DEBATE ON THE ADDRESS

HC Deb 23 October 1947 vol 443 cc252-379

[THIRD DAY]

Order read for resuming Adjourned Debate on Question [21st October]: That an humble Address be presented to His Majesty as follows: Most Gracious Sovereign. We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament."—[Mr. Blyton.]

Question again proposed

3.19 p.m.

Mr. R. A. Butler (Saffron Walden)

I think the House may be sure that we shall hear a great deal more of the subject which we have just been discussing, and that hon. Members and right hon. Members on this side will want to press this question of Defence, particularly in regard to the Navy, as much as possible. My duty, however, is to turn the attention of the House predominantly to the problem of economic affairs and to precede the statement which, I understand, the Minister for Economic Affairs wishes to make shortly. This is the first opportunity that Parliament has had, in this Debate on the Gracious Speech, to review the disastrous deterioration in our economic affairs. We were forbidden the opportunity to express our opinions over the summer, and meanwhile responsible Members of the Government, if there are such—there are some—have made some serious statements to the Press regarding the present stringencies, for example, the distribution of coal, and regarding the ever-increasing direction of labour.

At least one Minister who has survived the recent purge is suffering from hysteria at being reported by the Press at all. Usually that is an illness from which public men do not suffer. Most of us are only too glad to be reported. In fact, I make the right hon. Gentleman in question a free offer—if some of those who are sleuthing him would follow me in my speeches in the country, I should be very greatly obliged. It is a remarkable fact that those hon. and right hon. Gentlemen who have been dropped from the Government are behaving in a far less hysterical and far more dignified manner than those who are remaining. That is perhaps not surprising when we consider the present state of the ship, and if members of the crew are giving an honourable and dignified display on leaving the ship just in time before disaster, there is no reason why we should not congratulate them, and feel with them and those who are sitting here with us today a great sense of elation at their personal escape from the disaster.

Not only do Ministers make statements of a varying character, and have varying reactions in the presence of the Press, but unfortunately Ministers make statements which are absolutely and definitely opposed one to the other. The Minister for Economic Affairs I am sure wishes the country to be encouraged to make greater production; and in the first flush of his new office, no doubt primed by those statistics and that documentation which we enjoy when Ministers, the Minister of Supply, speaking in Cardiff on 17th October, spoke thus of the production of steel: Outstanding figures have been achieved and recent results augur well for the strenuous task of achieving the challenging target set by the Prime Minister of 14,000,000 tons for 1948. That is a most admirable sentiment. But what was said by the Minister of Health, who—we understand at his own urgent request—remains to perish with his own experiment of administration? The Minister of Health, speaking in Hull on the same day, said, We shall nationalise the steel industry. It will not be left in the hands of those who have betrayed the nation's need. Not only are Members of the Government differing one from another, but the voice of the "Tribune" is now doubled. We cannot have any confidence in the Government, the supporters of the Government or the organs which support it, all of which have no cohesion left.

It would indeed be entertaining to some, at any rate, if I were to proceed in this fashion a little longer, but I must remind the House, as indeed they all know, that we are facing times of quite unprecedented severity, and I feel sure we shall realise that by the time the right hon. Gentleman the Minister for Economic Affairs has concluded his speech. Therefore, I propose, after a short diversion, in which I want to discuss for a moment the social Measures mentioned in the Gracious Speech, to come straight to the economic situation and attempt to give the point of view which is held by some of us on this side of the House.

First, may I say one word upon the social Measures? We welcome the proposal to reform the Poor Law. There is very little that we have heard about it so far, but we have not much difficulty in understanding that this entails the completion of the social security work, pattern and programme undertaken by the Coalition. It only remains for me to remind the House that the whole of the preparatory work for this task was accomplished under Conservative Governments and supplemented by the work done by the Coalition Government under my right hon. Friend the Member for Woodford (Mr. Churchill). May I refer to the Local Government Act, 1929, which removed the stigma of the Poor Law by checking segregation of sick poor and education of poor children and by putting them under the county councils and county borough councils as a first step? This was followed by the Unemployment Act, 1934, when the State assumed general responsibility for the relief of able-bodied unemployed outside insurance. That was followed by the Supplementary Pensions Scheme, 1940, and in 1941 the household means test was abolished and a new and more humane regulation introduced.

I can only say in this connection that I trust this is not the only reform connected with matters in which the poor are very much interested that will be brought forward by the Government. We should like to see the implementation of the Rushcliffe Committee's recommendations, and the report on legal aid for the poor, and we trust that this will follow that other Measure at no greatly distant date. In general, in regard to the social services as a whole, we ourselves intend, both in our speeches and in our actions, to support their principle and their application, and we regard the greatest menace to the social services as coming from the Party opposite, who, by their gross mishandling of the economic situation and our finances, are reducing the value of the social services and the money upon which the social services depend.

I think I may here legitimately call in the Home Secretary, who worked with me at the Ministry of Education. He is introducing more than one Measure, one of which is the Criminal Justice Bill. This, if I may put it quite shortly, is Lord Templewood in modern dress, but I hope that that very sartorially perfect statesman will find himself adequately represented in the present Home Secretary's attire. The present Home Secretary, as reported in HANSARD in 1938–39, used very generous language in regard to Lord Templewood, saying that this Bill, when passed, would be a monument to him and those associated with him through the years.

I welcome the decision to implement the findings of the Curtis Committee's report. Public opinion was very much moved by the findings about children deprived of normal home life. I am myself very critical of the Government for not having introduced this Measure before, and I think Measures of this sort which were agitated for and discussed some time ago, ought to have preceded some of those nationalisation Measures which have so much upset the economic situation and muddled the thinking minds of the country. In a final reference to the Curtis Committee's Report, I would say that I am quite ready, from my experience at the Ministry of Education, to see one Government Department responsible for these matters. If that one Government Department is to be the Home Office, I think it is a quite sensible decision, having regard to the great responsibility at present on the Ministry of Education.

I want to say a word or two on this whiff of gas which it has been decided to administer to the nationalising wolves who are following so closely upon the Prime Minister's coat-tails. The nationalisation of the gas industry is, in the columns of some of our more ponderous newspapers, regarded as a foregone conclusion. I should like to assure the Government that we do not regard it as a foregone conclusion at all, and it will receive full consideration and opposition when the time comes. Large parts of the gas industry—because it is a very variegated industry—are known to have considerable economic efficiency and to have attained to very high social standards. It is an industry in which, for example, payment of dividends is linked, up or down, with the price charged for the commodity, and in which there are some very remarkable co-partnership and sharing schemes. We have on many occasions expressed our belief in the proper use of such schemes, and we have issued a study of a scheme of this sort which I think is the most up-to-date which exists at present in the country. From my experience of studying these schemes in the industries of this country and America, I would say that those introduced for sharing and co-partnership in the gas industry are probably the most remarkable of all. I ask the Government whether, in their nationalisation plan, full security will be given to those employees in the gas industry who have taken a full part in this sharing, and are looking forward to its continuance, if the Government succeed in nationalising the industry?

Our real objection to the proposal for nationalising the gas industry, apart from any economic merits this way or that way, is that it will distract attention from the vital tasks of today. Hardly has a new Minister been appointed to be Minister of Fuel and Power than he is to be distracted, taken away from the sober work of administration to which he ought to be devoting his time, brought down and kept in committees, and kept away from his proper work of giving attention to administration. In the same way, the gas industry and the country are to be distracted. There is no doubt that at the present time the Government are quite unable to keep their eye on the ball.

Many other hon. Members will speak in this Debate and it is no part of my task to devote a great deal of time to the proposal for reform of the House of Lords. I would only say, in passing, that that is another Measure which has caused a deep impression on the whole country and has rallied an immense amount of moderate opinion against the Government at a time when they ought to have been rallying it in their favour. It is one of those further distractions which I believe may be intended to take people's minds away from the economic situation. I make an appeal to the Minister for Economic Affairs, without going further into this subject owing to its great constitutional implications, to see whether reconsideration of this decision cannot take place.

He has expressed the view in an earlier incarnation, when he was presiding over the Socialist Party conference in 1934, that he would be kind enough not to abolish the House of Lords if it did not reject, mutilate or delay any Measures of importance. On the evidence of his own Government's and his own colleagues' words, we know that the House of Lords is not guilty of any such crime. It is chiefly guilty of the crime of calling itself together in the summer to acquaint itself with the economic position and trying to give advice and guidance to the country. In return for that patriotic act, this is how the Government propose to treat it. In this House we were not, unfortunately, given a chance to come together.

I maintain that it is time that Parliament now gave the country some conception of the leadership which is totally lacking on the Benches opposite. To quote the words of Milton: The hungry sheep look up, and are not fed, But, swoll'n with wind and the rank mist they draw, Rot inwardly, and foul contagion spread. In quoting those words, I am not referring, nor were those great lines ever meant to refer, to the somewhat modest contribution which the Prime Minister made to our Debate the other day. They were written at the period of the gravest emergency in our history. They form an adequate introduction to the serious remarks I want to make now on the economic position as we see it.

Looking at the trading accounts, it is clear that at the present rate, leaving aside the slight improvement in the September returns, we are running at something like £800 million deficit. If we were to base our figure on the August return, which showed an adverse balance of £76.8 million, we should be running at £920 million adverse balance. If we were to look at the three months prior to September, we should still be running at £800 million deficit on our trading account. Those figures are higher than we have been given before. We can only hope that the September figure, with its contraction of imports and improvement in exports, running at something like £58.3 million debit, will be carried forward into the winter months and, if possible, improved upon.

Can it be improved upon quickly? The right hon. and learned Gentleman brought out his export targets. Subject to the natural criticism that we must have the markets in which to sell our goods and that we must have the price levels and costs that make it possible to sell them—in some respects the right hon. and learned Gentleman seems to have over-egged the pudding and been a bit too ambitious—I am not proposing at this stage to criticise his figures. I am only going to say that those targets cannot be achieved at once and that there has to be a delay of a considerable number of months before we reach a position when we are safe again. Therefore, provided always that the mathematical sum of the right hon. and learned Gentleman can be attained, it is this gap of time which is so grimly serious to us in this House and in the country at the present time.

What is the position? Frankly, we are living on reserves. Of those reserves, some £50 million of our gold reserves has been expended. Moreover, we appear in two months to have used some 180 million dollars, or £45 million from the sum available for us by way of advance from the International Monetary Fund. The total amount available to us for the 12 months up to next mid-September is only £80 million altogether. It means that we have already expended £45 million out of the £80 million from that source. I hope that the Chancellor, when he speaks tomorrow, will correct any of my points. We have, it is true, had a most generous gift or loan from South Africa which we ought to acknowledge, but even taking that into consideration our reserve position looks exceedingly dangerous. I want to ask the Chancellor whether, when he speaks tomorrow, he can this time give us any confidence that those who husband our reserves will do so in a very much more careful way than was done in July and August last. I ask him, when he makes such statements as he did on 7th August before we rose, and when he said: I have good reason for hoping that the August figure will be substantially less than the July figure."—[OFFICIAL REPORT, 7th August, 1947; Vol. 441, c. 1670]. however qualified and careful they may be, what reason we have for confidence that he and his advisers know what they are doing? It is really a desperately serious situation. There has as yet been no explanation of the sudden disappearance of £475 million out of our late combined credits. The Governor of the Bank of England, at one of those dinners which we associate so much with the Chancellor and the bankers, has said that this sum of money has not gone down the drain. I ask the Chancellor to tell us tomorrow where the money has gone and what has happened to it, because it is in that way only that he can restore some sort of confidence to us and guarantee to us that in the present difficult times further drains will not be imposed in one way or another on the credits and reserves which remain to us.

Leaving aside the question of our monetary reserves, I should like to ask the Minister for Economic Affairs what is the position, if he can tell us in any particulars, about our reserves in stocks. Can we have any information whether there are any stocks of raw materials in the pipeline? Many of the hold-ups in industry today are due to a total deficiency of stocks coming forward in the pipeline, so that when work of a particular character is started it is held up for this or that component or raw material. Similarly, I should like to ask the Minister of Food—we appear to be working on very narrow margins of food stocks—what the position really is. The public have only just realised, by the meat, bacon, and points cuts, that we are getting into an extremely serious position.

I have mentioned the economic situation in regard to finance, raw materials, and food. I want now to examine the position of one typical capital project, namely, housing, to see how we are getting on with that. The housing figures are terrifying in their badness. The latest August figures show that the launching of housing projects is, in the words of the Government: … not carefully related to the building progress which is made. During the first eight months of this year, the number of unfinished houses grew to the immense total of 256,000. We know what that means in social language. "The Times," in a recent leading article on this subject, said that recourse may have to be had to producing few, if any, more completed houses in 1948 and 1949 than in 1947. We should like to hear in the course of these Debates whether these figures are confirmed by the Minister of Health, and we would like to remind him of his famous speech on 21st July, 1946, when he said: I have not yet given a target for houses, and I do not intend to. I would rather have houses than targets. So would we.

Mr. Rankin (Glasgow, Tradeston)

On a point of Order, Mr. Speaker. In view of the grave language in which the right hon. Gentleman is painting the situation that faces us today, should not his colleagues keep awake?

Mr. Churchill (Woodford)

An impudent remark.

Mr. Butler

It is at least gratifying that I have the hon. Gentleman's attention. The Minister of Health proceeded with these words: But I give this promise. When the next Election occurs there will be no housing problem in Great Britain for the British working man. That is one of the typically disgraceful and irresponsible statements made by a Minister who has proved himself incompetent. When we look at the position of rural housing, we see that the figures are even worse than those I have mentioned. The houses completed in rural areas by private enterprise are some 11,624 and by local authorities some 11,393, making only 23,017 in all. This is the figure to which I wish to draw the attention of the House. Of the above, only 1,819 have been let to agricultural workers, of which 1,000 were let to agricultural workers by private enterprise.

