.m.

Mr. Kendall (Grantham)

I have been in this House for nearly six years, and I have participated in many Debates, including Debates on old age pensions, the Beveridge Plan, agriculture, and pay and allowances. Every once in a while I seem to be faced with having to make a personal explanation. I well remember that nearly the first speech I had to make in this House was in connection with a breach of Privilege, following an investigation by the Public Accounts Committee. I would not have referred to past history except that it was mentioned by the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton). And I believe mat it is in the interests of the Committee to hear the whole story, just for a change. I still believe that the reason I was pulled up on that issue of the Public Accounts Committee was political and not factual; indeed, the final Debate in this House gave me a clean bill of health all the way through, and the Minister, now sitting in another place, gave many words of commendation, not only to me but to the workers, for doing a good job.

The war came to an end, and Government contracts came to an end. I was faced with either having to "fire" everyone in those factories or find additional work for them, when, to my great astonishment, I found that the factories had in fact been allocated to another firm. This was the first time, I believe, in the history of Government factories that those who were occupants were not to be allowed to occupy those factories for peace-time production. I know the reasons for that, too, and that is why my name went down on the Motion asking for a Select Committee of Inquiry. I thought that there was pressure against me and my firm and that there were people who should be pulled in front of that Select Committee to give evidence, because there were things that should be said and should come out that had never given this company of mine a chance of getting along. There has been pressure brought by a Member of another place, who lives a few hundred yards away from me, and who has done his very best locally and in Government Departments to have these factories removed from my firm. All we wanted to do was to work and to be given a chance of work; we deserved that opportunity. We were one of the few companies that never made a penny profit during the war, so we had not any capital to start out. We were not favourably placed like some of the other big firms in this country, who made huge fortunes out of their war time contracts. We were not in that category.

I will deal quickly with the very proper point raised by the hon. Member for Stockport (Sir A. Gridley). The money that was provided on prototype work was provided by me personally and not by the company, and the work was not done on the company's premises. It was entirely separate. I would like to go into that in full detail. I had been concerned in making automobiles all my life until I came to do this war work for the Government. That was the kind of engineering I knew and had been dealing with, and I had the designs and sketches of some years previously, and I still have them, for the prototypes, which the hon. Gentleman has just mentioned, on the final car that was decided upon. These prototypes had been built during the five previous years in France. They were a fine piece of engineering. It is quite true that I went to the right hon. Member for Aldershot on the allocation of the factories, when I found that they were being assigned to others. Why?

Mr. Lyttelton

The hon. Member omitted to say that the factories were allocated to Aveling-Barford by the present Chancellor of the Exchequer.

Mr. Kendall

I grant that and I thank the right hon. Gentleman for helping me. It is perfectly true I did see the right hon. Member for Aldershot because I was shocked to think that we were not going to be given a chance to run these factories. I had been fortunate enough to get hold of a Canadian contract for the repair of vehicles on behalf of the Canadian Government, and I was employing at that time 1,500 people. I consequently got hold of a Ministry of Supply contract for the repair of vehicles too. When the President of the Board of Trade was changed after the collapse of the Caretaker Government, I stated my case to the present President of the Board of Trade and he set up a committee of inquiry under the leadership of the hon. Member for Stoke (Mr. Ellis Smith). The basis of our case is not the basis of the Barford case.

I would like to deal with the Barford case and none of the hon. Gentlemen on this side of the Committee have dealt with it at all. They have not dealt with the case of whether or not the factories should have been allocated to Barfords. The things produced by Barford cannot be produced in Grantham Productions because there is no head room. There is only space of 10 feet 6 inches to the eaves, and road rollers cannot be built there. If now they are going suddenly to produce some kind of tractor where are they going to produce them and where are they going to get their materials to produce them?

The decision was come to in 1945 to allocate the premises to Grantham Productions, and in 1945 we all worked extremely hard on the Canadian contract and the Ministry of Supply contract. Further, we worked terribly hard on the preparatory work for the cars and the tractors, but we were always up against the difficulties of some suppliers stopping supplies. Certainly I want a full-blooded inquiry. Certainly I want evidence called as to whether some of the big ones applied pressure on some of the suppliers of accessories, telling them "If you supply Kendall we will cancel "our orders." I was up against that kind of thing.

I want to refer to the backing I had from India. It was genuine backing. We tried to do a good job and further backing was going to be given by the same people, who had travelled, I do not know how many miles, in connection with the matter. What happened there? I remember ever so well. At twenty minutes to 11 o'clock on a certain Friday morning everything was going fine and the additional capital was going to be placed in the business. We were off again. A visit was paid—again this is the reason for my name on the Order Paper—to a very big motor car manufacturer, who showed my principal, empty conveyor lines, bodies without door handles or without upholstery, and said to him as Barford said to him—a lot of this was used in the House in the last few weeks and also in the newspapers—"There is going to be a political row unless these factories are assigned to Barfords." This being perfectly true. I want a public inquiry. At twenty minutes to eight that night he came back and said, "I am sorry, I dare not touch it at all," and went back. He went on the promise, too, that if he wanted cars out there, they would be sent, but that England by now would be in a terrible financial emergency and that industry was going bust. Why should he be mixed up with this and blamed, and why should he be mixed up in local politics? He is a very fine, honourable man for whom we tried to do a fine and honourable job, but the pressure which has been applied to us from all kinds of sources is something disgraceful. All kinds of names should be used, and the best way to disclose them is through an inquiry.

I did not go hawking this thing around, but went to the Finance Corporation for Industry who put an investigation on the works. I never saw the full report, but this is briefly what they said. "Kendall, you are a good engineer; your works up there in Grantham are excellent; your products are first-class; but your finances are awful." I went to them because the finances were horrible, and if the first three points were good, I had every right to go to them. Surely, there is nothing wrong or criminal in somebody wanting to do a job of work? After all, I am private enterprise and have always been. I hope some hon. Members of the Tory Party will forgive me, but sometimes I doubt whether the Tory Party really are the champions of private enterprise unless private enterprise means a monopoly. I really mean this because when one gets into the City of London one is told, "Sure, it is fine. We will do this, that and the other." But then they bring up the political arguments and say, "Well, we are frightened of the politics of this business."

As far as concerns the allocation of 1947, if I may skip a few pages, the position is that F. S. Cotton, whom I never knew, came along and said that he believed he could find a group who would be interested in starting up that factory. Of course, I was interested. One hon. or right hon. Gentleman made a statement to the effect that I was the financial backer of the Cotton syndicate, but that is totally untrue.

Mr. Lyttleton

Then why was it published?

Mr. Kendall

The right hon. Gentleman does not read my excellent newspaper carefully.

Mr. Lyttelton rose——

Mr. Kendall

If the right hon. Gentleman is ready to read it out I shall be perfectly happy to give way to him.

Mr. Lyttelton

The hon. Gentleman has contradicted something which I said. I said that he stated himself in the newspaper which he controls that the Cotton syndicate was the same as the Kendall group and I will had him the newspaper now. [HON. MEMBERS: "Read it."] I will put it on the Table. [HON. MEMBERS: "Read it."] The heading is, "Assets Acquired by the Kendall Group." I will not go further, but this paper is printed and published by Grantham Publications of which the hon. Member and one other gentleman are directors. I will put it on the Table. [HON. MEMBERS: "Read it."]

Mr. Kendall

I must correct the right hon. Gentleman, because I am sure that it does not say that. I do not know the particulars of the article to which he refers but I am sure that it cannot say that because it is totally untrue. [HON. MEMBERS: "Read it."]

Mr. Lyttelton

If hon. Members want me to read it of course I will. I will read as far as is necessary—further if hon. Members like. This paper is called the "Grantham Guardian." It is printed and published by Grantham Publications Limited, of which the directors are the hon. Member for Grantham (Mr. Kendall) and another gentleman called Mr. Emmanuel. The main heading of the article—[HON. MEMBERS: "Read it."] This is the paper which is controlled by the hon. Member—[HON. MEMBERS: "Read, the article."] It says: Assets acquired by Kendall Group. It was upon that that I said that the hon. Member's own newspaper said that the assets had been acquired by his Group. [HON. MEMBERS: "Read it."] I am reading it. If hon. Members want the whole article I will read it.

Mr. Gooch (Norfolk, Northern)

Hand it over here and I will read it to you.

Mr. Lyttelton

The article reads as follows: 'Any major alteration in the financial structure of a company occupying a Government factory involves reconsideration of the tenancy allocation. 'The future of the Government-owned factory in Grantham is being urgently reviewed and consideration is being given to allowing the present allocation to stand.' This statement was given to the 'Guardian' yesterday evening by an official of the Board of Trade regarding the Springfield Road Factories, where it is hoped to manufacture agricultural tractors. An offer to the liquidators was received and accepted earlier in the week for the purchase of the whole of the plant and stocks of Grantham Productions, Limited. A substantial deposit accompanied the offer. The necessary financial support for the firm's continuation is thus assured, and engineers, on behalf of Mr. F. Sidney Cotton, of Seamore Place, London, have been busy at Springfield Road this week making an inspection in the event of the new company obtaining the lease. The name of the company will be Grantham Productions (1947) Limited.

Hon. Members

Go on.

Mr. Lyttelton

Very well. Mr. Cotton himself is coming to Grantham in a few days. He told the 'Guardian' yesterday that details of Mr. Denis Kendall's capacity in the new firm had not yet been finalised. As soon as the engineers' reports are complete a date can be set for production of tractors to begin. It is anticipated that work will start in a few weeks' time, and the output is expected to be 50 a week at first. Also dependent on the engineers' reports is the number of men who will be employed by the company, but it is anticipated that the figure will be in the region of several hundreds. At Wednesday evening's meeting of Grantham Borough Council, Coun. H. Cant asked if the Chairman of the Town Planning Committee"— [Interruption.] Well, hon. Members asked me to read all this. It goes on: had any further information about the future of the Springfield Road factory. Coun. S. Foster replied: 'I have no further information. The factory has not been allocated to anybody.'

Mr. Gallacher

On a point of Order. The right hon. Member said or implied that the hon. Member for Grantham (Mr. Kendall) had a controlling interest—[HON. MEMBERS: "Financial"]—and all we wanted him to do was to quote from the newspaper, and not to read it all out. We wanted him to quote anything that suggested that the hon. Member had a controlling interest.

The Temporary Chairman (Mr. Butcher)

It might be as well if the hon. Member for Grantham (Mr. Kendall) were now allowed to continue his speech. [HON. MEMBERS: "No." and "Withdraw."]

Mr. Lyttelton

This matter has been called into question. I have read now, at the request of the Committee, the statement out of this paper. It begins. Assets acquired by Kendall Group. If hon. Members require any proof that the "Grantham Guardian" was in fact controlled by the hon Member——

Hon. Members

No.

Mr. Kendall rose——

Hon. Members

Withdraw.

Dr. Morgan (Rochdale)

On a point of Order. Is it not customary in this House if an honourable Member—and everybody knows that the right hon. Gentleman opposite is an honourable Member, and a right honourable gentleman, a man of great integrity—makes a statement which he is asked to prove and to justify, and if he has not done so, that the right thing is for that Member to withdraw his statement?

The Temporary Chairman

That is not a point of Order. It is a matter for the Committee whether statements that have been made carry the weight which the right hon. Gentleman attaches to them.

Mr. Kendall

I still wish to complete what I was saying when I was interrupted. The right hon. Gentleman the Member for Aldershot stated that I was supposed to be controlling the Cotton group. I tell him once again that I have no financial interest in any way, shape or form in the Cotton group and never have had under any circumstances. That statement from the right hon. Gentleman is totally untrue.

Hon. Members

Withdraw.

Mr. Lyttelton

I made my statement upon the information in this newspaper. [An HON. MEMBER: "On a headline."] Really, hon. Gentlemen opposite must learn to control themselves. The word of the hon. Member for Grantham is quite sufficient for me. If he says that he had no interest in the group and that the statement is incorrect, naturally I accept it.

Mr. Scollan (Renfrew, Western)

On a point of Order, Mr. Butcher. I want to know if it is in Order for a right hon. Gentleman to impute a motive——

Wing-Commander Hulbert (Stockport)

Take your hands out of your pockets.

Mr. Scollan

You have had your hands in my pockets for a long time. Is it in Order, Mr. Butcher, for a right hon. Gentleman to impute an ulterior motive to an hon. Member and to fail to substantiate the motive which he attributes to him?

The Temporary Chairman

I understand that the right hon. Gentleman the Member for Aldershot has entirely withdrawn any suggestion that he made and that the hon. Member for Grantham is satisfied.

Mr. Kendall

When Mr. Cotton came along and said that he had a group who were determined to get the factory started and on its feet again, specifically for the manufacture of tractors, every step was taken by myself to ensure that he had the proper financial backing. This was done by a personal visit to one of the banks here in London by a noble friend of mine in another place who was going to be connected with the new firm on the basis that it was in the interests of the workers of Grantham, in the way that I was interested. He went along and got the assurance from the bank manager. We had subsequent meetings with the Board of Trade. There were one or two names in the syndicate which I knew well by reputation and only slightly personally—good names and substantial names—and I thought we were on the road to success and prosperity once more and felt very happy about it.

But something transpired with Cotton and those with whom he was associated in the negotiations and deliberations of which I have no knowledge except one thing, that when the adverse publicity broke through in the "Daily Graphic" and the "Financial News"—this I believe to be true; I think the right hon. Gentleman the Member for Aldershot has already made a similar comment—at the particular moment when the deal was about to be completed, it was of such a character and nature that some of them withdrew from the group, and there we were left high and dry once more. The factories at Grantham have had approximately 100 key men working all these very many long months because key men were part of the assets of the company as a going concern. The place is tooled up for tractor manufacture. It is tooled up for car manufacture, but far more so for the manufacture of tractors that have been well proven and accepted by the Ministry of Agriculture. They serve a real purpose and are sold at a reasonable price.

I do not know what will happen after tonight's Debate. I do not know if there will be a public inquiry, or whether a Select Committee of Inquiry will be constituted through the officers of the Board of Trade, or if it will be refused. However, one thing I am absolutely certain of, and that is that had G.P. not become political but had remained industrial, we should have been at work a long time ago. And I want to say this: no matter what is the outcome of this Debate, so far as I am concerned, I will keep on fighting and travelling thousands more miles to get the company back on its feet again, provided they give full employment to the folks of Grantham. I am not interested in any kind of financial jiggery-pokery; I am not the slightest bit interested in somebody making capital appreciation.

I am not talking of politics, but I put my money into it and I will still sell everything I have to put it back there again if it will help. I shall keep fighting to get somebody to take over those factories, to produce the jobs there that are good, with the backing of many of the small suppliers who, in spite of what somebody said here about cast-iron not being required for tractors—the one who said it did not know what he was talking about because you use cast-iron to give weight, and weight gives pulling power—today have masses of cast-iron which will be scrap unless it is utilised. The workpeople are good and the products are good, and I wish anybody good will, and I will give them every help I can in getting that place restarted and getting re-allocation of those factories to those who mean business up there.

8.48 p.m.

Earl Winterton (Horsham)

I think I shall have the assent of both sides of the Committee in paying a tribute—though naturally I do not agree with everything that has been said in it—to the speech of the hon. Member for Grantham (Mr. Kendall). He is in an obviously difficult position and, while he has made some controversial statements with which I am not in agreement and neither are my hon. Friends on this side of the Committee, he is fully entitled to put his case. After hearing it, any ground which the Government have had for refusing an inquiry must be completely eliminated; in fact, it would be nothing less than a scandal after the speech we have just heard, if the Government refuse an inquiry. I would also like to pay a sincere tribute—and I hope hon. Gentlemen opposite will not think I have my tongue in my cheek—to the attitude of the hon. and right hon. Gentlemen opposite when my right hon. Friend the Member for Aldershot (Mr. Lyttelton) was making his speech. I hope I am not saying anything controversial, and I hope I shall not be interrupted when I say it was quite obvious to me that those hon. Members who were in the Chamber were impressed by the fact that here was a serious state of affairs.