In this position of housing and with these figures before us, how can we honestly appeal to the farm worker for the production drive which is being asked of him when we know that housing is one of the most grim situations we have to face in the countryside and that the labour situation, which is the next one, is bound up absolutely with the housing situation? I appeal to the Ministry of Health and the Minister to improve and warm up his Circular 155 of this year to local authorities, to give private enterprise an even greater opportunity of stepping into the breach when the authorities, for one reason or another, are incapable of doing so, and to implement the promise of the Government that agricultural workers were going to get housing at no less a priority and urgency than the miners.

Dealing with rural housing leads me for a moment to the position of agriculture. One is extremely anxious that the farmers and the farm workers, desirous as they are of doing their bit, will not be able to do so because they have not got the tools for the job at the present time. The Government have prided themselves very much on their agricultural policy, but I would remind them that although we agree that agriculture must have the highest priority as a dollar saver, we think the Government should not have allowed the tillage acreage to fall by approximately one million acres in the last two years. It would have made it infinitely easier for the production drive to succeed had the tillage acreage not been reduced as it has been. Moreover, it would make it much easier for those of us who are interested in the agricultural drive if we had ploughshares with which to plough the land in this hard weather. There is a distinct gap in the provision of ploughshares, modern mechanical equipment, and equipment generally, and it will be extremely unfair on the farming community and the farm workers if at a later date they are accused of not fulfilling their target when they have not had the tools put in their hands to do it. My final word about agriculture is that we must look ahead and buy the necessary feedingstuffs to supplement what we grow on our farms. The biggest dollar savers of all are the pigs, poultry and other stock that we can produce on our farms.

I do not want to linger on other industries, particularly because I want the right hon. and learned Gentleman to have an opportunity of giving a full review of the situation. I simply want to say, about coal, that the vital importance of coal for export seems to have been forgotten. Coal for export is our best hard currency, and coal for export is thrice blessed in that it brings us dollars, creates markets and also leads to European stability and fortifies our foreign policy. On this occasion I am not going to lecture the miners as to how they can do things better, or anything of that sort, but shall confine myself to this one point—in their future programme will the Government please adhere strictly to the need somehow or other of resuming the export of coal?

In general, we may say that production, whether in agriculture, the coal industry or anywhere else can be improved by humanising and by simplifying the relations between the Government and industry. The recent developments under the Coal Board and an article today by Lord Hyndley in "The Times" show us that many issues formerly dealt with on a lower level, have now been raised to a national level in the conduct of our industrial relations and affairs. The result of this centralisation is in the coal industry, and will be in other nationalised industries, the loss of that personal contact and personal experience without which there cannot be the happiest relations between management and labour. It is essential, therefore, that we should re-substitute personal contacts for an abstract inhumanity, and it is essential that Government and industry should work together at all levels, not only at the centre but right down to the local districts, through the regions, to joint consultations in the collieries.

With the aid of industry we should also make a radical review of the present position of controls. I do not claim, and I do not wish to be quoted as saying so, that the present controls should be completely removed. That would be wrong. Sir Malcolm Stewart, in a recent letter in "The Times," said that the Government should find the basic policy and leave the industrialist, with his intimate and lifelong experience, to carry on his business unfettered by controls or petty restrictions. That seems to me to be too simple a view. What is wanted is a general review of controls, both at the centre and at the circumference, and the restoration to industry of some of the duties which it could so well carry out, thus helping the Government.

I welcome the two recent notices—the simplification of the building control which now covers only some 23 components as compared with 90 previously, and also the banishment of the control over the price of wool tops. I trust that this tendency is moving in the definite direction of the relaxation of controls. If we are to move in the other direction, towards the tightening of controls, then we shall move gradually towards the loss of personal liberty and the establishment of dictatorship. Now is the time to move one way or the other, and I trust that, however serious the position is, the Minister for Economic Affairs will follow up the trend that is developing. We want, not ever greater control of ever fewer things, but intelligent encouragement of production of greater plenty.

Now, beside that, we want drastic measures to curb the present inflationary pressure, and here the Chancellor comes in for it again. The financial policy, which is at present largely working against the export drive, must work for it. It is in vain for the Minister for Economic Affairs to press his export policy when the Chancellor encourages this authority or that to go ahead with capital schemes at home which distract money or resources from our export industries. There is a vital need for a resumption of Treasury control, which has been almost totally lacking recently. There is a vital need for a capital projects budget about which we have heard so much, and I trust that when we have our autumn Budget, the need for a substantial surplus will be borne in mind by the Chancellor. These proposals for a Budget surplus, for a captial projects programme, for finance being the servant of the export trade and not its competitor—all these schemes were set out in the White Paper on full employment produced by the National Coalition Government in 1944.

The Foreign Secretary, at bay before the Trades Union Congress, permitted himself a series of very injudicious remarks about the attitude of the Conservative Opposition and about his own views on Empire policy. I will leave his views on Empire policy to my right hon. Friend who is to speak later, but on this question of full employment, I wish categorically to answer the unjust criticisms made by the Foreign Secretary and by the scurrilous literature of the party opposite with regard to our own policy. If hon. Members have examined the White Paper which we helped to fashion—and right hon. Gentlemen sitting on the Front Bench opposite know that we sat with them on many an occasion fashioning the policy in it—they will know that we supported the scheme of full employment, that we supported precisely the things which they are failing to do now. Had they summarised the capital needs of the country in a capital projects budget, we should have been in a far better position than we are at the present time. Had they, in a time of full employment, maintained a great Budget surplus so as to take off from the inflationary pressure and help the export drive, they would have been following the policy they knew all about in 1944. It is they who have gone back on the policy of full employment, and it is they who are prejudicing and making possible unemployment in the future.

However, what do the Socialist Party say? They have produced a document called "A.B.C. of the Crisis" and in it they make some most disgraceful statements about what the Tories would have done. I have attempted to show the House that we should have worked on the lines of the policy of full employment laid down in. 1944, and the Government have not so worked. What do they say next? They say in line 27 of page 15 of this document that it would be our policy to slash the social services benefiting the poor. That is, I shall show, a gross misstatement of the policy of the Conservative Party. I have shown in the earlier part of my remarks that we have been behind these very social Measures which make part of the King's Speech. We ourselves were daily involved in fashioning the social security scheme and we supported the National Health Service Bill. We were behind, and helped to fashion, the family allowances scheme. All these things are deliberately travestied and presented in the opposite way in the constituencies while the House is not sitting and, no doubt, while the House is sitting

The truth is—and I repeat this again at the end of my speech as I said it at the beginning—that the real threat to the social services comes from the maladministration of the party opposite. I would go further and say, as my right hon. Friend the Member for Warwick and Leamington (Mr. Eden) said at our Conference at Brighton, that if the Chancellor should decide to reduce the range of the food subsidies—and that is his decision and his alone—then we would be in favour of considering the incidence of such a heavy rise in the cost of living on the most needy sections of the population, whether they be the old or those in receipt of family allowances. I hope my remarks today will have done something to kill what is, frankly, a lie which is being used on the subject of our attitude generally towards the social services.

I do not think that I need spend much more time on the other inexactitudes in "A.B.C. of the Crisis"; they are all on the same level. I need mention only one remark in line 32 of page 15 where it says that it is the aim of the Tories to drive the workers to the point of starvation. My answer is: ask the workers today, in pub or club or at street corner, who is driving them to the edge of starvation. The answer will be given that it is the party opposite and their Government who are mismanaging in every way the situation with which we are faced.

I do not think I would be right, in view of the right hon. and learned Gentleman's remarks which are to follow, to go on more than a minute longer, but there is no doubt that we ourselves stand for the policy which has been travestied but which is now being rapidly understood in the country. We stand for a policy of the maintenance of full employment on lines suggested by the White Paper, on the decentralisation and simplification of our control system, for humanising rather than nationalising industry, thus giving the worker a real chance to feel that he not only belongs to, but is a partner in, industry to which he gives, but is not directed to give, his working life. The Government will get nowhere so long as they travesty our views, and fail to carry out what they themselves have professed. We dedicate ourselves to the cause not only of helping to pull British economy together, but of merging it with the wider whole in the Commonwealth, with the Colonial Dependencies, and amidst the English-speaking peoples. We have only one great target on which to concentrate our aim, and that is the greatness of Britain and her people, which this palsied and disordered Government is allowing to wither away.

4.1 p.m.

The Minister for Economic Affairs (Sir Stafford Cripps)

The right hon. Gentleman the Member for Saffron Walden (Mr. R. A. Butler) has tempted me greatly to embark upon a party speech, but I feel it is my duty to the House to lay before them the facts of the economic situation, to give them some account of the events of the last few months, and also some forecast as to the future, and I am afraid that I shall have to claim the indulgence of the House for a very considerable time, because this is a very considerable subject. I think it would be convenient if I were first to deal shortly with the happenings during what, curiously enough, from some of our points of view, is referred to as the vacation period, since the House last debated this subject, and so bring that situation up to date. After that, I propose to give some account of the various actions taken by the Government during this period, and then to pass on to the prospects that the future holds out for us and the further measures we shall have to take if we are to make as certain as we can in this uncertain world of our own economic survival.

The key to our whole problem is, of course, our overseas balance of payments, and particularly our balance with the dollar countries. As the House is aware, there are still many foodstuffs and raw materials which are only available from countries which demand either in whole or in part dollars or gold by way of payment. While, therefore, the problem of our overall balance of payments is in itself sufficiently difficult to resolve, that of our dollar balance of payments is very much more stubborn of solution, and is indeed the central problem with which we in this country, like so many other countries in the world today, face. I shall, therefore, rather concentrate on this special aspect of our balance of payment problem. When the House debated the state of the nation on 6th and 7th August last, it was announced that the Government had decided on certain readjustments of our buying programme from the hard currency countries in the matter of food, raw materials, films and other things, and a figure was then put on the projected annual rate of saving to be accomplished by those adjustments. That was actually the second reduction of our import programme that has been made, and it was then emphasised that there would have to be a sharp increase in our exports, again to hard currency markets as far as possible, if we were to achieve a balance of our overseas accounts.

I may remind the House that it was during the first six months of this year, with a rapidly rising price for imports, accompanied by our continuing inability to purchase the goods we required from outside the dollar area, that the lack of balance between the Western Hemisphere and the rest of the world showed itself as becoming increasingly serious. This lack of balance affected not only ourselves, but all other countries in the sterling area. The discussion which took place on 30th June and again on 8th July undoubtedly served to focus world attention on this dollar crisis, and on 6th August the Prime Minister announced certain dollar saving measures which we were going to take. I do not propose this afternoon to deal with any of the financial details of the situation, because they will be fully dealt with by my right hon. Friend the Chancellor of the Exchequer when he speaks later in the Debate.

There was through this period a continuing review of our imports and invisible imports, and further adjustments were announced on 27th August, including the abolition of the basic petrol ration and of foreign private travel. The steps that had been taken up to that time were estimated to bring about a saving in our programme of imports and invisible imports at the annual rate of some £228 million overall. I am going to use sterling figures, I hope, throughout, so as not to get confused with dollars. Of that sum, £200 million was in dollar expenditure. Here I must explain, what is no doubt quite obvious to the House, that these reductions could not all take place immediately. There were many forward contracts placed for foodstuffs, for instance, which had to run on and against the deliveries under which dollars had to be paid in some cases for many months ahead. Similarly, the complete ban on foreign pleasure travel did not come into force until 1st October, and, likewise the petrol ration ran on until the end of September. Although, therefore, the reductions were at the rate of £228 million a year, it did not mean that in the year 30th June, 1947, to 30th June, 1948, that amount will be saved. Some of the savings on these reductions will not be realised until the latter half of next year.

While not in any way finalising the figures for imports adjustments, we then turned to the question of export expansion, and in a speech I made to both sides of industry on 12th September, I explained that we required another £370 million of exports to reach an approximate overall—and not, be it marked, dollar, but overall—balance of payments. I pointed out that within that wider problem of the overall balance of payments lay the harder core of the dollar deficit, which mean that every effort must be made to divert goods into the dollar markets, while at the same time doing our utmost to encourage dollar saving production in this country by increasing, for instance, agriculture, and also in the Colonies and in other parts of the world where we could more easily pay for supplies of foodstuffs and raw materials than in the dollar areas.

I should here mention as a most important factor in the situation the new agricultural programme which was forecast by the Prime Minister on 6th August, and given in detail by the Minister of Agriculture on 21st August. This was designed to enable a net saving oh food imports up to £100 million a year at present prices, but it was, of course, fully realised that that saving could not become effective except over a period of years. So that, important as it is in the medium term, the agricultural programme can have little effect upon the short-term problem of the next 18 months or so. All these devices were aimed at reducing our own adverse dollar balance with those countries to whom we were obliged to pay dollars.

During this period also the negotiations at Geneva were proceeding, and we hope that they are now well within sight of a successful conclusion. Though multilateral trading in the world might seem at present to be still some way off, we still hold the view that it is a desirable objective, as are the many helpful reforms in international trading methods suggested by the draft charter of the International Trade Organisation. This Charter is designed to maintain the level of world employment, a fundamental necessity for the future of the world, and one of the most constructive international conceptions ever incorporated in a world agreement. But the more important immediate effect, will come, we hope, from the tariff negotiations which have been proceeding side by side with the Charter discussions. Though it is not yet possible to disclose what has been done, it is important that we should not be misled by the quite erroneous impressions which have been created by certain statements which have appeared in the Press.

The value to us of these tariff arrangements will be the extra opportunity the reduced United States tariff will give us of selling our goods in dollar markets. They will be a permanent benefit so long as the lowered tariff persists. In order to achieve that we shall bargain certain reductions of our own tariffs, and, in agreement with the Dominions, some reductions and eliminations of Preferences, both as granted by us to the Dominions and as granted by the Dominions and Colonies to ourselves. We have proceeded in that bargaining, as we have always stated we should, upon the basis of a fair bargain on both sides, and though we have certainly gone to the limit of what is reasonable in order to achieve agreement with the various other parties, we believe that the general agreement, when its terms are disclosed, will show a fair balance in the lowering of trade barriers of all sides.