Because they have not been quite properly recited in the speech of the hon. Member for Grantham, I will recite some of the facts—perhaps I could have the attention of the Parliamentary Secretary to the Board of Trade? I can understand he wants to talk to his secretary; that is a perfectly reasonable thing to do. These are the facts which my right hon. Friend recited and, once again, I appeal to hon. Gentlemen opposite as one who, whatever my faults may be, has seniority in this Chamber that, even if they do not agree with the facts which I shall now state, the recital of those facts by my right hon. Friend demands an impartial committee of inquiry.

What are the facts? The first is this. The right hon. Gentleman the Chancellor of the Exchequer and my right hon. Friend refused the suggestion made by the hon. Member for Grantham. We never had a single word of explanation from the Government benches as to why an offer, which was refused by the Chancellor of the Exchequer, when he was in the position occupied by the right hon. and learned Gentleman, was accepted by the present President of the Board of Trade. That is the first point. The second point no one disputes. The hon. Member for Grantham has not dealt with it in his speech, and there is no reason why he should have done so. It is that the maximum amount of money available, something like £175,000, was a totally inadequate amount of capital, however able the hon. Member may be, and no one has attacked his ability or suggested that he has not done admirable work. However admirable he may be, the amount was totally inadequate. We have not had throughout these Debates one word of explanation from the Government benches on that point, and I believe it to be one of the reasons why the Chancellor of the Exchequer turned down the original offer.

The next point on which we say there is need for an impartial-committee of inquiry is the calamitous history of Grantham Productions. There is £23,000 owing to the Inland Revenue, and a total deficiency I understand—the hon. Member can correct me if I am wrong—of £445,000, which is some £170,000 more than its capital. Is this Committee to be asked by the hon. Gentleman when he replies to believe that a factory allocated by the Government to a business which shows such calamitous results, with such heavy sums of money owing to the Inland Revenue, is not a matter which should be inquired into? Is that- an ordinary thing which can happen? Surely no one is going to take up that attitude.

There is the question of the treatment of the firm of Aveling Barford. I think my right hon. Friend was extremely friendly to Mr. Cotton, but I am neither friendly nor unfriendly. Is the Committee to be told, and through the Committee the country, which takes a considerable interest in this matter, that the present Government allocated, one month after he had made his final composition, which I think was 12s. in the £, this factory to Mr. Cotton? I do not want to be too controversial, but if this is an instance of business management by a Socialist Government, God help Socialism.

Lastly, I would like to say that this is a point of investigation—Mr. Cotton, this wonderful financier whom the right hon. and learned Gentleman the President of the Board of Trade had selected was able to find only £110,000. It is only fair to say to the Committee, and I quite realise that feelings may be aroused over this matter, that there may be an answer to every one of these questions; but we have not had them yet in Debate. I wish to associate myself with my right hon. Friend the Member for Aldershot who says there is no charge made against the personal integrity of the hon. Member for Grantham. But a factual statement has been made by my right hon. Friend and many hon. Friends behind me, and never answered. In parenthesis, I would say that the President of the Board of Trade is abroad, and that is the reason that he cannot be here tonight. These questions have never been answered by him, nor by the Parliamentary Secretary, and they must involve a reflection on the administrative credit of the Minister, and indeed the credit and honour of the whole Government unless a satisfactory explanation which is signally absent up to now for reasons which on the face of it must be a most undesirable sequence of events for which the Board of Trade was responsible at every stage.

Some questions were asked on this matter a short time ago. The acting Leader of the Opposition asked a question and I asked questions to which I received an astonishing reply, which I hope we shall not have from the Government spokesman tonight, from the acting Leader of the House. I asked: May I put the question in a manner which the Lord President will not describe as ponderous? Is it not the duty of the Government to allow a Debate on a Motion which must, so long as it remains on the Order Paper and is not debated, be a reflection upon the conduct of the Minister? How can it be anything else but a reflection on the Minister, especially after what the hon. Member below the Gangway said tonight. I received this strange reply from the acting Leader of the House: So far as I know, my right hon. Friend does not mind the Motion remaining on the Paper, and I do not know that he feels that his honour is involved. Perhaps that will put the noble Lord's mind at rest about that aspect of the matter."—[OFFICIAL REPORT, 17th July, 1947; Vol. 440, c. 607.] Hon. Gentlemen opposite thought that that was a very good joke. Is it really, when facts are brought out, as they have been brought out in three Debates, reflecting upon the Minister, and indirectly, if not directly, upon the hon. Member below the Gangway, as he admitted in his speech. He said that statements had been made reflecting upon him personally. Is that a matter for laughter? Is it the way to treat the House of Commons to take the attitude, "Of course the silly noble Lord wants an inquiry, ha, ha, ha." It may be that I or some other speaker on this side of the Committee excites the ridicule of hon. Gentlemen opposite. We do not object to that; they frequently excite ours. With all respect, because although I might not always show it, I have considerable respect for hon. Gentlemen opposite, I do not believe that any responsible Member opposite can deny, in his heart of hearts, after the recital of the facts tonight by my right hon. Friend, and the speech made by the hon. Gentleman below the Gangway, and the speeches made on three occasions in Debates, that these are matters which ought to form the basis of a proper inquiry.

We have had, on the whole, a very good-natured Debate. The Committee has shown itself alive to the importance of this matter, as is indicated by the crowded benches. I think everyone will agree that the fountain of public life is purer and cleaner in this country than in any other country in the world—that is a rather banal expression but it is true—and there should be no suspicion of a taint about it. I say that if the Government refuse an inquiry after this evening's Debate, there will be such a suspicion. Already there are ugly rumours, I hope that they are quite untrue, going around in the country about this matter. I will end on this note, and I hope that the Parliamentary Secretary will, in his reply, deny it and say that there is not a word of truth in it. I heard the other day from an eminent man who had nothing to do with any firm which has been mentioned in this case that: "Of course the real reason why the Government are refusing an inquiry is because if they have a proper inquiry such a scandal would be caused by the Government's handling of the matter that they might endanger their positon."

9.0 p.m.

Mr. Deer (Lincoln)

I intervene in this Debate because a number of my constituents have worked for Grantham Productions and, as a result of the redistribution of constituencies which is to take place, a number of the constituents of the hon. Member for Grantham (Mr. Kendall) will come into my constituency. I cannot see how this squabble between rival claimants will help the working people of Grantham. In this view I am supported by my trade union colleagues. In Grantham they feel that if this factory with its hundred key workers can be placed into early production, the obvious thing for the Government and for the Department concerned is to give the opportunity to the people who are there on the job to have a shot at it. I am not interested in the gentleman named Mr. Cotton. I do not know him. However, I do know that it is no new thing for financiers to wreck industries. It is no new thing for rival industrialists to stake claims of this character.

I want to impress upon my hon. Friend the Parliamentary Secretary to the Board of Trade that if a long drawn out inquiry means that these people who are anxious and willing to work in Grantham will be kept out of work, he should refuse it even though the hon. Member for Grantham asks for it himself. Surely, production is the first consideration. I want to reply to the point made by the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) when he asked, "Why should not industrialists have first claim to it?" That depends upon what use the industrialists are going to make of the work. In my constituency we had a great industrial firm, Babcock and Wilcox, who bought out Clayton Boilers. They said what they were going to do but the moment they got there they shut the firm down and transferred Clayton Boilers to Glasgow. We do not want that to happen in Grantham. I impress upon the Board of Trade the importance of seeing that, whatever the allocation is, it shall be made to the people who intend to produce goods and not the people who intend to close down factories. Let us have a guarantee that these factories will not become warehouses, and that they are not to be used in order to prevent the development of a new tractor firm because that would impinge upon the financial and economic interests of somebody who is already making tractors.

It is a singular fact that my friends on the regional board who advised the Parliamentary Secretary—and I refer particularly to the trade union representatives—are all in favour of the allocation being granted to Grantham Productions. Why? Because Grantham is a one employer town. They believe that two employers will give them greater security. It would mean that if workers get the sack from one monopoly, at least they have a chance of a job somewhere else, whereas if there is only one firm, the sack means that they must go out of the industry altogether. For that reason the people who represent the unions in Grantham, the people who have worked for Grantham Productions, insist that we should, not allow any inquiries to stop the possibility of getting men back to work in a place where the key men and the plant are available. I hope and trust that, whatever may be the private quarrels between financial and industrial firms, the Government will see that the right thing is done to the workpeople of Grantham.

9.5 p.m.

Mr. Quintin Hogg (Oxford)

I hope the Committee will believe that, in what I have to say on this matter, I am not seeking in any way to raise an issue between the parties in this House, because I do not think this is a question which does involve, or which ought to involve, party differences. I also hope that the hon. Member for Grantham (Mr. Kendall) will not consider that I am casting any reflections upon him, because, as he well knows, I have no reason to do so, and have only reason to bear him goodwill.

The question to which I wish to devote attention, and to which I think the Committee should devote its attention, is the question whether a case has been made out for a Select Committee of inquiry into the circumstances which have been revealed this evening. The hon. Member for Lincoln (Mr. Deer) said that his main interest, which one appreciates, was for the well-being of the workers in Grantham, but I do not think we should take too narrow a view of this matter. Quite obviously, what has happened up to the present, moment has not been in their interest, and, quite obviously—and I am sure the hon. Member for Lincoln will be the first to agree with me here—supposing that there is a prima facie case for inquiry, the very last thing which it is in the interests of the Grantham workers to have is the hushing-up of facts which demand inquiry. That cannot be in their interest, and, when the hon. Gentleman urged the Parliamentary Secretary, simply on the grounds of delay, to refuse an investigation, I could not help thinking that he was taking a wrong view of what the interests of those whom he genuinely desires to assist really are.

As it seems to me, there are two separate lines of complaint before the Committee, each of which separately demands an inquiry. There was the speech of my right hon. Friend the Member for Aldershot (Mr. Lyttelton), and the impressive speech of the hon. Member for Grantham. As I understood the speech of my right hon. Friend, it was not, on any material consideration, really inconsistent with the speech of the hon. Member for Grantham. Each proceeded on parallel lines and they made allegations which seem to me to demand some reply.

Dealing first with the speech of my right hon. Friend, the first point is that, for reasons which I think must be conceded to be adequate—at any rate, at first blush and in the absence of explanation—both the present Chancellor of the Exchequer and his Conservative successor, had, in fact, rejected the application of the hon. Member for Grantham. That, in fact, involves no reflection on the hon. Member for Grantham whatever. The hon. Member replied that he had been subjected to improper pressure for motives of an ulterior character, and had been prevented either from raising the necessary finance to support his venture, which was technically sound, or which he claimed to be technically sound, or even from retaining the advantages which he had properly secured by allocation from the Ministry. That demands an inquiry. Again, my right hon. Friend said—and it seems to me that the two cases are perfectly consistent with one another—that it is all very well for a technically sound project to be put before the Board of Trade, in which the hon. Member for Grantham honestly and honourably believes, but it is the duty of the Board of Trade, before they make an allocation, to satisfy themselves that the project is not merely technically sound, but that it has a sufficient financial backing in order to make it practically possible. I should like the Parliamentary Secretary to say whether or not he accepts that view?

The charge made by my right hon. Friend proceeds from that point. It is that, at no stage, was there ever in existence any financial backing which would make this project—which the hon. Member for Grantham claims to be technically sound—a practical possibility. That is the charge. Therefore, the first question which arises for inquiry is, what was it that led the present occupant of the office of President of the Board of Trade to change the decision arrived at, to reject an allocation, in respect of a project which, however technically sound it might be, did not prove to have sufficient financial backing? Nor am I impressed with the kind of reply which seems to be adumbrated from the benches opposite. It may have been a thoroughly unfortunate thing that the necessary financial backing for this venture was not forthcoming. It might even be suggested that Government money ought to have been produced to support it. It might have been that the hon. Gentleman was right, that the financial backing had been refused for improper reasons, and as the result of intrigue, but that only strengthens the case for an inquiry. What cannot be justified, at first sight, is what happened, namely, that the Board of Trade gave an allocation which had a financial backing which was admittedly insufficient.

The next thing which seems to me to demand an inquiry—and, again, no reflection is cast upon the hon. Member for Grantham—is that after, I think, 12 months of operation, this project failed for the reason that my right hon. Friend forsaw, not because it was technically unsound, but because it had not a financial backing. It may well be that the hon. Member for Lincoln is perfectly right in saying that the proper course then was to see to it that the Grantham productions, with further backing, should continue their allocation. But, if so, it was not done, and that is the next matter which arises for inquiry. What was done was something radically different, and something which, I think, demands an inquiry more than all the other circumstances. What was done was to accept at its face value, a syndicate of financiers whose assets did not prove anything like adequate for the project which they desired to finance.

I cannot believe that it does not demand an inquiry of the most stringent character. Whatever the technical merits of the project, and whatever the truth, which I accept, of the allegations made by the hon. Member for Grantham, I cannot accept that it does not demand an inquiry into how a group of financiers, headed by a man who, for whatever reason, happened to be a recent bankrupt, should have got a valuable Government contract, which, in fact, they sought to sell at a profit without carrying on any useful work. That, I think, de- mands an explanation. I do not think that the honour of this House, or the serious administration of public affairs, can be put off with anything short, either of a complete explanation of all these circumstances, which at first sight demand an inquiry, or else the inquiry which this Committee demands. After all, the Parliamentary Secretary has had the opportunity of listening to this Debate, and much has come out in the course of it which, perhaps, was not known to him before. It would involve no loss of status, or no admission of guilt on his part, if he has authority to yield to this request made from these benches and by the hon. Member for Grantham himself, who is rightly jealous of his own reputation and who properly desires to put on record the pressures to which he says he has been subject. I cannot think that any loss of prestige to the Government could possibly be involved by yielding to this request. I call upon hon. Members opposite, when they see an issue which does not involve deep differences of principle, to regard a question of this kind on its merits alone, to forget their party affiliations, and my own, and to consider whether or not here is a case where the demands of efficient administration require that the inquiry, which is all we ask for, should be granted by the Board of Trade.

9.16 p.m.

Mr. Lipson (Cheltenham)

I hope hon. Members will agree with me that the issue which has to be decided tonight is one which ought not to be regarded from a party point of view. I think it would be disastrous if a question of this kind was voted upon on that basis. One of the advantages, or, perhaps, I should say effects, of being an independent Member of this House is that, when any matter is before us, one has to acquire the habit of seeing how it is viewed not only from one side but from the other side too. I wish to ask hon. Members, and the Government in particular, in deciding what they should do in this matter, to consider what would be their attitude supposing the position had been somewhat different. Supposing it had been a Conservative President of the Board of Trade who had had the power to allocate a factory, and had allocated it twice over in circumstances similar to those which have been revealed to us tonight, with similar results, would hon. Members then have supported a demand for an in- quiry, or not? Before hon. Members vote on this matter—and I hope there will not be a vote, because I hope the Parliamentary Secretary will be able to accede to this request for an inquiry—they ought honestly to ask themselves what they would have done if the position had been reversed.

Mr. Haworth (Liverpool, Walton)

Surely, there is a corollary to that proposition?—Would hon. Members opposite have supported an inquiry in those circumstances?

Mr. Lipson

If they had refused an inquiry in those circumstances, would the hon. Gentleman have thought it right to do so? If hon. Members opposite choose to follow the example of hon. Members on this side of the Committee, I suggest they might follow the example when they think it is right to do so, and not when they think it might be wrong. Powerful arguments have been advanced in favour of an inquiry. Not a single argument has been advanced against it. After all, the power of the Minister to allocate factories, at a time when factories are in short supply and in great demand, is very great. It is a power which ought to be exercised with the greatest possible care and discretion, and with regard to the national interest only. All that the inquiry would have to decide would be whether that was the principle on which this allocation was made. If this inquiry is refused, it is bound to leave a nasty impression. It cannot be in the interest of the Government that that should be so. The hon. Member for Grantham (Mr. Kendall) himself has asked for this inquiry. I submit, in view of his personal concern in this matter, that when he makes that request he has a right to expect it to be granted.