Mr. Brendan Bracken (Bournemouth)

When will the terms be disclosed?

Sir S. Cripps

As soon as the agreement is settled and finalised, and the parties are agreed on what date it shall be, but quite soon.

The important immediate result will be better access for other countries, including ourselves, to the United States market, and so the greater chance of their earning dollars with their exports. Despite our desire for multilateral trading, illustrated by these negotiations, we have, of course, been forced by circumstances to enter upon bilateral negotiations, especially with some of those countries from whom we are buying our most essential imports, in order that we may see how far we can balance our trade with them and reach accommodation upon the financial issues that are involved, so as to reduce to a minimum the danger of a drain upon our resources of gold and dollars arising out of that bilateral trade.

I have now detailed all the non-financial steps that have actually been taken to date and we must review their adequacy, assuming for the moment that the export programme will be achieved. It is not possible, of course, to make any very accurate forecast as to how much of those exports will in fact find their way into markets which would enable us to earn dollars, or how far we shall be able to supply the actual goods wanted from us in the various bilateral negotiations which are by now, or very shortly will be, taking place. We must make some assumptions as to this in order to see how we stand. We assume, therefore, that the dollar markets were, in the normal course of events, likely to take the same percentage of the increased exports as they have been taking of the exports overall in the last few months, that is 21 per cent. of the total. We expected, therefore, to achieve a greater volume of dollar exports, that is, exports to countries which would otherwise demand dollars—it does not only mean the United States of America—but not a greater percentage.

With that assumption as to our export task and its performance and assuming our continued abstinence from those purchases which we have so far discontinued from the United States of America, and the continuance of our total import programme on its present readjusted level, we calculated we should arrive at an approximate balance of our total overseas payments by the end of next year. Again, I will leave the detail of those figures to be dealt with by my right hon. Friend the Chancellor of the Exchequer, but within this balance is concealed a much more serious dollar position from which there is no easy escape. As long as large quantities of foodstuffs and raw materials are only obtainable from dollar countries, we must either pay the dollars or go without.

We estimate that if no further steps were now to be taken, our dollar deficit, allowing for drawings by other countries of the sterling area on the most restricted scale possible for them, and also allowing for the small balancing payments which we may be forced to make in gold or dollars to other countries, will be the equivalent of about £475 million a year. That is the dollar deficit, and this figure represents the best estimate we can make. But I must emphasise that there are many uncertainties in the world position today which necessarily makes such calculations rather inexact. I thought it none the less desirable to give the House the best picture we cant I would like to emphasise here that this dollar deficit is not due to our inability to make and export enough goods to pay for such imports as we need, but rather to our inability to sell the goods either for dollars or for currencies convertible into dollars. It is none the less a continuing adverse balance which we can only meet by divesting ourselves of our gold reserve, and if we were to allow that drain to continue at the present rate we should have little or nothing left by way of reserve by the end of next year. When we speak of reserves, these reserves are not ours alone. They are the sterling area reserves.

Mr. Eden (Warwick and Leamington)

It is very important that we should see things as clearly as we can. The right hon. and learned Gentleman mentioned £475 million a year as the dollar deficit. Could he say from what month to what month he calculated?

Sir S. Cripps

I am taking that for the calendar year of 1948.

Mr. Eden

Not this year at all?

Sir S. Cripps

No, 1948. I am taking it on the basis I have given of the various changes which have so far been made. Without coming to what we may have to do yet, the 1948 picture would be that which I have given. It is quite clear, therefore, that we must take some steps to prevent this large adverse balance in dollars being realised, since we have not got the reserves with which to meet it, unless we are prepared to exhaust all our reserves and then find ourselves with no dollars, no reserves or stocks, and so unable to maintain the supplies of foodstuffs and raw materials that we must buy from the dollar countries because there are no other sources available. This state of affairs does in fact result from the world dollar shortage due to the fundamental unbalance of productivity between the Western Hemisphere and the rest of the world.

This unbalance, as the House knows, was already in evidence and developing before the first world war, and it has become immeasurably greater since the second world war due to the remarkable war-time increase in productivity of the Western Hemisphere coupled with the great decrease in productivity of the rest of the world caused by the devastation and disorganisation of six years of war—and the rest of the world, including many of the most advanced industrial nations. This unbalance was measured over the last year by an excess of exports over imports for the United States of America amounting to 10,000 million dollars. As long as the unbalance of that degree persists and as long as the Western Hemisphere is one of the few areas of the world with surplus food, raw materials and manufactured goods, the acute dollar starvation will continue unless some very special means are adopted to bring it to an end.

It was this fundamental aspect of the problem that was grasped by Mr. Marshall when he made his suggestion that America might assist in the rehabilitation of Europe if Europe would work out what was required. As the House knows, the Foreign Secretary immediately took up this suggestion and in association with the French Government convened the meeting at Paris. Unfortunately, a number of the Eastern European countries who had been invited did not see their way to go forward with the inquiry into the needs of Europe, but some 16 others did with the result that an official body, under the chairmanship of Sir Oliver Franks, worked out the conditions for the rehabilitation of those various countries in a remarkably short period of time and by the most intensive study. These were submitted to Mr. Marshall on 23rd September. Sir Oliver and his colleagues are now in Washington discussing the whole matter with the American Government.

I do not wish to make any comment on these discussions while they are proceeding except perhaps to say that they are the most momentous for the whole future of democratic civilisation in the world. It is true, perhaps, that democratic methods are comparatively slow moving sometimes, more slow moving than we should like to see them in such critical times for the world. But they are more sure and more stable in their results when once decisions have been reached. There is, nevertheless, the ever-present danger that continued difficulties and the lack of food and raw materials with its consequent tragic lowering of the living standards, may lead people, as we saw in Germany after the first world war, to adopt methods and to follow political creeds which are destructive of democracy and which accentuate those dangers of war against which we believe that a true democracy provides the greatest safeguard. It is in this broader setting of the whole future of world democracy that we must view these immediate economic problems.

I now come to what it is that we must do to help ourselves to the utmost, for it is upon our own efforts that we intend primarily to rely. It will be clear to the House from what I have already said that though it is possible for us, provided we make a sufficient productive effort, to correct our overall balance of trade in 1948 without making any further inroad into our standard of living, that is not enough owing to this postwar location of surpluses of food and raw material. We shall not on the present basis balance our dollar payments and yet we cannot, unless we are driven to it, go without the dollar purchases. From that it will be seen that the implementation of what is called the Marshall plan would be of the greatest help to us over the next few years, but we are bound to proceed upon the basis that we must help ourselves to the utmost whatever others may or may not do. Our very pride and independence make us unwilling to accept help from others until at least we have done our utmost to help ourselves. What then are the steps that we must now take? I will leave the further adjustment of our import programme to the last because it is obvious that the last thing we should do is to reduce still further our already none too high level of imports.

There are four other main ways in which we can improve our position—by producing more goods for ourselves and so saving dollar imports; by visible or invisible exports of more goods and services to the right countries; by substituting non-dollar for dollar sources of supply; and by developing our overseas resources within the sterling group and, in particular, within the Colonies. I will deal shortly with our intentions as to each of these. The most effective way of saving dollar imports is by the production of more food in this country. Food is the largest single item among our present dollar purchases and any food that we can grow ourselves will, therefore, enable us to save dollars.

Hence the critical importance of our agricultural programme. I will not deal with the details of that programme, which has generally been accepted as a sound and realistic one particularly stressing the livestock side of agriculture and so the saving of meat imports. The important point is how we are to achieve it. Labour will be a great difficulty especially in view of the repatriation of German prisoners which means that by the next harvest we shall have practically none of them left. That is the right policy, to repatriate, but it leaves us with a big labour gap which must be filled by Poles and E.V.W's but, most importantly of all, our own people. Here indeed is a vital and practical way in which any man or woman can help the country. I do appeal to all those who can to enter this most healthy, interesting and vital occupation. With the recent increase in wage levels and the assurance of stability given to agriculture by the Act of last Session the industry has become a more attractive one.

Lieut.-Colonel Dower (Penrith and Cockermouth)

What is meant by "E.V.W's"?

Sir S. Cripps

European volunteer workers. The necessary cutting down of our investment programme, to which I will come in a few moments, should add to the availability of labour for agriculture. I hope that those who may have to give up their work as a result of readjustments that we shall be making will at once show their willingness to assist our agricultural production.

Accommodation is a matter of great importance also. Special action is being taken to expedite house building in all rural areas for the benefit of agriculture, and the most urgent part of the housing programme in the future will be houses for agricultural workers and for miners. Machinery is another important factor, and, in the fourth quarter of this year, nearly twice as much steel has been allocated for the making of farm implements and tractors as in the third quarter of the year. This, despite a very high export target, should enable British agriculture, which is already receiving over three times as much machinery as before the war, to get nearly twice as much again by 1950.

The increased importation of feeding stuffs which will be essential for carrying out the plan has unfortunately been jeopardised by the bad harvests in some parts of the world, but we are anxiously scouring the world now to find adequate supplies of coarse grains. As in all other production, we must look to more economical and efficient use both of land and labour if we are to reach the target that is set out, that is the main dollar-saving enterprise at home.

Mr. R. A. Butler

I am sorry to interrupt, but could we have some ploughshares?

Sir S. Cripps

The right hon. Gentleman should blame private enterprise which makes ploughshares. The allocations of steel have been very much increased this quarter. [An HON. MEMBER: "Only now."] Well, it is better to increase them now than not to increase them at all.

Mr. Walter Fletcher (Bury)

rose——

Sir S. Cripps

I shall be such a long time, without having to answer questions, that I hope the House will allow me to continue.

Mr. Fletcher

Of the labour which is to be allocated to the land, and for which an appeal has been made by the right hon. and learned Gentleman, what proportion is going to be skilled labour and available in good time to help in agriculture?

Sir S. Cripps

I think there is a great deal of skilled labour in agriculture now. What I was talking about was the replacement of the 130,000 German prisoners, and this replacement will, I have no doubt, be as skilled as the German prisoners. This programme will not bring us in any material saving during the next 18 months: It is a longer term matter, but, nevertheless, of the greatest immediate importance to carry through.

I now come to visible and invisible exports. There is the question of availability of goods for export, the direction of exports, which is so important now, and the question of the saleability of our goods abroad, which is equally vital—and I cannot over-emphasise the cardinal need to achieve our export targets. Our estimates are based upon the complete performance of that task, and, in so far as we fail, our position will be so much the worse so far as our imports are concerned. In order to get a sufficient volume of goods for export, we need to assure manufacturers of the necessary fuel and raw materials, and also to take from the home market certain goods peculiarly suitable for export, especially to dollar countries. We have already allocated some goods, like decorated china, exclusively for the export market, and we are now going to do the same for calf leather for shoes and the higher grades of poplin and other goods which have a particularly ready sale in the dollar market. We may well have to go further in that direction, so that it will only be by an increase in our total production that we shall be able to compensate the home market for what we have to take away for export.

Viscount Hinchingbrooke (Dorset, Southern)

Who is going to produce it if they have no shirts on their backs?

Mrs. Manning (Epping)

The noble Lord has got two shirts. Let them have one of his.

Sir S. Cripps

Perhaps if the noble Lord will finish his speech, I may get on with mine. Exports will have the first priority, which means that the home market will not suffer so much, or will benefit, if we can bring about a marked increase in our total production.

So far as fuel and raw materials are concerned, it is not possible in many cases to divide these between their use for export and the home market, especially so far as coal and power are concerned. They must be regarded from the point of view of the needs of industry as a whole, and we have planned to assure industry of 100 per cent. of its requirements for the six winter months in coal, but these plans can, of course, only materialise if the coal is mined in adequate quantities and can be transported to the right places. We do, therefore, rely upon the miners for the possibility of getting the necessary volume of exports, and so buying the food which they, like all of us, must have. We believe we shall get enough coal to see us through the winter. Whatever happens, we shall try to see that industry gets its needs, and, of course, the same applies to the power stations that serve industry.

There is one point that I would like to emphasise here. We cannot succeed in our job unless the domestic consumers of gas and electricity show the very greatest restraint and care in their use of these two most valuable commodities. If the domestic consumer is wasteful in the use of electric power, then nothing we can do by staggering the load in the factories can save us from cuts and load shedding, which will disrupt our production and make certain that we fall down upon our export task. We have already had experience of that during the recent cold snap, and I want to appeal to every housewife and every user of electricity and gas to exercise the very strictest economy, even to the extent of occasional discomfort, for in that way they can do a great deal to help us in this battle of the balance of payments.

The main raw material with which we are concerned is steel, and those engaged in the steel industry are doing a magnificent job of production. Many of them are working seven days a week, which is more than most hon. Members of the House of Commons work, and they are already well on the road to their optimum target of 14 million tons. Even so, we are two or three million tons short of our needs, and yet we must do our utmost to assure the manufacturers of exports that they get what they want, not only in total quantity, but in qualities as well. Unfortunately, the allocations by the Steel Control have become disorganised owing to the fact that too much has been allocated. A committee of officials and representatives of industry, under the Paymaster-General, has been reviewing this position, and has worked out a new scheme for the control which will take some time to introduce, but which will, we hope, when introduced, ensure that deliveries follow closely upon allocation. In the meantime, we must make the best use of our steel that we can. The job we have to do is to make about a million tons a year more steel available for export than would have been used this year, and that cannot be done unless, in addition to increasing the output of steel, we cut down our investment programme, since there are no other sources from which we can get the steel.

The object of this curtailment of our capital construction programme is primarily to save steel, fuel and some dollar imports, such as timber, and, at the same time, to bring about a measure of deflation. The question of what capital construction must be postponed in order to accomplish these objects is a very difficult one. It has entailed the entire re-examination of the whole investment programme, and that, of course, as the House knows, includes not only public investment, but private investment as well, buildings of all sorts and kinds, and machinery of every sort and kind. It has entailed that entire re-examination of the programme, and in postponing the work we want to accomplish two things: first, to finish off as much work as has already been started as quickly as possible, and, secondly, to postpone only the less essential things, though, as the House may imagine, it is fairly difficult to determine priorities when there are such good arguments in favour of every item.