Therefore, I would say that it is in the national interest, it is in the interests of the proceedings of this Committee, that this perfectly reasonable request for an inquiry should be granted. In reply to my hon. Friend the Member for Lincoln (Mr. Deer) I would say that the inquiry would have no effect whatsoever on the date when this particular factory should go into production, because the Government have decided that now it shall not go to the particular concern to which it was proposed to hand it over; so that, whether there is an inquiry or not, that will not be affected. The inquiry will be about what happened in the past in the allocation of these factories. Therefore, I appeal to the Government, and I appeal to hon. Members who support them, to be willing to agree to this inquiry, because I am sure that the request for it is reasonable, and one that ought to be granted.

9.21 p.m.

Mr. Manningham-Buller (Daventry)

I rise only to raise two points which have not been mentioned as yet. We have recently in the House of Commons been considering the provisions of the Companies Bill in some detail. I think it has been with the agreement of both sides of the House that the powers of investigation by the Board of Trade into the affairs of companies have been very considerably widened. I do not think there has been any division of opinion about that. Well, now, when we come to an instance in which a strong case, in my submission, has been made out, first by my right hon. Friend the Member for Aldershot (Mr. Lyttelton) and then by the hon. Member for Grantham (Mr. Kendall) for an inquiry, it would seem to me extremely odd if that joint appeal were, in fact, resisted by the Board of Trade, to whom such wide powers of investigation are to be given by the Companies Bill. I hope that we shall hear that it will not be resisted, that it will be granted, whatever the results may be; because I do not believe that the Committee, whatever party may be in the majority, can really, consistently with its dignity, let a matter of this sort rest where it does now.

We have to bear in mind the Companies Bill and the provisions for investigation therein included. After all, in considering whether a case has been made out for an inquiry, I do suggest in all reasonableness to hon. Members opposite that the case for an inquiry into this matter is really far stronger than the case for a public inquiry into the Press. One does not know what the result of this inquiry may be. It may well be—I do not know—that the Board of Trade will be able to justify all their actions. I should have thought that the Board of Trade would have been only too glad to have had an opportunity of justifying their actions before a Committee of the House. Therefore, I do hope that, even at this late hour, the Government will decide to grant the inquiry which is sought by the hon. Member for Grantham and by my right hon. Friend. In fairness to the Board of Trade and to the hon. Member for Grantham I hope the request will be met.

9.24 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. Belcher)

I am very glad that we have had this Debate, not because I think it is a good thing that every time the Board of Trade allocates a factory the House of Commons or this Committee should debate it; but there has already been a more or less continuous debate both inside this Chamber and in the country over a period of many months about this particular allocation. I rather regret that there has been so much talk during the last few months outside the House of Commons, because I am quite certain that one of the principal reasons for the failure of people who at some stages have been associated with proposals for the utilisation of these factories—one of the principal reasons why they have fallen by the wayside, is that there have been far too much tittle-tattle and far too many suggestions that something was happening on this side or that side which should not have been happening. So far as I am aware—and I have an intimate knowledge of, at least, the later stages of the developments—so far as I know them, there is no reason at all why there should have been so much talk, and I think it is a very great pity that we have had it.

The right hon. Member for Aldershot (Mr. Lyttelton) was inclined, in his usual kindly fashion, to suggest that my right hon. and learned Friend may have been let down by somebody; that it was not because of his own personal decision, and therefore his own personal mistake, but that somebody else somewhere in the Board of Trade had let him down. I can assure the right hon. Member for Aldershot—and I hope he will accept my assurance—that this was, in every sense of the word, a personal decision of my right hon. and learned Friend and it was not a personal decision taken just on snap as a result of reading a brief about the subject. My right hon. and learned Friend has throughout kept himself closely informed of the various developments as they have taken place.

It was suggested by the hon. Baronet the Member for Sutton Coldfield (Sir J. Mellor) that Mr. F. S. Cotton had hawked the assets around. My information is that, in fact, no hawking took place, but that at a late stage in the proceedings there was an attempt to arrive at an agreement whereby the factory would be better utilised. I will deal with that point later on, but I want to pick up one or two of these questions before getting on to the main thread of my argument. The hon. Baronet asked: What experience had this group of this type of production? Well, there was the hon. Member for Grantham (Mr. Kendall) who, I think, is admitted by hon. Members on both sides of the Committee to be a production engineer of some quality. At the time the allocation was made there was associated with the group another gentleman, who subsequently withdrew after the allocation had been made, whose name stands very high as a production engineer in both Government and industrial circles in this country. There was a great deal of experience which, surely, would satisfy even the hon. Baronet. He also asked me: Was any undertaking given by anybody to put the new Grantham Productions Limited in a favoured position compared with other established firms who are producing tractors? No, there was no undertaking given that would put them in a more favoured position than anybody else. So far as I know, no Ministry gave them an undertaking that they would receive anything in particular. But, as I shall show when I come to the main story, their merits were recognised and they were, to some extent, supported by a Ministry which agreed that, so far as the quality of product was concerned, the project was a good one.

The hon. Member for Stockport (Sir A. Gridley)—to whom, as he knows, I always listen with very great respect on these matters because of his vast experience—asked me: Did the group possess the capital to build up plant, to tool up the factory? I think, to a very large extent, that question was answered by the hon. Member for Grantham. In fact, the plant was already there; the factory was tooled up for production; and, therefore, it was not necessary to acquire capital in order to build up and re-tool. The plant was there in the factory, and the tractors were actually being produced all the time, although at a very small rate.

Mr. Lyttelton

I do not want to take the Parliamentary Secretary off his line of thought, but is not he aware that this financial group had not even the finance to buy assets of £110,000, much less to finance any production?

Mr. Belcher

I expected that I should be allowed to deal with the points in a continuing narrative, and I shall come to that in a moment. We did not know at that time that the group would not be able to meet their undertaking to purchase the assets. When we made the allocation, we made it on the basis of an agreement which had been arrived at between the group and the liquidator. It was the liquidator's business to sell the assets, not the business of the Board of Trade. I must emphasise that the Board of Trade only come into this picture of allocating a factory before undertaking any financial arrangements with the group——

Mr. Orr-Ewing (Weston-super-Mare)

The Parliamentary Secretary said that these factories were tooled up for the production of cars and tractors in particular, and that all the machines were there. Is he telling the Committee that these factories were tooled up for the job, which is a very different thing? Were they tooled up for full production, or only for a trial run of production?

Mr. Belcher

If the hon. Member had listened, he would have heard that not only were they tooled up—I do not know whether it was for full production, but certainly for production—but were, in fact, producing, and that one of the products was found to be entirely satisfactory from the point of view of the Government Department which examined it. The right hon. Gentleman began his story by referring to the early days when the Chancellor of the Exchequer was President of the Board of Trade and when the right hon. Gentleman opposite was President of the Board of Trade. It is true that under the presidency of the present Chancellor of the Exchequer the allocation of this factory was made to the firm of Aveling-Barford. That allocation was subsequently confirmed by the right hon. Gentleman, when he was for a short time President of the Board of Trade. Upon the allocation of this factory to Messrs. Aveling-Barford, the hon. Member for Grantham (Mr. Kendall) objected, and I suggest that he had a perfect right to object. It is the right of any applicant for a factory, or group of factories, on finding that it is awarded to someone else, to appeal against that decision, which is what he did. He appealed on what I would regard as rather sound grounds, namely, that he was the sitting tenant employing people in these factories, that he had his machinery there, and that the factories were not really suitable for the kind of production to be carried on by the other firm. That appeal was made to my right hon. and learned Friend, who asked my predecessor, my hon. Friend the Member for Stoke (Mr. Ellis Smith), to conduct an inquiry into the whole business with a view to seeing who should have the factory.

In anticipation of this Debate, I have taken the trouble to go through the files very carefully. It will be appreciated that I was not in office at that time, and that I have, therefore, had to look into the files to find out what happened. I find that the hon. Member for Stoke, when he was Parliamentary Secretary, conducted a thorough investigation. I know the reasons which persuaded him that the decision should be changed. Quite apart from the support from the workers, and petitions from the workers, people in Grantham, local trade union branches and trades councils, there was the important point that the other firm refused to guarantee that they would employ any specific number of people, and the report from the regional organisation—I hope the Committee will take note of this—that the firm of Aveling-Barford were not even employing to the full the plant and machinery which they then possessed. If I were to decide whether or not the allocation of a factory should be made to a particular firm who already possessed a factory in that town, and I found that they were not even employing the resources they had then to the full, I should regard it as being rather illogical to add to their existing resources.

Mr. Lyttelton

Did the Chancellor of the Exchequer concur in that view?

Mr. Belcher

I am now discussing the reasons which prompted my predecessor to recommend a change in the nature of allocation. I do not think that what entered into the mind of the right hon. Gentleman or his predecessor has anything to do with what actuated my predecessor when he came to conduct his inquiry.

Two further points were taken into consideration by my hon. Friend the Member for Stoke. One was that the additional finance required was shown at that time to be available and, subsequently, appeared and the firm went into production. The other was the Canadian Government contract to which the hon. Member for Grantham referred. Here was the situation. Two applicants for a factory. One of the applicants was not at that time, already employing to the full the resources at his disposal. The other applicant was in the factory, with plant and machinery, and a contract from the Canadian Government for the repair of vehicles. I suggest that there was nothing dishonourable or anything to be ashamed of in the action taken by my predecessor when he recommended to the President that the allocation should be changed as it was changed.

Mr. Hogg

I can see the hon. Gentleman's argument so far as the reason why allocation should not have been made to one firm, but I am puzzled as to why he thinks that was a positive reason for allotting to the other firm.

Mr. Belcher

I said that the other firm was occupying the factory.

Mr. Lyttelton

Who was the lessee?

Mr. Belcher

At that time it was Grantham Productions.

Mr. Lyttelton

I think it was British M.A.R.C.

Mr. Belcher

Production was being carried on in Factories No. 3 and No. 4 by the people who wanted to go on producing there. There was guaranteed continuity of production, in the sense that they had a contract from the Canadian Government. It is in the interests of the people of Grantham that if production is being carried on in these factories there should be continuity of production. What exercised the mind of the Board of Trade, as it does now, was to see continuous employment provided for the people of Grantham.

Sir J. Mellor

Could the hon. Gentleman say what is the precise association between Grantham Productions Limited and the people in occupation of the factory, who I understand were British M.A.R.C.?

Mr. Belcher

It would take me a long time to go into all that; I did not think that the Committee would wish to go into the financial matters of two years' ago when what we are discussing is recent events, and the allocation of the factory to the people headed by Mr. Cotton. I do not see that the point made by the hon. Baronet affects the issue which we are discussing tonight.

Sir J. Mellor

The hon. Gentleman himself made the point.

Mr. Belcher

I was making the point that production would continue in these factories if an allocation was made, as it was subsequently made. Towards the end of last year, the creditors of Grantham Productions forced the company into liquidation. It was represented to us by the hon. Member for Grantham that he would be able to find backers who would be prepared to supply the capital necessary to recommence production at the factories, and my right hon. and learned Friend agreed to postpone any action to re-allocate them until Easter, 1947. I do not know whether that will be criticised or not. Let me point this out: Had my right hon. and learned Friend not agreed to that deferment, and had Grantham Productions been forced to get out and take their plant with them, and had the factory been allocated to some other firm, the time taken in the installation of new plant and machinery would have taken until Easter. So there was no question of losing production or putting people out of work on the part of the Board of Trade. In the meantime, Aveling-Barford came into the picture again, and they applied for a reallocation to them. It is not true, although it has been claimed by or on behalf of Aveling-Barford, that the President of the Board of Trade gave them any undertaking that he would allocate the factories to them in the event of the withdrawal of Grantham Productions. That is not true The President merely said that their application would be considered on its merits.

On 27th May, the hon. Member for Grantham brought to the Board of Trade representatives of a new group who had made a binding offer of £110,000 to the liquidator for the assets of Grantham Productions. The offer had been accepted by the liquidator, and £20,000 had been paid in as a deposit. It was proposed to continue to manufacture tractors only and to drop the plan for the small car. A new company to be called Grantham Productions (1947) Limited was to be formed, and we were advised as to the names of-the parties interested. The bulk of the finance was to be provided by this group, headed by Mr. F. S. Cotton. In confidence, we were told who in fact was providing the money behind Mr. Cotton. We took the trouble to go to the bankers of the group, and the bank stated categorically that Mr. Cotton was an old customer of the bank and had never failed to meet his obligations.

Mr. Lytttelton

Is the hon. Gentleman now denying an answer which the President of the Board of Trade gave to me in reply to a Question that this gentleman completed the last composition to his creditors a month before?

Mr. Belcher

I rather hoped that the right hon. Gentleman would ask me that question, because I did not say anything of the kind. I am merely telling him what the bank told us, and the bank told us what was subsequently proved to be wrong, but he cannot blame the President of the Board of Trade if the bank makes a mistake. [Laughter.] The noble Lord is very amused at his own humour, and he makes the criticism that we apparently are not handling financial affairs properly. May I suggest to him that his laughter will recoil on himself when he realises that I am explaining that a private enterprise bank made a mistake and gave the wrong information to the Board of Trade. There was a subsequent statement made to us by the bank, that Mr. Cotton and his syndicate were well able to provide the sum prescribed, and, indeed, their total resources were known to amount to approximately £500,000. Within the knowledge of the bank, the Board of Trade could, therefore, rest assured that ample finance was available. I suggest to the House that if there is to be criticism of anybody on these financial grounds, it is certainly not criticism of the President of the Board of Trade.

Mr. Lyttelton

Is the Parliamentary Secretary aware that in all transactions of this kind all traders look for references other than bankers' references, which merely relate the state of the credit of the particular customer at a particular moment, and must necessarily do so?

Mr. Belcher

The right hon. Gentleman again does not appreciate the particular nature of the argument which is being put up, because he refers to a trader seeking references other than bank references before undertaking a deal. We are not a trader; we are an allocation Department. We are not trading with Grantham Productions. That is a job for the liquidators. They are the people who are selling the assets of Grantham Productions. All we are doing is to allocate a factory and we are not the people who bought the assets.

The hon. Member for Stockport asked me one or two quite pertinent questions about the existence of prototypes of both car and tractor. It has been explained by the hon. Member for Grantham that the car anyhow was produced in France, but the hon. Member will have heard that subsequently the idea of producing the car was dropped anyhow. As to the tractor, the Ministry of Agriculture were asked to investigate. They agreed with the view of the new group that the production of tractors could be quickly restarted on a substantial basis, and they urged the necessity for this production. They said that the technical organisation of the factory was still available, and on the question of supplies and essential material the Ministry of Agriculture, through their regional machinery officer, were able to make a report. I want to quote this from that report: There are one or two shortages but when these are closely examined they amount to very little, and I feel justified in saying that although Grantham Productions have been nominally out of production (producing perhaps only two or three tractors a week for seven months) their position on these shortages is far better than some of the Companies who have been in production continually. As a result of that careful inspection they were satisfied that a substantial volume of production could be built up within the ensuing six months and thereafter maintained.

On nth June the proposed chairman of the new board came to the Board of Trade to discuss with us certain immediate possibilities. This, I hope, will meet the point which has been made by several hon. Members opposite both today and on previous occasions. It was certainly made by the hon. Member for Sutton Coldfield. (Sir J. Mellor). The chairman said, in view of certain inadequacies of technical equipment and on the understanding or belief that Messrs. Aveling-Barford would not be averse to an amicable settlement, his group had decided to approach Aveling-Barford with a view to an arrangement by which the two undertakings would join together to operate both factories, presumably believing that they would have more economic unity if, instead of endeavouring to produce in rivalry with one another in Grantham, they joined together for economic and efficient production.