We have come to the conclusion that, as a first step, the annual expenditure on capital construction must be cut immediately by £200 million. This expression "capital construction," as I have said, covers all new building, whether of houses, factories, or anything else, and the provision of new plant and machinery. That means a reduction of the investment rate by some £300 million a year, compared with the expected achievement in 1948, and, of course, far more on the paper plans of industry and of the Government. I say as a first step, as there can be no finality until we see how far this will make available the resources we require. I will not weary the House with the full details of all the adjustments to be made in the very many separate departmental programmes, but there are several outstanding points with which I must deal.

Mr. Peter Thorneycroft (Monmouth)

Before the right hon. and learned Gentleman leaves the question of the cut in capital construction, could he tell us how much is in the public sector, and how much is in the private sector?

Sir S. Cripps

I cannot give the hon. Gentleman the figure because we have not analysed it into public and private sectors; it has been done by functions, rather than by who is performing the functions. The hon. Gentleman will appreciate that it would depend upon the class of factory, some of which are built by some and some by others. The points of interest are, I think, the building programme, for houses and factories in particular, the transport programme, and that for industrial re-equipment. The other details will be set out in a White Paper which we hope shortly to publish. The situation of the housing programme is that 260,000 permanent houses are now in course of construction, and 90,000 more are under contract. The Government have decided to provide for the completion of all these houses, and for their completion in the shortest possible time. The timber necessary to complete many of these houses is already in hand; 80,000 are, in fact, already roofed, and we can expect, therefore, to finish more houses in 1948 than will be finished in 1947. This will be possible because of the large number of houses in the course of erection. There is a store which the hard work of the Health Minister has accumulated, and which can now be put to good purpose in enabling us to finish more than would otherwise have been possible.

Timber, as is known, comes largely from the dollar countries, and it has been necessary to restrict the amount of timber which can be imported during 1948. Approvals of new houses during the remainder of this year, and during next year, will proceed on the basis that the number of houses which can be completed in 1949 may not be more than 140,000, and that a balanced programme as between houses under construction and houses completed will be achieved by the middle of 1949. This means that, on the basis of the foreseeable timber supplies, there will be about 140,000 houses under construction by the middle of 1949. If, of course, we were to succeed in importing more timber from non-dollar sources, we might increase that number, and improve on that programme. The whole position will be reviewed again in the early summer of next year in the light of the actual facts, and, particularly, of the timber situation as then seen.

Mr. Ellis Smith (Stoke)

With regard to timber, will my right hon. and learned Friend say whether consideration has been given to alternative methods of construction and alternative materials?

Mr. George Hicks (Woolwich, East)

Before he replies to that question, will the right hon. and learned Gentleman give me an assurance that other raw materials will be available for house building?

Sir S. Cripps

Yes, they will be matched up to the timber. Timber is in shortest supply. As regards the question of my hon. Friend the Member for Stoke (Mr. Ellis Smith), that, of course, has been very thoroughly investigated over the last few years. The Health Ministers will be communicating to local authorities the full details of these arrangements which I have only very briefly outlined, and I ask the House, local authorities and the public to await the issue of those circulars.

Work on the new towns during the coming year will, in general, be limited to the provision of basic services, though it may be that some houses might be provided in the mining or industrial new towns as part of the general housing programme. As to factories, here, of course, we are in the realm of steel construction—heavy steel user—and we must look for considerable saving from this source. We propose, therefore, to cut the factory programme to the extent required to save 30,000 tons of steel a quarter. That will mean for the present the starting of substantially very little new building, but the progressive finishing of those factories that are already under way. Here, too, owing to the difficulty there has been with steel, there are many more started than we have had the resources to finish quickly. Some factories which have not yet got their steel will have to be stopped for the time being, unless they contribute to export or some other very special purposes. We shall give a preference in the finishing to the factories in the Development Areas, for in those areas labour is available and waiting to be taken up. Other factory buildings will have to be reviewed in regard to their particular present importance to the production programme, and with due regard to the technical considerations on the site, according to the stage of construction reached. It is most regrettable that we should have to delay and postpone new construction, but we have not the resources to do more.

Mr. Sidney Marshall (Sutton and Cheam)

Would the right hon. and learned Gentleman tell us about school construction?

Sir S. Cripps

I am sorry that I cannot deal with the 19 different categories, as otherwise I shall be here all night It will all come out in the White Paper I have picked out the three or four most vital matters with which to deal.

Transport is the most difficult case, because it is a very large steel user for rails, locomotives, wagons, carriages, and so on. Moreover, it is essential that our railways should be able to carry the fuel, raw materials and manufactured goods for our production programme. It is, therefore, a priority like coalmining machinery or electric generators. We must, at least, maintain the railways and railway stock in their present state, even if we cannot start on the backlog of work that accumulated during the six years of war. We propose, therefore, to give the railways the steel necessary for a realistic 1948 programme on the basis of 600 locomotives and 48,000 wagons, apart from carriages, rails, chairs and so on. We are advised that this will be sufficient to maintain the railways, and is indeed the amount for which they asked for locomotives and wagons. We do not think they will be able to have any more for 1949, but we are going to reconsider that at a later date. For carriages we have reduced the amount asked for to 1,000 new carriages, and we have allotted 250,000 tons of steel for rails, with a supply of chairs and accessories in proportion.

There is one matter, however, in this relationship which I must mention, and that, of course, is the shortage of wagons. It is not possible to deal with it by replacement before the coming winter, and this makes it all the more vital that we should expedite repair and turn-round. The British Transport Commission has already arranged for the Railway Executive, which has just been established, to give special and urgent attention to this problem. Repair is partly in railway workshops and partly in private firms, and the Government have asked Sir Percy Mills to make a special inquiry into this whole matter in conjunction with the Railway Executive and to report upon any special measures that he considers might be adopted to expedite heavy repairs in particular.

Turn-round has been made more difficult by the very general introduction of the five-day week, but its solution lies in the hands of the railways and the manufacturers. The railways are examining their schedules to see what can be done to speed up transit and to avoid bunching of deliveries, and I ask every manufacturer who has any material volume of railway traffic to detail one of his staff to watch that wagons are promptly unloaded, even if it means weekend work, and to see that they are not used for storage. I am convinced from my own war-time experience that we could get the equivalent of another 100,000 wagons if we really tackled this turn-round problem. If we do not, it is, after all, the manufacturers who will suffer, for they will have all the frustration of delays, in deliveries which will reduce their production.

Major Legge-Bourke (Isle of Ely)

With regard to the making of new wagons, would the right hon. and learned Gentleman say what proportion are being made of steel and what proportion of timber, because I have noticed that, as a rule, the new coal wagons seem to be made of steel. I would be grateful if he would tell us which type is easier to make today.

Sir S. Cripps

I am very sorry, but I have not got those statistics at my finger tips. I am trying to give a broad picture.

Turning now to industrial machinery, we shall have to take more of this for export and leave less for the home market. How best that can be done, and which machines are of particular importance to our own industry to enable it to reach its export target, can only be worked out section by section of the engineering industry, and that is what is now being done. In that large private section of industry for which detailed programmes, of course, are not available to the Government, we want to make an appeal through all the various organisations to industry to postpone purchases of plant and machinery which are not immediately absolutely essential. This postponement of improvements is, of course, unfortunate, but it is also unavoidable if we are to get the export target that we must get. We must accept it with a determination to make the best of what we have, and to reach as soon as possible the point where we can increase our home investment, which we can only do by increasing our total production.

In this regard I would like to mention, as typical of the spirit in which we must approach this matter, a resolution passed at a meeting of some 500 managers in the cotton industry a week or two ago. They resolved: That productivity can be increased in the immediate future by an appreciable amount from 10 to 20 per cent., and on a longer view in still more substantial proportions, by a combination of three factors: (1) redeployment of labour by modern practices, including proper use of motion, time and work load studies; (2) conversions and improvement of existing machinery, and subsequent installations of new machines; (3) the application of the highest managerial skills in constant collaboration with the workers. They finally concluded with this: The conference calls on all concerned in the industry to do their utmost forthwith to change this possibility into a realised achievement. I am sure that is true not only of the cotton industry, but of many other industries in this country. If that determination to increase production with the plant we have pervades all our industries, we shall find that the difficulties of today are the creative impulses of tomorrow. Necessity is the mother of invention. We have certainly got the necessity. Let us then have a fine crop of inventiveness.

Mr. Drayson (Skipton)

Is the right hon. and learned Gentleman aware that a number of unions in the textile trade have said that if time and motion experts are introduced into the mills, they will call the operatives out on strike?

Sir S. Cripps

I am perfectly aware of the situation in the textile industry, and a great number of trade unionists have co-operated in time and motion studies.

Mr. Drayson

Not all.

Sir S. Cripps

Not all, but neither have all the managers. So far as the priority programmes are concerned, I have already mentioned that for transport we have examined the programme, and the programmes for coal machinery and for electric generating plant have also been re-examined; and apart from some trimming here and there, which we found possible, we are maintaining the priority for those programmes. In addition to the matters which I have already mentioned, there are many other detailed postponements with which I will not trouble the House. In total, the amount is £200 million a year, and those postponements will come into operation as soon as possible.

I now come to the vitally important question of the saleability of our exports. This depends, of course, upon quality, design and price. Upon quality and design I need say little, except that it is more than ever important to preserve high standards in both as the buyers' market develops and as competition becomes more intense. We have suffered from the export of some goods of inferior quality, and I do appeal to every exporter to redouble his efforts to see that British quality standards are fully maintained.

Price, however, raises points of general importance. It is quite certain that we shall not be able to dispose of our exports if we allow inflationary tendencies to run away with our price levels. Indeed, for the sake of our own people and our own home market, we need to do all we can to keep down prices. This we can only do satisfactorily by reducing our costs of production through greater efficiency and the more constant and smooth flow of materials. We have been attempting to do too much. There is so much we need to do and want to do, that it has proved well nigh impossible to limit our area of production strictly to the economic limit set by supplies. Indeed, in many materials the supply has been irregular and quite outside our control owing to world shortages. But we must now try to limit what we attempt to produce strictly within the possibilities of the materials we have available. That should help us to economise in our production processes and avoid waste of time, machinery and labour.

We must also re-examine our methods of production in the light of the latest experience so as to see how great and how rapid an increase we can get with our existing resources. This means that anything and everything which militates against maximum production must be got rid of, whether it is old habits, methods and processes or restrictions imposed for the protection of labour at a time when over-production was our danger and not, as now, under-production. There are still, I regret to say, a number of restrictions in industry which are not only unnecessary but are positively inimical to our economic survival. It is essential that they should be done away with, and this removal of all restrictions should be matched by a readiness to introduce new methods of labour deployment and machinery lay-out. Those two factors alone can give us increased production and lowered costs.

In this relation, I am glad to say that both sides of industry on the National Joint Advisory Council have agreed to postpone for another year the coming into operation of the Prewar Trade Practices Act of 1942. It is only by these methods that we shall achieve prices which will enable us to sell our goods abroad and satisfy our people at home. It will also be a means of removing the danger of the inflationary spiral, in favour of a more stable cost and price relationship. It will be of no avail if we produce the greatest quantity of goods if their cost or nature prevents us from selling them in the markets abroad.

On the subject of the direction of exports, it is difficult at this moment to be very definite beyond saying, of course, that the first priority is dollar markets. Exporters cannot go wrong in giving first priority to Canada, the United States, the Argentine and other markets in the American continent where prompt payment can be obtained for goods delivered. We hope, when our bilateral arrangements are further advanced, to get a much more accurate idea as to what exactly we can sell and where.

There are two general principles which we must bear in mind, though we must treat them flexibly. We should always attempt to sell goods with the highest possible conversion value, preferring those with the higher value to those made of the same material with a lower conversion value. That is an ideal, of course, because many of our customers want and insist upon semi-finished goods of various kinds, and we are, therefore, compelled to supply them in such cases. Secondly, we must not waste our exports by sending them in large volume to markets from which we can get no immediate useful return. We cannot afford for the present to use them to pay off old debts or to accumulate inconvertible foreign currency. It may well be that as we develop our export programme we shall find that we are forced to store up products for which we can find no useful sale, or else sell them to markets from which we can get no immediate return. In such cases we shall have to reconsider the position, and it may be that, having tried all markets, we shall have to use some portion of such goods at home rather than send them abroad for no return. It is that and similar factors which necessitate our keeping our export programme as flexible as possible.

Since the export programme was announced last month we have been in consultation with industry as to the flexibility of the tasks set, and so far agreement has been reached with about half the total number of industries. As a very large number of industries and sec- tions of industries are, of course, concerned it will still be some time before we can get through them all. Only a few industries have suggested any reductions in their task, and this on the basis that many of the foreign markets are now closed to luxury and semi-luxury goods. In the case of jewellery, for instance, 39 of the possible 46 foreign markets are now closed. This is only an example of the difficulty created by the downward spiral of trade which results inevitably from the balance of payments difficulties with which nearly every country outside the United States of America is suffering, and which leads them all to attempt to export as much as they can and to import as little as possible.

Viscount Hinchingbrooke

That is what the Government are doing.

Sir S. Cripps

That is exactly what we are doing. Other industries have suggested an increase in their tasks beyond those specified, and we shall hope 10 be able to balance the increases against the decreases so as to maintain the whole of the tasks.

There is one most important export which at present is almost negligible, but which would be of the greatest value if we could get it in sufficient quantities, and that is coal. In many bilateral deals, coal is as valuable as gold or dollars. Under the Paris proposals we have budgeted for an export of coal to Europe, after April next year, of six million tons, as part of our contribution to the whole. That will help, but there are other countries outside Europe which badly want our coal, and from which we can get valuable foodstuffs in return. It is, therefore, of the utmost importance to the maintenance of our standard of living that we should have, not only enough coal for our own use, but a really considerable surplus for export. I hope very much that the mining community will realise this fact and will do their best to give us, not only sufficient for home supplies, but also at least 10 million tons for export in 1948. Of course, we cannot at present count upon that, but we hope that we may be able to do so some time during next year.