The reply of the Board of Trade was that we would welcome any settlement of outstanding differences, but we made it quite clear that the Government could not be in any way associated with any approach of this kind at the present. In other words, these negotiations were purely and simply a matter between Grantham Productions and the group of Messrs. Aveling-Barford. We asked quite rightly—and I hope the right hon. Gentleman will applaud us for asking—and we received an assurance that no attempt would be made to use the allocations of the factories as a bargaining counter. We asked that that should not be the case and we were given a firm assurance that it would not. In fact, I do not believe that any one would suggest for one moment that the Board of Trade would ever be a party to any such proceeding. They came to us through their chairman, or the man they proposed to nominate as chairman, with this proposal that the group should approach Messrs. Aveling-Barford with a view to joint operation, and I imagine that it is from that approach that the story has arisen that the group endeavoured to hawk around the assets which they had purchased. There is all the difference in the world between trying to enter into an amicable arrangement with another firm working side by side with you and taking the items and that plant which you have bought from the liquidator out of the factory which you have been allocated and selling it to someone else in the City of London or elsewhere.

On 7th July, the time for the payment of the purchase price of the assets set by the liquidators lapsed, and because we could not be satisfied that there was a reasonable possibility of the group coming along with the money to purchase the assets we decided to withdraw the allocation. It was announced by my right hon. and learned Friend in the House about 10 days ago that we had in fact withdrawn the allocation. The situation now is that it is competent for any firm which is interested in these factories at Grantham to make an application for their use. In making the allocation we shall be guided by the nature of the proposed production and by all the other relevant factors which are taken into account—[An HON. MEMBER: "Including finance?] Yes, except that on this occasion perhaps we shall ask the nationalised Bank of England and not a private enterprise bank.

In conclusion, I would only say these few words. I have endeavoured during my speech to give a distinct, clear and frank recital of the facts as I know them. I do not consider that at any stage during the course of what I have had to say to the Committee this evening I have shown that there has been either negligence or undue partiality by officials of the Board of Trade or by the Ministers of that Department. It has been our anxiety, as it was that of my predecessor the hon. Gentleman the Member for Stoke (Mr. Ellis Smith); and as it is still that of the Board of Trade today, to see that all Government factories which become available are allocated with regard to the needs of the country for the production of certain types of commodities, and bearing in mind the needs of the particular locality for the employment possibilities for the people there. I regret very much that these factories, which during the war became famous for the quantity and quality of their production under the leadership of the hon. Member for Grantham, which was so helpful towards winning the war, have not been available to the nation during the past seven or eight months——

Mr. Lyttelton

Whose fault is that?

Mr. Belcher

—while all this coming and going has been taking place. I only hope that it will be possible in the very near future to establish in these factories in Grantham a firm which will give to the people of that town an opportunity of returning to those factories and displaying in the national interest the very high degree of skill they displayed throughout the war years.

Earl Winterton

I beg to move to reduce the Vote by £100.

I do so because of the refusal of the Parliamentary Secretary to grant an inquiry and because of the fact that he has not made a single reference to the request, which came from all quarters of the Committee. May I tell the Government, and I include the Deputy Leader of the House, that this is by no means the last that they will hear of this question, either here or outside?

Mr. Kendall

I have no wish to embarrass the Parliamentary Secretary to the Board of Trade, but would he tell the Committee whether very heavy pressure has recently been brought to bear upon the Board of Trade in relation to the allocation of these factories and in relation to today's Debate.

Mr. Belcher

The answer is that ever since I first became aware of the existence

of the Grantham factories, which was very shortly after I arrived in the Board of Trade, there has been pressure coming from many directions almost constantly. My aim has been to avoid the pressure and to deal with the matter on its merits. My answer to the noble Lord is that I have not acceded to the request for a public inquiry because, without being unduly conceited——

Earl Winterton

The hon. Gentleman is afraid.

Mr. Belcher

I think that the case which I have placed so frankly before the Committee is one which would lead most hon. Members on both sides of the Committee to conclude that an inquiry of the nature suggested is not necessary.

Question put: "That a sum, not exceeding £24,969,250 be granted for the said service."

The Committee divided: Ayes, 115; Noes, 263.

Division No. 344.]	AYES.	[9.58 p.m.
Amory, D. Heathcoat	Haughton, S. G.	Osborne, C.
Baldwin, A. E.	Head, Brig. A. H.	Pickthorn, K.
Barlow, Sir. J.	Headlam, Lieut.-Col. Rt. Hon. Sir C	Pitman, I. J
Beamish, Maj. T. V H	Henderson, John (Cathcart)	Ponsonby, Col. C. E.
Beechman, N. A	Hinchingbrooke, Viscount	Poole, O. B. S. (Oswestry)
Bennett, Sir P.	Hogg, Hon. Q	Prescott, Stanley
Birch, Nigel	Hollis, M. C.	Raikes, H. V.
Boles, Lt.-Col. D. C. (Wells)	Hulbert, Wing-Cdr. N. J.	Roberts, H. (Handsworth)
Bossom, A. C.	Hurd, A.	Robinson, Wing-Comdr. Roland
Bowen, R.	Hutchison, Col. J. R. (Glasgow, C.)	Ropner, Col. L.
Bower, N.	Keeling, E. H.	Ross, Sir R. D. (Londonderry)
Boyd-Carpenter, J. A.	Kendall, W. D.	Scott, Lord W.
Bromley-Davenport, Lt.-Col. W	Legge-Bourke, Maj. E. A H	Shepherd, W. S. (Bucklow)
Buchan-Hepburn, P. G. T.	Lennox-Boyd, A. T.	Snadden, W. M.
Bullock, Capt. M	Lindsay, M. (Solihull)	Spearman, A. C. M.
Butcher, H. W	Linstead, H. N.	Spence, H. R.
Challen, C.	Lipson, D. L.	Stoddart-Scott, Col. M.
Channon, H.	Lloyd, Maj Guy (Renfrew, E.)	Strauss, H. G. (English Universities)
Clarke, Col. R. S.	Lloyd, Selwyn (Wirral)	Stuart, Rt. Hon. J. (Moray)
Clifton-Brown, Lt.-Col. G.	Lucas, Major Sir J.	Taylor C. S. (Eastbourne)
Cooper-Key, E. M.	Lucas-Tooth, Sir H.	Teeling, William
Crosthwaite-Eyre, Col. O E	Lyttelton, Rt. Hon. O	Thomas, J. P. L. (Hereford)
Crowder, Capt. John E	MacDonald, Sir M. (Inverness)	Thorneycroft, G. E. P. (Monmouth)
Cuthbert, W. N.	Macdonald, Sir P (I. of Wight)	Thornton-Kemsley, C. N.
Digby, S. W.	Macmillan, Rt. Hon. Harold (Bromley)	Thorp, Lt.-Col. R. A. F
Dodds-Parker, A. D.	Macpherson, N (Dumfries)	Vane, W. M. F.
Donner, Sqn.-Ldr. P. W	Maitland, Comdr. J. W.	Wadsworth, G.
Dower, Lt.-Col. A. V. G. (Penrith)	Manningham-Buller, R E	Wakefield, Sir W. W
Drayson, G B	Marlowe, A. A. H	Walker-Smith, D.
Drewe, C.	Marples, A. E.	Watt, Sir G. S. Harvie
Dugdale, Maj. Sir T. (Richmond)	Marsden, Capt. A	Wheatley, Colonel M. J
Erroll, F. J.	Marshall, D. (Bodmin)	White, Sir D. (Fareham)
Fleming, Sqn.-Ldr. E. L.	Mellor, Sir J.	Williams, C. (Torquay)
Fyfe, Rt. Hon. Sir D. P. M.	Molson, A. H. E.	Williams, Gerald (Tonbridge)
Galbraith, Cmdr. T. D.	Morris, Hopkin (Carmarthen)	Winterton, Rt. Hon. Earl
Glyn Sir R.	Neven-Spence, Sir B.
Gomme-Duncan, Col. A.	Nield, B. (Chester)	TELLERS FOR THE AYES:
Gridley, Sir A.	Noble, Comdr. A. H. P	Commander Agnew and
Grimston, R. V.	O'Neill, Rt. Hon. Sir H	Major Conant.
Hannon, Sir P. (Moseley)	Orr-Ewing, I. L.
NOES
Adams, Richard (Balham)	Anderson, A. (Motherwell)	Awbery, S. S.
Adams, W. T. (Hammersmith, South)	Anderson, F. (Whitehaven)	Ayles, W. H.
Allen, A. C. (Bosworth)	Attewell, H. C.	Ayrton Gould, Mrs B
Alpass, J. H.	Austin, H. Lewis	Baird, J.
Balfour, A	Hall, W. G.	Pearson, A
Barstow, P. G.	Hamilton, Lieut.-Col. R.	Piratin, P.
Barton, C.	Hannan, W. (Maryhill)	Platts-Mills, J. F. F.
Bechervaise, A. E.	Hardy, E. A.	Porter, E. (Warrington)
Belcher, J. W.	Harrison, J.	Porter, G. (Leeds)
Bellenger, Rt. Hon. F. J	Hastings, Dr. Somerville	Proctor, W. T.
Beswick, F.	Haworth, J.	Pryde, D. J.
Bing, G. H. C.	Henderson, A. (Kingswinford)	Pursey, Cmdr. H
Binns, J.	Henderson, Joseph (Ardwick)	Ranger, J.
Blenkinsop, A.	Herbison, Miss M.	Rankin, J.
Blyton, W. R	Hewitson, Capt. M	Rees-Williams, D. R
Boardman, H.	Hobson, C. R.	Reid, T. (Swindon)
Bowden, Flg.-Offr. H. W.	Holman, P.	Richards, R.
Bowles, F. G. (Nuneaton)	House, G.	Ridealgh, Mrs. M.
Braddock, Mrs. E. M. (L'pl, Exch'ge)	Hoy, J.	Roberts, Goronwy (Caernarvonshire)
Brook, D. (Halifax)	Hubbard, T.	Ross, William (Kilmarnock)
Brooks, T. J. (Rothwell)	Hudson, J. H. (Ealing, W.)	Sargood, R.
Brown, George (Belper)	Hughes, Hector (Aberdeen, N.)	Scollan, T.
Brown, T. J. (Ince)	Hughes, H. D. (Wolverhampton, W.)	Scott-Elliot, W.
Bruce, Major D. W. T	Hynd, H. (Hackney, C.)	Segal, Dr. S.
Buchanan, G.	Hynd, J. B. (Attercliffe)	Sharp, Granville
Burden, T. W.	Irving, W. J.	Shawcross, C. N. (Widnes)
Burke, W. A.	Isaacs, Rt. Hon. G. A	Shurmer, P.
Butler, H. W. (Hackney, S.)	Janner, B.	Silkin, Rt. Hon. L.
Castle, Mrs B. A.	Jay, D. P. T.	Silverman, J. (Erdington)
Chamberlain, R. A	Jeger, Dr. S. W. (St. Pancras, S.E.)	Simmons, C. J.
Champion, A. J.	Jones, D. T. (Hartlepools)	Skeffington, A. M.
Chetwynd, G. R.	Jones, P. Asterley (Hitchin)	Skinnard, F. W.
Cobb, F. A.	Keenan, W.	Smith, C. (Colchester)
Cocks, F. S.	Kenyon, C.	Smith, H. N. (Nottingham, S.)
Coldrick, W.	Key, C. W.	Smith, S. H. (Hull, S.W.)
Collindridge, F.	Kinley, J.	Sorensen, R. W.
Collins, V. J.	Kirby, B. V.	Soskice, Maj. Sir F
Colman, Miss G. M.	Kirkwood, D	Sparks, J. A
Corbet, Mrs. F. K. (Camb'well, N.W.)	Lavers, S.	Stamford, W.
Corlett, Dr. J.	Lawson, Rt. Hon. J. J	Stewart, Capt. Michael (Fulham, E.)
Crawley, A.	Lee, F. (Hulme)	Stross, Dr. B.
Crossman, R. H. S	Leslie, J. R.	Stubbs, A. E.
Cunningham, P	Lewis, A. W. J. (Upton)	Sylvester, G. O
Daggar, G.	Lindgren, G. S.	Taylor, H. B. (Mansfield)
Daines, P.	Logan, D. G.	Taylor, R. J. (Morpeth)
Davies, Edward (Burslem)	Lyne, A. W.	Taylor, Dr. S. (Barnet)
Davies, Harold (Leek)	McEntee, V. La T.	Thomas, D E (Aberdare)
Davies, Haydn (St. Pancras, S.W.)	McGhee, H. G.	Thomas, Ivor (Keighley)
Davies, R. J (Westhoughton)	McKay, J. (Wallsend)	Thomas, I. O. (Wrekin)
Davies, S. O. (Merthyr)	Mackay, R. W. G. (Hull, N.W.)	Thomas, George (Cardiff)
Deer, G.	McKinlay, A. S.	Thomson, Rt. Hn. G. R. (Ed'b'gh, E)
Delargy, H. J.	Maclean, N (Govan)	Thorneycroft, Harry (Clayton)
Diamond J.	McLeavy, F.	Thurtle, Ernest
Dobbie, W.	MacMillan, M. K. (Western Isles)	Tiffany, S.
Dodds, N. N.	Macpherson, T. (Romford)	Titterington, M. F
Donovan, T.	Mallalieu, J. P. W.	Tolley, L.
Driberg, T. E. N.	Mann, Mrs. J	Tomlinson, Rt. Hon. D.
Dugdale, J (W. Bromwich)	Manning, Mrs. L. (Epping)	Ungoed-Thomas, L
Dumpleton, C. W.	Marshall, F (Brightside)	Viant, S. P.
Durbin, E. F. M.	Mathers, G.	Walkden, E.
Ede, Rt. Hon. J. C.	Mayhew, C. P	Walker, G. H.
Edwards, N. (Caerphilly)	Medland, H. M	Wallace, G. D. (Chislehurst)
Edwards, W J. (Whitechapel)	Mellish, R. J.	Wallace, H. W. (Walthamstow, E.)
Evans, John (Ogmore)	Messer, F.	Watkins, T. E.
Evans, S. N. (Wednesbury)	Middleton, Mrs. L	Webb, M. (Bradford, C.)
Ewart, R.	Mikardo, Ian	Wells, P. L. (Faversham)
Farthing, W. J.	Mitchison, G. R	Wells, W. T. (Walsall)
Fernyhough, E	Monslow, W	West, D. G.
Field, Captain W. J.	Moody, A. S.	Westwood, Rt. Hon J
Fletcher, E. G. M. (Islington, E.)	Morgan, Dr. H. B	White, H. (Derbyshire, N. E.)
Follick, M.	Morley, R.	Whiteley, Rt. Hon. W.
Forman, J. C.	Morris, P. (Swansea, W.)	Wigg Col. G. E
Foster, W. (Wigan)	Morrison, Rt. Hon. H (Lewisham, E.)	Wilkes, L.
Fraser, T. (Hamilton)	Moyle, A.	Wilkins, W. A.
Gaitskell, H. T N.	Mulvey, A.	Willey, F. T. (Sunderland)
Gallacher, W.	Murray, J. D.	Williams, D J. (Neath)
Ganley, Mrs. C. S	Nally, W.	Williams, J. (Kelvingrove)
Gibson, C. W.	Naylor, T. E.	Williams, W R. (Heston)
Gilzean, A.	Nichol, Mrs. M. E. (Bradford, N.)	Willis, E.
Glanville, J. E. (Consett)	Nicholls, H. R. (Stratford)	Wills, Mrs. E A
Gordon.-Walker, P. C.	Noel-Buxton, Lady	Woods, G. S.
Greenwood, Rt. Hon. A. (Wakefield)	Oldfield, W. H.	Yates, V. F.
Greenwood, A. W J (Heywood)	Oliver, G. H.	Young, Sir R (Newton)
Grenfell, D. R.	Orbach, M.	Younger, Hon. Kenneth
Grey, C. F.	Paget, R. T.	Zilliacus, K.
Grierson, E.	Paling, Will T. (Dewsbury)
Griffiths, D. (Rother Valley)	Palmer, A. M F.	TELLERS FOR THE NOES:
Gunter, R. J	Parker, J.	Mr. Snow and Mr. Popplewell.
Guy, W. H.	Paton, J. (Norwich)

Question put, and agreed to.

Original Question again proposed.

It being after Ten o'Clock, and objection being taken to further Proceeding, The CHAIRMAN left the Chair to make his Report to the House.

Committee report Progress; to sit again Tomorrow.