I said earlier that we calculated our dollar exports upon the basis of past percentages. We have now re-examined the whole position, and we have come to the conclusion that we must take special steps to increase still further our dollar exports, at whatever cost to the home market. We are, therefore, budgeting to send a further £45 million worth of exports to dollar markets next year, over and above what we had anticipated in August last.

The next direction in which we must take action is to substitute as far as possible purchases from soft currency areas for those from hard currency areas. Now this we are doing so far as supplies are available and purchasable, but we cannot do a great deal immediately because the condition of the postwar world is such that outside the Western Hemisphere there is a grave overall deficiency of many raw materials and foodstuffs, as was shown by the details given at the Paris Conference.

As the House will have noted, we are hoping to make a large extra purchase of wheat from Australia, thanks to the absolutely record crop which they had this year. We are hoping to come to arrangements to get more tobacco from Rhodesia, and large quantities of fats and oils from the Colonies. It may still be possible to obtain some wheat and coarse grains from Russia; and in the bilateral deals upon which we are entering with many countries we shall hope to obtain significant quantities of timber and smaller quantities of raw materials and foodstuffs over a fairly wide area, which may relieve us of the necessity to reduce seriously imports which anyway we cannot afford to buy for dollars. The South African loan—for which we shall be most grateful—will enable us to buy from that dominion certain foodstuffs, such as fresh, canned and dried fruits. Without that loan we should have been in the greatest difficulty in being able to purchase those goods. We are, therefore, gradually managing to change over our sources of supply, but it is a slow job and is wholly dependent upon crops and the demand which other countries are also making on non-dollar supplies.

The last point, but by no means the least significant, is the development of our Colonies. Within those areas are great natural resources which have never yet been systematically tapped. This cannot give us any short-term relief, but it is none the less important for that reason. The difficulty is that this development' requires capital goods—railway materials, locomotives, trucks, tractors, and the rest of them—exactly the same as we need ourselves, and as we need for export at the present time to purchase food. The problem is to keep up the present flow to the home market and for export while at the same time being able to set aside some of those for capital development on the long or middle term. The whole question of this colonial development has now been brought within the purview of the Economic Planning Staff with a view to linking it up directly with our own investment and export programmes. As was stated in the Gracious Speech, it is our intention to introduce legislation to set up appropriate bodies to develop food, mineral and other resources in those areas, as part of our long-term plan.

I have sketched in broad outline what it is we have to do and how we propose to set about doing it. The House will have in mind that the problem of the dollar balance is not a short-term one. By the end of 1948, as far as we can forsee, the same elements of disequilibrium will be there as today, though that force, we hope, will not be quite so great. We shall still be faced, in 1949 and the succeeding years, with a large dollar deficit, and we shall still be unable to find alternative sources of supply in sufficient volume to leave us a balanced dollar account. These longer-term measures are an essential part of our present scheme, and we must remember that there is no short-term remedy.

We are proceeding frankly on an optimistic basis so far as the saleability of our exports is concerned—optimistic because, with the continuing absence of any true multilateralism in world trade, there may well be a growing tendency for all nations to restrict imports and to attempt to force their exports. We shall, of course, endeavour to frame our bilateral agreements upon an expansionist and not upon a restrictionist basis, always striving to maintain as wide an area of multilateralism based on sterling as we possibly can in striving to maintain the strength of the sterling base. If we are proved over-optimistic in our export expectations, then we shall be faced with an even more difficult position than that which I have sketched to the House.

As the House will, therefore, see, all these plans are, in effect, to buy time while we can work out the longer-term plans that can, we hope, eventually release us from our dollar deficits. I have already stated what these longer-term plans are, and together, we hope, with our increased exports to the dollar market, they will enable us eventually to balance our dollar account. We are still left, however, with a very serious deficit over the next 18 months which, if we took no further steps, would land us at the end of 1948 with our reserves exhausted to such a low level that we could hardly face the continuing deficit through the year 1949 and until the longer-term relief measures came into operation. We cannot plan on that basis. We must at the end of 1948 be in a position of independence to follow out our own policies, and we can only do that if we now preserve our resources to a still greater degree than anything we have so far arranged. We should, with all the extra steps that I have already mentioned, still be in the position of virtual exhaustion by the end of 1948.

We intend, therefore, to take further steps to economise in dollars and so to conserve our reserves. We have got to remember that whatever we spend now in dollars or gold is a hard, irreversible fact, whereas our expectation as to the future of our exports is speculation and hope. I have already mentioned that we are planning to increase those dollar exports by £45 million a year. We intend, therefore, to reduce our raw materials imports further below the existing programme by cutting off dollar purchases in the coming year by another £25 million. We anticipate a saving of another £10 million on Government overseas expenditure as a result of the further reductions in the Forces already announced. By a more rigid licensing of manufactured goods imports from America including machinery, we plan to save a further £10 million. The raw materials programme can be cut still further by £25 million, the main part of which comes from steel—which, probably, we shall not be able to purchase anyway—to the extent of £13 million, and from a reduction of timber imports by £5,000,000. The rest is made up of bits and pieces.

As regards tobacco, we have stopped all purchases of United States tobacco until further decision. We hope it will save us £5,000,000 on this year's allocation. Having regard to the stock position, including supplies bought from the United States this year which will be continued over the next month, this cut in United States purchases should not mean any immediate reduction in supplies to the public. It will, however, mean that if people smoke so much now they may be able to get very little in 1949. Therefore, it becomes more urgent than ever for everyone to restrict his consumption of tobacco. We can, however, be certain of a dollar saving, compared to our import estimates, of £8 million to £10 million by the middle of next year. These, with a few other smaller items, amount to rather over £100 million in savings for the year 1948.

We calculate that we need, in addition, a further £70 million in order to leave us with reserves at the end of 1948 which should be in the region of £270 million—and that is a sufficiently small sum, and certainly a minimum, when it has to serve as a reserve for the whole of the sterling area. And this is on the basis, of course, that everything else has gone according to plan.

I turn, therefore, to the question of our food imports. I would remind the House that these are coming in under continuing contracts, and that if—as we must do—we want to make an immediate reduction in our dollar expenditure upon food we have to reduce the distribution of it at once, and then either re-negotiate the contracts or store the supplies. In that event we shall either save dollars by re-negotiating the contract without stopping deliveries, or else we shall have in stock as a future asset the supplies that now come in. What I am, therefore, dealing with now is the immediate reduction of our consumption of food, compared with the estimate made in the reduced import programme and compared with our present rationed distribution. These reductions—I want to emphasise this with all my strength to the House—these reductions are concerned only with dollar purchases. They are only in order to save dollar expenditure. IE they can be made up by purchases for sterling from any other sources in the world then, of course, we shall make every effort to make them up.

At the present time we are living on a calorie level of about 2,870 a day on the average, compared with 3,000 before the war Averages are always deceptive, especially when the distribution has become so much fairer—as it has—since prewar days. If we maintain that level now, we can continue with it until the middle or, possibly, the end of 1948 without exhausting all our gold reserves, if all goes well in other directions. But then, unless something turns up to alter the situation, we shall have reduced our reserves to about the minimum operable level, and shall have nothing further to help us fill the dollar deficit. In that event we should have to cut savagely at our standard of living, and moreover, we should be in such a weak economic position that we should be almost forced to accept any conditions that were imposed upon us for any help that we were offered. That is a prospect which the Government are not prepared to face if by any means it can be avoided.

We believe, therefore, that there must be some immediate further reduction of our dollar expenditure upon food, which if we cannot replace it from elsewhere will, with other changes brought about for quite other reasons, reduce our standard to just below 2,700 calories a day, which though highly unpleasant, should certainly not be disastrous, and that will enable us to make a further saving of about £66 million a year in dollar expenditure. In making these adjustments in our imports, we have had to take into account the fact——

Mr. Eden

We should very much like to have some indication of the foodstuffs and other things the Government have in mind.

Sir S. Cripps

I shall give all the details. In making these adjustments in our imports, we have had to take into account the fact that we have unfortunately suffered the grave misfortune of a bad potato harvest. We must take strict measures to see that our supplies of potatoes last out till the next crop is available. The way in which this saving will be effected is by making the following reduction in consumption. Sugar will revert to eight ozs. a week from the 10 ozs. to which it was recently raised. Meat will remain at is. a week. Bacon will remain at one oz. a week, and there will be a saving on eggs which will enable a distribution to be made of 66 shell eggs, compared to 58 last year, with an earlier exhaustion of dried egg stocks. This reduction in our supplies of Canadian eggs will not make itself felt in a reduction in the number of shell eggs merely by the consumers of shell eggs, but will have a very severe effect on the amount of processed eggs which can be made available to the baking industry. The public must expect many fewer and much less attractive cakes and buns.

I have now laid before the House the steps that have been taken and will be taken to deal with this most stubborn problem of our dollar balance of payments. From a mere balance of payments point of view, of course, the more we decrease dollar imports the better, but we must weigh the balance of payments arguments against the health and welfare of our people and their morale. Whatever we do, therefore, is in the nature of a compromise, and within that compromise we must, I think, be rather weighted on the side of maintaining than on that of reducing our standard of living. If circumstances improve, if matters are eased generally, for Europe and the world by the adoption of some scheme under the Marshall plan, then we can always reconsider the matter, and if necessary increase our imports again. But once we spend the extra dollars they are gone, and the product of them is irrecoverably consumed. It is, therefore, I am convinced, necessary for us to take this step of further adjusting our consumption and imports forthwith.

We hope that the weather this winter and next spring will be kinder to our own agricultural production, and that with the general revival of non-dollar sources of foodstuffs and raw materials we shall be able to contemplate improvements next year. How far we can achieve those improvements will depend largely upon our own efforts in production of every kind, coal, food, steel and manufactured products, but also upon the world harvests. One thing is certain, we can only use our reserves once. If we allow them now to be rapidly depleted, we shall face the possibility of wholesale hunger and unemployment. This we are determined to avoid if we can. The longer term plans will take time to develop, and in the meantime we must not eat up our gold reserves.

The result of all these measures will be to improve our position so that by the end of 1948 our dollar deficit will, we hope, be running at a rate not greater than £250 million a year. The task which thus confronts the people of this country is a heavy one, but is one which we must carry on our own shoulders. Our fellow countries of the sterling area have faced these common problems with great understanding, and in a most helpful spirit. We shall each have to play our own full part, if we are to make our way safely through our difficulties. It is a long road, and there are no short cuts. But though the road is long and hard, it provides a prospect which should inspire all of us to do our best.

It is not merely our economic survival with which we are concerned; it is something even more. We are in every sense fighting the battle of democracy as much as we were during the war. Our struggle is to maintain the decent standards and the freedom that our ever-expanding democratic experience has taught us, in circumstances in which it is only too easy for more violent and totalitarian methods to prevail. If our economy and that of Europe should collapse, our democracy will in all probability collapse too, and will disappear, and with it will go the last stronghold of Western democratic civilisation in Europe. The question that confronts us is whether we as individuals can discipline ourselves to the task that lies before us, or whether we are going to invite the harsh discipline of events to impose some tragic solution upon us.

It is a condition of our success that we should acknowledge unreservedly the common human factors that bind us together as a nation. We are not all equal in capacity for the same job, nor do we all share the same views, but all of us have the capacity to help our country in its hour of trial. It is the recognition of this factor which will enable us to weld our whole nation into a living team, inspired by a spirit of high endeavour and enduring courage. And let no man stand in our way, whether he be owner, manager or worker, or even the black marketeer. Our needs are too imperative, our condition is too urgent, to allow any restraint or restriction upon our power to save ourselves. That power we have got, and that power we as a people must use.

This is certainly no time to talk of dictatorial methods, for it is for the survival of our democracy that we are struggling. We need the most complete understanding and consultation throughout the whole national team, Government administration, industrialists, technicians, staffs and workers; but we must not let outworn methods of democracy, suitable perhaps for easier times, impose upon us delays that may well be fatal. It is easy enough, perhaps fatally too easy, to call for compulsions of every kind to cut short the methods of democratic consultation—but not in that way shall we save the fundamental freedoms enshrined in our democracy. It is by adapting our democratic methods to the speedy and quick solution of our problems that we shall prove their efficacy and reinforce our strength.

We have now, in our machine of planning, arrangements for that consultation in all the higher levels. That machinery must now be perfected right down to the floor of every factory. Nothing in my view is more important for raising our industrial morale to the high pitch which is necessary than this joint consultation amongst members of the team. Where it is working now, as it is in many production units, all parties are loud in their praise of the results. This is, in my view, the prime necessity for conditioning our people to the task that lies ahead of them.

We are not asking the impossible, though we do not under-emphasise the troublous times through which we must pass. We shall find our way through to a brighter and more prosperous future all the quicker if we devote ourselves single-mindedly to our country's interests. Many of us may have to suffer discomforts and privations; that is the price that we are now paying for two victorious world wars fought within a single generation. Others have paid a far higher price than we are asked to pay. There is not one of us who is not acutely aware today of the high hopes and splendid ideals that inspired so many of our own people to make the supreme sacrifice in these wars. It is for us to carry on those torches of democracy which they bore to death on the field of battle. We can bring them to the door of the temple of their hopes if only we will live with the same spirit of devotion to our country that they so willingly showed. I wish that today our country could refresh its heart and mind with a deep draught of that Christian faith which has come down to us over 2,000 years, and has over those centuries, inspired the peoples of Europe of fresh efforts and new hopes.

It is that spirit and not our own material hopes and difficulties that can be the most potent source of our inspiration, call it by what name you will, self-sacrifice, honour, love or comradeship; it is the strongest power in our lives and at this moment of deep difficulty in our history we need its supporting strength as never before.

5.33 p.m.

Viscount Hinchingbrooke (Dorset, Southern)

The Minister for Economic Affairs has just told us that the supreme economic crisis in which we now find ourselves was brought about as a result of two wars. If that were so, ought we not to have seen the nadir of that crisis when the last shot was fired in 1945? From the moment when demobilisation began and our men came back to our factories and fields ought there not to have been an increase in prosperity and general uplift? Instead of which the Minister now comes down to the House, two years or more after the end of the war, and announces proposals of the utmost gravity which affect us all in more or less degree.

The Minister for Economic Affairs has given us a long and detailed speech today. I do not know when I have heard a graver speech or one carrying more serious import. I am not for the moment concerned with any of the numerous proposals which the right hon. and learned Gentleman made. His main purpose is clear. It is to carry through measures which will result in a more catastrophic fall in our standard of living than we have ever seen before. He talked about the Marshall plan. He said that we must do the utmost to help ourselves. He did not meet in any way the criticisms now arising in the United States, which must be mollified and assuaged if we are to get any aid from the Marshall plan. He said nothing whatever about work. He said nothing whatever about hours. I pay him the tribute of one remark in which he talked about the removal of restrictions upon output, and for that we are grateful. Instead of meeting the United States criticisms, and instead of preparing himself to receive aid under the Marshall plan, which he professes to want, he seals our frontiers against the import of American goods, thus infuriating the exporters in the United States, who may well carry their complaints to the White House.

What ought we to do? Our policy ought to be the absolute reverse of the right hon. and learned Gentleman's policy. We ought to throw open our fronties; state that we are a great importing nation once again and accept investments from all exporting countries. Why do not we do that? The Government are afraid of the tags which might be attached to such a policy. They are frightened that nations which might invest in our industries would require security for their investments. Nationalisation might disturb that security. So they seal Britain off from external aid. The people of this country will go cold, hungry and miserable because of the Government's determination to nationalise.

The right hon. and learned Gentleman talked about the direction of exports. What is he going to do? He is going to extract by force the products of businesses great and small and, somehow, sell them in foreign markets. I would like to register my conviction that that policy will fail, and fail as disastrously as the personal failure of the right hon. and learned Gentleman hitherto in the realms of Russia and India and the leadership of the House of Commons. His policy of directed exports extracted by force is now to be carried down to the smallest industrial unit, which never before had any previous contact with the world overseas. These units are to be isolated from their surrounding economy of town and country. Their wares are to be projected abroad to places where they have no sales contact at all. They are to be assisted somehow by the great trading Departments of the State who have already failed so lamentably in bulk buying and in bulk selling.

It is a policy altogether against nature. I believe that it is going to carry this country to the very depths of poverty. It is a policy which has never succeeded in all history. Let the House mark that. Only one previous attempt has ever been made at directing exports and that was by Dr. Schacht. We went to war to oppose the philosophy and outlook which underlay Dr. Schacht's actions. In the nineteenth century, our businessmen expanded their business worlds in concentric circles from their localities. They satisfied their immediate neighbourhoods. They satisfied a widening area through the county and then the country, and only when their markets there were filled were they drawn to venture overseas and carry their goods to foreign lands. There is no other way in which to establish a permanent, desirable and satisfactory export trade than by floating off that trade on a superabundance of goods at home.

I would like to speak of the financial implications of the right hon. and learned Gentleman's proposals. I regret that the Chancellor of the Exchequer has now become the second string to the Minister for Economic Affairs whose overseas budget now seems to dominate our affairs. Our national finances and the ability of the Treasury to control those finances are regrettably put into a secondary place. What is going to be the effect of the policy of the right hon. and learned Gentleman? Inflation is going to rise in this country to an alarming extent. We are going to cut off our imports by some £200 million, and we are going to increase our exports by some £400 million. There is talk of an autumn Budget to account somehow for the inflationary position that will arise, I regret I shall be away at the time and perhaps the House will forgive me if I say now a word or two about the financial aspect. Are we really going to be faced with extra taxation to meet the deficit?

Mr. Leslie Hale (Oldham)

A few minutes ago the noble Lord the Member for Southern Dorset (Viscount Hinchingbrooke) reached a most interesting stage. He started to refer to work, hours and wages, I thought he was going to tell us what is his view about them as I am most anxious to know the view of hon. Gentlemen opposite. At the point he was interrupted by the noble Lord the Member for Horsham (Earl Winterton) who used the phrase "insolent brute" in reply to a remark from my hon. Friend the Member for Peterborough (Mr. Tiffany).

Earl Winterton (Horsham)

I should like to call the attention of the hon. Member in question to the use of the word "tripe" by his hon. Friend when my hon. Friend the noble Lord the Member for Southern Dorset (Viscount Hinching- brooke) was speaking. I would ask you, Mr. Deputy-Speaker, whether it is in Order for an hon. Member, even of the low standard of civilisation of the hon. Member opposite, to use such a word in Debate?

Mr. Hale

May I say that tripe is a most popular commodity in my constituency. It is highly respected and we would like more of it. Perhaps down in Sussex it is not so well known.

Mr. Deputy-Speaker (Major Milner)

I did not hear the expression to which reference has been made, but I think we might have a little less heat.

Dr. Morgan (Rochdale)

On a point of Order. Now that it is admitted that the noble Lord the Member for Horsham (Earl Winterton) did use those words "insolent brute," surely you, Mr. Deputy-Speaker, will rule on the matter. I ask you whether it is not an unparliamentary expression, and, if it is not, I would ask you to request the noble Lord to withdraw the phrase "insolent brute."

Earl Winterton

Let me assure you Mr. Deputy-Speaker, that when an hon. Friend of mine is speaking and an hon. Member opposite uses a disgusting phrase about that speech I shall call him an insolent brute.

Dr. Morgan

Further to my point of Order. We must after all, act according to the methods of the forum. The noble Lord the Member for Horsham said deliberately that whenever a certain expression is used which offends his dignity or his ear he will continue to use such expressions as "insolent brute." Is that Parliamentary?

Mr. Deputy-Speaker

I must point out rudeness on one side is no excuse for rude-ness on the other.

Viscount Hinchingbrooke

I hope later to refer to the subject of work mentioned by the hon. Member for Oldham (Mr. Hale). I was speaking about the forthcoming Budget and I was telling the House that in my view extra taxation will be quite intolerable. As it is there is all too little financial incentive throughout every walk of life. Builders, and miners today are talking about working four (Jays for themselves and one for the Government. Are they soon to be talking about working three days for themselves and two for the Government? Then there is the question of indirect taxation. We are told that we are going to have increased Purchase Tax on articles of every sort and kind. On imported articles it will only result in stopping the flow of trade, for Purchase Tax on imported articles is as bad as tariffs and customs. It will tend to isolate our economy and to drive us into intensive economic nationalism. What is the effect of indirect taxation going to be on home produced goods? It will lead to the stopping of the production of goods which are vitally needed at the present time. What folly it is to think of these things purely in fiscal terms. Economists are always talking about drawing off the purchasing power of the people as if the British people were cattle to be milked and as if State finance was the only thing that mattered. The people need incentives to produce the goods to absorb the money they already have. [Interruption.]

Mr. Shurmer (Birmingham, Sparkbrook)

On a point of Order. The noble Lord the Member for Horsham (Earl Winterton) has made a statement telling me to "go back to the land of my birth." [Interruption.] I was born an Englishman and I have worked all my life in this country.

Mr. Pritt (Hammersmith, North)

I heard what the noble Lord said. He is perpetually making such statements. He said "Go back to Tel Aviv, the place of your birth." He is notoriously anti-Semitic and he has got to be stopped.

Mr. Shurmer

I am as good an Englishman as the noble Lord. He never did any work in his life.

Viscount Hinchingbrooke

I am glad this House is enjoying itself. If I may, I will proceed. I will draw to a conclusion all the sooner.

Mr. Pritt

Further to the point of Order. It is very serious indeed to have anti-Semitism in this House. I heard the noble Lord the Member for Horsham and he will not deny that he said, "Go back to Tel Aviv"—that is a Jewish town—"the place of your birth." We have heard the noble Lord saying such things many a time, and I must, with the greatest respect, ask you, Mr. Deputy Speaker, to rule on such a saying.

Mr. Deputy-Speaker

I did not hear exactly what the noble Lord said, but these personal references are all objectionable.

Earl Winterton

I have a rule in the House that when a speaker on my side of the House is speaking and is grossly insulted by interruptions opposite, I invariably reply and I will continue to do so.

Mr. Deputy-Speaker

The noble Lord will permit me to say that if he replies there is no necessity to be rude.

Earl Winterton

I am most grateful, Mr. Deputy-Speaker, to you for your advice, and in future, whenever I hear an observation of an insulting character directed from the other side of the House I will call your attention to it.

Mr. Tiffany (Peterborough)

On a point of Order. May I make an apology, because it appears that the remark which I made at the very commencement caused this trouble. Therefore, may I make an apology, because I used the word "tripe," which was an insult to the material and to the people who eat it.

Viscount Hinchingbrooke

I was about to utter a final sentence or two on finance. In my view it is imperative that there should be a reduction of £1,000 million in Government expenditure this year, including reductions on subsidies. As my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) said, there should be consequential remissions in taxation to take care of the pensioners and the needy. I believe in Mr. Gladstone's famous phrase, "Let the money fructify in the pockets of the people." Extra taxation at this time is quite useless. It is the worst weapon which the Government could possibly use. The right remedy is to raise the bank rate very considerably in order to attract money which disappeared from this country in the summer and to which already reference has been made. Also we must attract into the banks some of the cash that now resides in the country and which adds to the inflationary position. We must reduce taxation, release controls, let the price mechanism operate; and hold wages, salaries and dividends at their present levels until circumstances ease. I greatly fear that we shall get nothing but the wrong measures from this Government of most miserable and most uncourageous men.

I want to devote the latter part of what I have to say to the effect of centralising legislation upon the economic liberties of the people. I do not believe that the day will dawn again for Britain until the power-gathering legislation of Governments is halted and reversed. I specify no political label. It is a 30-year trend. Tories have taken part in it, Coalitions have taken part in it, and the present Socialist Government are carrying it to extreme lengths. I say that I do not think we shall sec the light until repealing legislation is passed transmitting back to the people the economic liberties which have been wrested from them.

What is the object of government? The best definition I know is that of the Fathers of the American Constitution. They said that the object of Government was to promote life, liberty and happiness. They went on to say that if any government arose which was destructive of those things, it was the duty of the people to alter or to abolish it and to institute new government which would best promote their safety and welfare. I believe there is now awakening in the country a sense of that duty. There are many who say that our people are not concerned with economic liberties and that they infinitely prefer to be provided, not to win for themselves, but to be provided with social security and a regular job at maximum wages. But, Sir, life itself is not like that. Such a policy on the part of a government is an admission of educational defeat. If a father brought up his son in those circumstances he would produce a lazy, weak, selfish and, finally, embittered man. Can we not have wisdom and restraint in government? Ought not His Majesty's Government to be a wise father to His Majesty's subjects?

The Minister of Health has said that he has found that the British people are docile and that they will accept directions. The argument ought to be thrust back into his teeth. The function of government is not to produce docility and obedience. Rather is it to provide the right framework of laws to contain a vigorous and inspired people. The Minister of Health is wrong—dangerously wrong—in that as in much else. The people of this country under the present weight of legislation are getting restive. I firmly believe that if our people do not get the right framework of laws from this Government they will destroy the Government in order to get it. If they do not do so, it is, the end of us. We shall become a weak and abject race.

Hon. Members opposite do not see how nationalisation and the planned economy are steadily sucking the power of personal choice from the people and are projecting it upon the bureaucracy. It is producing all kinds of terrible and undesirable effects, including what Professor Lionel Robbins in his recent book neatly calls apoplexy at the centre and apathy at the circumference. Personally I do not believe there will be be any revival in British life and trade until bureaucracy as such is ruthlessly cut back.

If hon. Members want an object lesson in the horrors of a planned society, let them go to Germany. They will find there a military government composed of men of the highest quality and attainments. They will also find an economy distracted and brought low by war, and held down by the planner's art. Military government is the worst of all forms of government. It effectively stamps out freedom and initiative. In Germany, arbitrary rule is 20 times more severe than it is here. I say what I am about to say after profound reflection and I hope with a due sense of responsibility. If Germany is surviving at all it is because the laws are disobeyed. Eighty per cent. of German trade is in the black market. If there were no black market in Germany trade would be reduced to one-fifth. The black market is the measure of German determination to revive in spite of oppressive laws.

I argue the parallel between Germany and England on the plane of the effect of excess government upon freedom and trade, and not at all upon the plane of policy as to whether we should hold down Germany or lift her up. In this country we are moving strongly towards a scientifically planned economy backed by the State and by the police. That is only one degree less bad than miltary Government.

Mr. Stokes (Ipswich)

There is nothing scientific about the Government in Germany.

Viscount Hinchingbrooke

I do not know whether the hon. Member for Ipswich (Mr. Stokes), who has just come back from Germany, as I have, had the same impression as mine, but I did discern the faintest signs of life. I was glad to see the reference to Germany in the Prorogation Speech: My Ministers have persisted in their efforts to establish true democracy in Germany and have encouraged a gradual transference of power to the German people. Why do His Majesty's Government not intend for Britain what they intend for Germany? Why do we not read in the King's Speech for the new Session of establishing a true democracy in Britain? Why is there to be no gradual transference of power to the British people?

Nationalisation is not a transfer of power. It is a deprivation of power. It is a complete paradox to talk, as the Lord President does, about public ownership and control. Neither the miners nor the people own or control the mines. The Minister controls the mines, the Coal Board controls the mines. Messrs. Lawther and Horner in their way control the mines. Those gentlemen are not the miners nor are they the people. There is no such thing as public ownership and control. The nearest we could get to it would be to decentralise and denationalise the mines into small democratic groups of managements and men in the mining areas. By so doing we would safeguard consumer choice through the competition arising among those groups. That would be group ownership and public control, and on that path lies progress. On the present path lie ruin and disaster for our people. What are we doing? We are pyramiding power upon power and department upon department with scientific planning boards and all the rest of it as a superstructure. We are leaving millions of the King's subjects without incentive, without initiative, and without freedom of choice.

The black market is growing. The Minister for Economic Affairs asks for co-operation to stop it. I say that with every additional exercise of power by the Government the black market will increase. Of that there is not the slightest doubt. These are serious words, and I have reflected deeply whether I ought to speak as I do. I have decided I must do so. Now why is this? I will tell the House. In war it is different. In war we have a collective sense of purpose, but in peace things change. Purposes are diffuse. We have already passed the point in peace where private moral sense compels observance of current Statute laws. The Americans discovered that the only remedy for gangsterdom arising out of prohibition was to repeal that particular amendment to the Constitution. What did they achieve by doing that? They again interlocked the citizen's sense of justice and morality with the sanity and wisdom of the law. We must do the same. The Government must retreat over the whole no-man's-land of illegal trading, otherwise it will become a hideous battleground between the police and otherwise normal, honest, British traders.

Why are we trying to reform the currency and restore the price structure in Germany? Precisely for the reason that commercial chaos reigns. It is inevitable that it should reign under the edicts of military government. Let me give the House a military analogy. Behind the muzzle of the gun all is order and perfection. The generals sit in their offices, their brigadiers command the troops, and units move to their allotted tasks. But what is in front of the muzzle? What is at the end of the trajectory? Chaos, disaster, death. A planned economy produces order for the producer, and for the producer alone. We all go to our offices and jobs, and, as producers in organisations great or small, the thing works. We carry out Government instructions. We obey the voice of higher authority. All is well ordered and well planned. But as consumers our lives grow increasingly chaotic. The home is increasingly disturbed and distressed. The daily round is one of increasing shortages, longer queues and growing misery.

The proper function of Government today, now that the war is over, is to drive back the power of the producer, to retreat itself, to allow the consumer to have his way and rest the whole process on the middle line of the market. We are getting nothing in that way from this Government. Nevertheless the soldiers in Germany are learning that though their ways may be suited to war, they are not suited to peace. They are making praiseworthy attempts to let the impartial mechanism of the market take over the rule of German society. They are retracing their steps because they have learned that the policy of a planned society has run out to its limits with the result that the laws are thwarted and honest trade is at a standstill. They have learned that the cure for shortages, queues and consumer misery is not greater control but less control, not more laws but fewer laws. The Foreign Secretary has reports of all these things in his table. Why does he not send them to the right hon. Gentleman and to the Chancellor or the Exchequer, and why do they not implement the same policy at home that they are about to carry out in Germany?

Peace is much too precious a thing to be entrusted to the scientific planners. With very notable exceptions the men who make succesful war become their country's enemies afterwards. Peace is a matter of delicate adjustment between the producer and the consumer, with a market as a balance. War planners extol the producer, destroy the market and stamp upon the faces of the consumer. Our country is already suffering, and it is about to suffer much worse. We are suffering from a Government which employs people who learned dangerous things during the war. What is the remedy? I admit that government must concern itself with the casualties that arise from laissez-faire. I admit—indeed, I insist—that Government must suppress the monopolies that arise from laissez-faire, but between the two, let us have laissez-faire. Let us have it full-blooded, uninhibited, and unashamed. It is the only way we shall ever restore the fortunes of our country. It is the only way that Britain will ever become prosperous and great again.

6.6 p.m.

Mr. Daines (East Ham, North)

I propose to try to direct the House back to the realities of the problems of the present time rather than to go into an excursion on economics that might have had some validity at the end of the last century but have very little validity in the light of the circumstances we face today. The Minister in the latter part of his speech called attention in rather minor emphasis to a major fact that will hit this House, the Government and the people of this country. In the past he and many of his colleagues have tried to dramatise the situation with such phrases as, "The Battle of the Gap," or "The Battle of the Balance of Payments," but the stark fact that we have to face—and this is the real emphasis I want to put on that section of his speech—is that during the next few months that lie ahead this country will be engaged in a veritable battle for food. It is possible for me, particularly with Ministers who like to dramatise the whole situation in one phrase, to coin a phrase and say that this is a battle against starvation. That may be slightly overdoing it, but clearly running through that part of the Minister's speech and in other information that is available is the fact that we shall be forced down to a nutrition level where production itself may be affected because of the lack of vitality in our people. In the light of that circumstance, which it is up to the Government to challenge, all the arguments that are produced about basic petrol, films and tobacco shortages are irrelevancies. When the people of our country realise to the full, as they are bound to do in the months ahead, that it is a question not only of variety of diet, but of whether there is actually enough sustenance in order that they can go about their daily life with spark and vitality, all these questions will seem comparatively unimportant.

There are two forms of rationing. There is rationing that is imposed by controls and so on, and there is the other form of rationing which the noble Lord the Member for Southern Dorset (Viscount Hinchingbrooke) apparently wants to encourage, under which those who have money can dictate what quantity they will have. I hope I am not going to be misunderstood in the way I present this next point. So far, the people of this country have gained from the Government fair shares in food, increased old age pensions, and the implementation of family allowances plus full employment. The ordinary people in this country, so far, do not feel, and are not likely for some months ahead, to feel the implementation of the other policies upon which the Government has embarked. Therefore, their reaction to the Government, both now and in the months ahead, will lie upon these simple facts.

I want to submit that if there is any cut in food subsidies or if prices are not pegged in a rising market of food prices, we are bound to have a deterioration in the morale of the people with disastrous effect on their relationship with the Gove- rnment. Food subsidies were adopted during the war as a palliative by the Coalition Government because the people were led to believe by one of the first acts of the Coalition Government that not only was there to be conscription of human life, but there was to be conscription of wealth as well. In fact, there was never conscription of wealth, and the wealthy emerged substantially in the same position at the end of the war as when they entered it. The palliative in order to correct this maldistribution of wealth was the policy of food subsidies, and I say bluntly that despite all arguments of out-of-date economists, to me as a Socialist, which I proudly proclaim I am, food subsidies are a legitimate instrument of Socialism for the redistribution of wealth.

Let me take another aspect of the legislation that has been carried through. Almost by common agreement, though may be not on detail, the House recognised that a new policy was necessary in the country in regard to the health services. We are to spend next year some £180 millions on setting up a health service. What is the use of setting aside a great expenditure, of creating an organisation, of trained men and women to fight disease if, at the same time, by allowing food prices to rise substantially, we destroy the basic nutrition which is a major factor in the fight against disease? I would suggest, too, that implicit in this question of food subsidy is also the whole policy of bulk purchase. If food is to be allowed to rise according to the market, we cannot have the careful calculation of effective demand that we can have under a system of stabilised buying. I want to tell the Government quite clearly and emphatically that many of us on these benches are prepared to support them in drastic action, but what we are not prepared to do is to support them if there is to be any substantial cut which will affect the standard of life of our people.

Let me put briefly what I think will be the logic of events if the Chancellor of the Exchequer gives way to the rising clamour as far as subsidies and food prices are concerned. If he fails to peg, let alone make cuts, then it is inevitable that with rising world prices we shall have a substantial all-round demand for wage increases. I want to be quite ruthless and realistic on this point. The position can only be met, and he knows it as well as I know it, by the enforced production of unemployment as a counter against that demand. That is a policy upon which the Government may embark. Then there comes another point which has to be faced. The reason why the Government have the power they have today is because of the continued organised support of the working-class movement. That power, in turn, rests upon the simple fact that there are more jobs than there are people to fill them, and once a margin of unemployed is produced, then the very roots of the political power of this Government immediately shift and pass to the enemy. This consequence of events is implicit in the question of the cost of living of our people, and I want the Government not only to stand firm against this constant rising pressure for a cut in food subsidy, but to stand firm and see that the food subsidy is increased so that the working people, ordinary people, decent people, can get the minimum standard of life. I want to put my position quite bluntly and simply to the House. I believe increasingly that economic circumstances will drive this Government along the road where the rewards of society have to be given to the people who are doing the socially necessary and useful work.

I understand that tomorrow the Chancellor of the Exchequer will most likely address us. I am not going for a holiday like the noble Lord, I hope to be here to listen to the Chancellor, but perhaps a word in advance to the Chancellor may have some effect so that we can have fresh points of view brought to bear upon inflationary pressure. Because I have offered my very humble words of advice to the Government on the policy that they should pursue, at the same time I recognise that the effect of the policy enunciated by the Minister for Economic Affairs is bound to mean that that inflationary pressure will increase in this country. Where I believe the Chancellor has gone wrong is that he has followed the traditional lines of tackling this problem only from the point of view of taxation of income. These are revolutionary times and we must have revolutionary action. We must have new and novel methods to face up to the position, and not be afraid of new ideas.

I believe we want a tax on inflated capital values of stocks and shares. Too long have sections of the community got away with it by cashing in on, and turning into income the new capital values that have been created. I know there are consequential factors that have to be faced. There is the racket to which my right hon. Friend the Minister of Health has had his attention directed, but of which he cannot find the solution—the racket of the terrifically increased prices of houses for people to live in on the owner-occupier basis. The House knows, of course, that a house costing £900 in 1939 today is fetching £4,000 with vacant possession. That is being cashed in on, and that in turn, to some degree, is being turned into consumer goods and the inflationary pressure follows. I submit that the Chancellor need not throw up his hands and say that that evil cannot be tackled. Why cannot we have a valuation of the house made in 1939? Our district valuers can supply us with the figures. Why not have a rapidly rising Stamp Duty on value over 1939 values? It is a perfectly practical proposition. The argument of the Chancellor, that if you apply a new form of taxation it must take in the whole field and that you cannot apply it because some will escape, is illogical and unrealistic. I listened to that argument carefully on the betting tax and it simply astounded me. He might as well argue that because some of the community avoid payment of Income Tax, we should all avoid it.

May I also direct his attention to the growing practice that is clearly revealed by the "spiv." I do not like that word; it is considerably over-done. I have some sympathy with the "spiv" because he is only doing today what so many so-called legitimate traders did before the war and said it was good practice. Dealing with the problem as a whole, we have many people in this country going around with huge wads of notes using lock-up safes of depositories, and having as much as £10,000 or £20,000 in £1 notes, which they are afraid to put through the banks in case evidence is produced and they could be tackled on Income Tax matters. We were told in the 1947 White Paper that there was £1,000 million more money about than there were goods to supply.

Turning to the economic side of the proposals of the Minister for Economic Affairs, I believe that pressure is going to be substantially increased, and this very tendency is bound to go on. The Minister of Food, in the operation of his various controls in such businesses as horticulture and the bringing of tomatoes to London and so on, finds a terrific field in which the black market is operated. The time has come when we should put our pride in our pockets and have a fresh note issue, call the lot in, and make them account for it. That was done on the Continent, and it was highly successful; in fact, in Czechoslovakia and Belgium it has been one of the major factors in stopping inflationary pressure. I have my own view about certain actions the Chancellor has taken, but I hope he will give serious consideration to this matter.

I wish to say a word or two about the gambling racket. The argument which was produced on the occasion of the last Budget is not good enough in the light of the serious situation with which we are faced today. The gambling racket can be tackled by taxation if we have the will to do it. There is no intelligent reason why we should not have a 20 per cent. special tax on every "tote" which operates. If the argument of the Chancellor is that it is going to be unfair on the "totes" as against the "bookies," let him go to the track owners and ask them to devise a way of putting the tax on the "bookie" when he is on the stand. That is a perfectly practical proposition. There could be a stand tax commensurate with the 20 per cent. tax on the "tote" which would give a double draw-in. A really effective system of taxation could be devised, and it would be a practical measure of counter inflation.

Lieut.-Commander Gurney Braithwaite (Holderness)

Will the hon. Member develop the interesting argument a little further? I agree with him that betting ought to be tackled, but what would he do when all betting was done in the streets and in public houses as it would be?

Mr. Daines

I would tax them there. I should recognise it. I think it is implicit, and I am prepared to face it. I will tell of an extraordinary incident showing how incomes can be made on dog tracks. I spent three or four nights last year on dog tracks when trying to sell this idea to the Chancellor and I found that the chap who did better than anyone was the fellow with the little bucket who moistened the "bookies" sponges. He was making about £3 a night. I do not mind that but what does appal me is that the Chancellor of the Exchequer is such an innocent in odd financial affairs that he does not know these things go on.

Whatever the desire of His Majesty's Government, the economic events we face are bound to compel them to follow the road more and more of placing their confidence upon the working people of this country, and I believe the working people are prepared to respond to a right lead, but only if they are completely convinced and satisfied that there is going to be social justice and that to the people who are doing the work is going the true reward. I have full confidence in His Majesty's Government as long as we have clear direction and clear leadership.

6.27 p.m.

Commander Noble (Chelsea)

I feel sure the Chancellor of the Exchequer has been given a great deal to think about by the hon. Member for East Ham, North (Mr. Daines) and no doubt the hon. Member will get his answer tomorrow from the Chancellor himself. I was very sorry not to have an opportunity last night of following either the hon. Lady the Member for Epping (Mrs. Manning) or the hon. Member for Loughborough (Mr. Follick) who spoke of the Empire, because I was particularly glad to see in the Gracious Speech the statement that a Measure will be laid before you designed to promote the expansion of production of all kinds within the Empire, and to hear what the Minister for Economic Affairs had to say about that today as a middle-term, or long-term, solution. We are all glad to see this Bill on the Order Paper today. It had been hinted at by the Minister of Food during the Parliamentary Recess, and we shall all be very interested to see what is in the Bill. I think the House will agree that it has been a little difficult during the Recess to appreciate the situation in regard to the Empire. The Foreign Secretary said that he favoured an Empire customs union, whatever that may mean. We read that when Burma gets her independence she will not be within the Commonwealth, but of it. We also read in the papers, and have had confirmation of it today from the Minister himself, that there is to be a change in Imperial Preference.

I wish to make a few non-controversial suggestions in regard to the development of the Empire. I would like to see what the Minister said today extended, if possible, to the Dominions, for I feel that in this connection we are at a most important crossroads. Probably a very great deal of what I say tonight has been said many times before, and it would be impertinent of me to think that that was not the case. Perhaps, instead of asking the Minister to consider what I say, I should ask that it should be reconsidered. Using the phrase of the Foreign Secretary, we do not so much want a Customs union in the Empire, but an economic union, not only in the Colonies, but for the Commonwealth as a whole, which can consider the allocation of manpower and capital in relation to the distribution of raw materials and food supplies. In such an economic union the United Kingdom would have a similar position to any one of the Dominions, and there would be, of course, adequate representation of the Colonies.

There are many reasons why this is an opportune moment to consider such a union. I think it is fair to say that since the last war there has (been as good understanding between the Dominions, the United Kingdom and the Colonies as ever before, if not better. Our own economic position, as we are told many times outside the House, many times in side the House, and again by the Minister today, calls for some drastic steps to be taken. My right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler), emphasised the gap we have to bridge, and that has been elaborated a great deal by the Minister. As he said, it is all very well to increase our exports, restrict our imports and increase home food production, but are those exports going to be maintained, and can we get rid of them when the world famine has been satisfied, and the sellers' market comes to an end? Our exports have changed tremendously since 1913. We now export a very different type of goods from what we did then. After the world famine of goods, that may change; will we be able to change our exports in the right direction? When the markets are satisfied, what exports will we have to replace them?

I am sure it is a platitude to say in this House that the Dominions and Colonies are under-populated. It is well known that the area of the Dominions is 77 times that of Great Britain and that the white population is only twice that of Greater London. The Dominions and Colonies perhaps in the past have been satisfied to act, as one might say, as the farmyard of this country, but now there is a tremendous trend there towards industrialisation, and that needs capital and more manpower. I read the other day that there is now a Food Commission going from this country to Australia to assist in developing long-term food production programmes. One might quite fairly ask why they did not go two years ago. One might also say how much better it would be if it formed part of an over-all economic union as I suggested, and the Commission went to Australia with the authority of this country and the Commonwealth to allocate manpower and capital in accordance with the distribution of raw materials and food supplies. I think this a fair suggestion, especially as one reads that Australia at the same time says she cannot play her full part in this production unless she has more supplies of British machinery and workers.

Mr. Hale

I have a great deal of sympathy with the point the hon. and gallant Member is adumbrating, and if I am fortunate enough to catch Mr. Speaker's eye, I hope to deal with it; but how does the hon. and gallant Member propose to deal with the problem of Canada, where we have the greatest adverse balance of trade of any country in the world? We are not antagonistic to them, but we are not supplying the goods at the moment.

Commander Noble

I will come to that in a moment, if the hon. Member will allow me. There are two other small points I would like to develop. I think it has always been taken too much for granted that the United States are economically predominant. There is in the United States as great a variety of resources and territories as there is in the British Empire, but they have the advantage that they all form part of one large continent which has been developed as an economic whole. The other day in America, shortly after announcing his plan, Mr. Marshall at a Governor's Conference, referring to the resultant action that was being taken in Europe, reminded the Americans of the development of their own Federal Union. He spoke: of the doubts and difficulties which preceded the final union of the colonies, of the remarkable productive effort which followed on the solution of the early difficulties, and of the high degree to which the States have continued to maintain their own individual personality and institutions. I feel that we might take a lesson from that.

To answer the point raised by the hon. Member for Oldham (Mr. Hale), I would not like to put forward too many details. Obviously this scheme must be a very flexible one. Canada, which he mentioned, might not even be in it, but might be the link between us and the United States in the same way perhaps as this country might be the link in the scheme between the United States and Western Europe. As my last point on that aspect, I would like to say what a good investment such a union would be for those who live in the dollar area.

There is one other very important point to which we are led quite naturally, by what I have said. I refer to the problem of Defence. We are continually told, sometimes by the leaders of our Forces in this country, that the next war will be a press-button war started by a blitzkrieg about which we hardly dare dream. The atomic bomb as we have seen it in its elementary stages—as the House knows the hon. Member for Uxbridge (Mr. Beswick) and I have seen it—has shown us what sort of position we would have been in in this country in the event of an atomic war. We are rather inclined to forget, and perhaps try to forget, that there ever may be an atomic war and that we might well be involved in it.

Two years after the end of the Japanese war very little progress has been made towards world agreement either by the Atomic Energy Committee of the United Nations or the Military Affairs Committee. We might say that we are just as far from world agreement now as we were two years ago. Presumably during the last two years every country concerned has been doing what it can and making all the progress possible. We are told that in atomic warfare, be it cities, be it ships, or be it industries, dispersal is the answer. If that dispersal is ever to be thought of or planned, an economic Empire union such as I have suggested is absolutely essential to the plan. Australia was very soon to see in the last war that she should become as independent as possible. The Royal Air Force training in Canada was even then another example of dispersal. How much more necessary it will be on another occasion.

Before I conclude, as I will not be able to speak again in this Debate, I would like to refer to the Amendment on the Order Paper in the name of my hon. Friends and myself with regard to the Armed Forces. I will confine my remarks to the Royal Navy. We heard today new figures of manpower for the Royal Navy which before we had only read in the newspapers. Earlier this year when we debated the Naval Estimates it seemed to me that the limiting factor was finance. Now it suddenly seems that things have gone the other way and the limiting factor is manpower with the resultant disorganisation which may be seen in the cutting down of ships at sea until the Home Fleet is practically non-existent. I feel that in the next few days we shall hear of other cuts of ships at sea. It was most noticeable today that the Minister of Defence did not refer to the Pacific. I cannot help wondering when this change from finance to manpower was made. I think we ought to be told.

I cannot help wondering what we shall hear on the financial side when we consider the Navy Estimates for this Session next year. We are told that the cutting down of the number of ships at sea is going to be temporary, even transitional. I only hope that that is the case. If the Navy is deprived of training at sea now for any length of time it will suffer for a considerable time to come. I think that is quite obvious to hon. Members in all parts of the House. To refer again to the Estimates for this Session, I only hope that the First Lord will find sufficient provision for the very necessary new construction which must begin soon, and which we must have. As well as provision for keeping ships at sea now, we must have modern new construction for the future.

6.42 p.m.

Mr. Leslie Hale (Oldham)

The hon. and gallant Member for Chelsea (Commander Noble) has spoken thoughtfully and instructively. With much of his remarks I am in complete agreement. I would like to say quite sincerely, that I think those who speak of Empire customs union are not facing up frankly to the very obvious problems that arise from the industrial competitive state we have now arrived at between ourselves and the British Commonwealth of nations. Canada, of course, gives us almost our most adverse trading balance and, for practical purposes, our most adverse dollar balance because it is in the dollar area. That is partly, indeed, almost wholly, the result of geographical considerations. Partly it is because of our failure to try to negotiate and to supply the goods they need. If I follow the hon. and gallant Member for a moment on that head, it is merely to stress the remarks he has made. There is a vast area in British Columbia ripe for development. Seventy-five per cent. of the population of Canada live within a very short distance of the American border. In the more remote States, the Western States, they are in the habit of shopping in America almost weekly. Their nearest towns are over the border, they buy American magazines, and they are familiar only with American goods.

In some of our industries we have failed to make a great effort to capture that market—for example, in boots and shoes. We make boots and shoes of the highest quality in the world, but we still do not send to Winnipeg the sort of footwear needed there. Instead we send the sort of shoes which are very desirable in Ottawa. In the course of my short stay in this House, I have once or twice suggested that we should establish an Empire Consultative Parliament. When I was in Canada I talked on this matter with members of the State Legislature and members of the Dominion Legislature. This body in its initial stages would have no legislative function, but a right of access to all sorts of information and a right of consulting about all matters affecting them. It has always seemed to me regrettable that the members of the Commonwealth have taken no part in the administration of Colonial affairs and, indeed, are not really previously informed about developments. There might be opportunities for a Pacific condominium with Australasia. The problem of relations with South Africa raise very special and rather more difficult problems. I had not intended to deal with that subject, but I feel that it is important. The constant efforts that I have made in this direction are even' reflected on the back benches opposite and an interest in the Empire is beginning to show.

I do not want to follow my hon. Friend the Member for East Ham, North (Mr. Daines), in his prognostications about what the Chancellor of the Exchequer may say tomorrow. I cannot for a moment think that the Chancellor has ever toyed with the idea of a substantial reduction in food subsidies, for three reasons. First, it would be bad Socialism; secondly, it would be what is tantamount to the same thing, bad economics; and thirdly, I do not think that the back benchers on this side of the House would stand for it in any case. If I were to prophesy what the Chancellor of the Exchequer is doing tonight, I would suggest he is sitting at home by an empty grate studying "Dalton on the capital levy" and extracting information of importance on that very important subject.

I rose tonight to talk about an even more important subject, a subject which has occupied far too little attention in this House recently and which, I think, will occupy more Parliamentary time in the future. I refer, of course, to Oldham. I think it right, and perhaps it is the best way of approaching this problem, that we should try to face some of the implications of our plans in the constituencies, and some of the administrative consequences. A Government may have great political success and still be an administrative failure. There have been various references to the Civil Service with which I completely disagree. I think the Civil Service has been loyal, generous and helpful. No one has ever suggested that the British Civil Service was designed for speed. Certain circumstances make us get through, but delays are the almost inevitable consequences of a system of check and counter-check, indeed of a system of democratic government. The very essence of democracy involves a certain measure of delay.

I am really concerned about the effect upon employment and production. To quote a brief example from my constituency. We have there, for the first time in history in peacetime, full employment and good wages and a fair share of what is going. But one of our particular problems is that we have some 750 disabled men unemployed. They are men registered on the Disabled Persons Register. I raised this question in the House some considerable time ago. In June, 1946, I received the very pleasant tidings which I conveyed to my constituency that Collins's Mill, a derelict mill then used as a store, was being taken over and adapted for the employment of disabled persons. I was told—though it is now said that I never was told that, and there could only have been a misapprehension between me and my informant—but I understood that I was told that it would be open by October, 1946. It is not open yet, and I have asked Question after Question, and the explanation has nearly always been a different one. They are considering the terms of the lease, there is a difficulty about the coal shortage, or they have not been able to get possession.

I remember during the war at a place where some clients of mine were working there was a factory across the road in use as a store, and, when they wanted more space, they walked in and chucked out the stuff, and got inside. It was not their factory and it was not their stuff, since it belonged to the corporation, but I came along one week later and they were manufacturing the goods inside. I understood that there might be some legal consequences, but I was told that was precisely wht they had a solicitor for. I believe the Government ought to consider that when 250 or 300 men are losing work week after week, are finding themselves unemployed, when goods are not being produced, some more urgent administrative action is wanted. We want to get a system by which these things can be put right. [An HON. MEMBER: "Private enterprise."] It was not private enterprise; at least, it was technical private enterprise, with controlled supplies of goods and controlled orders from the Government, and if that is supposed to be private enterprise, I have no objection to it at all.

I ask the House to consider one extremely important matter in my own constituency concerning a private enterprise firm—Messrs. A. V. Roe—which is, an exceptionally good one. They employ 7,000 men on the borders of my constituency and two or three thousand more from near by. In this matter, my information comes entirely from the workmen and shop stewards. I say that only because I would not like the employers to get into trouble with the British Aircraft Corporation for having communicated with a Socialist Member, but the facts are not in dispute and they demand attention. I am dealing with aircraft that are made very largely for export, and which sell at about £120,000 apiece. The Tudor aircraft was on the drawing board in 1943, and they had a full scale model by 1944, and a final mock-up—that is not really a prototype; it is made of ply wood, and is a full-scale model for the purpose of checking up on the various operational aspects, on the planning, on a section of rivetting and so on. That was ready by June, 1945. The Tudor aircraft was ordered by B.O.A.C. for use on the North Atlantic route on the basis of 4,000 air miles for a normal flight at 25,000 feet. It has never been tried on a North Atlantic route for the purposes of B.O.A.C., who decided to give it a trial, and it was flown from here to Nairobi without any tropical adjustment; with a self-sealing petrol system which was unsuitable for tropical use. It has been subjected to modification after modification, and I ask the House to listen to me because this is an important matter. It is impossible to produce a single aircraft in three or four years and leave it there. There must be a production line following on, and, if there are modifications on the original plan, it merely means holding up the whole production line.

When I went to this factory a few days ago, I saw 20 or 30 Tudor aircraft in various stages of construction standing there. This was a factory which, in the height of the war, turned out 30 or 40 bombers a week, and which is today turning out very few a week. The men are dispirited, and worried about their future, and so are their employers. I am told that plans have been passed and modification after modification insisted upon, with different people dealing with the same thing at the same time. The colour of the paint on the ladies' lavatory was not what was required, and so it was repainted. The situation of the bracket that holds the glass was considered not to be in a desirable place. The electric switches were subject to constant interference, and this is not a small point, because if one alters the electric switches on an aircraft, one has to alter the whole electric wiring system from start to finish, because one cannot leave loose electric wires about. These things are not small matters, because they involve considerable alteration. It was decided that the windows should be lowered by one and a half or two inches, and then, again, the design of the Tudor was originally altered, for a reason I find it impossible to understand, for 12 sleeping passengers instead of 24 sitting passengers. It may be that there are people who can afford to pay double fares for the sake of sleeping at night while crossing the Atlantic. I would not know.

The Tudor aircraft has cost this country many millions of pounds. It represented the highest technical achievement in pressurisation. I apologise for the word, which is not my word. "Pressurisation" is a word which has been coined to mean the preservation of normal ground conditions in aircraft flying at great heights. I am told that this particular firm received from the Ministry of Supply the greatest possible assistance and help, and that the whole resources of the Ministry were placed at their disposal in this extremely important matter. There are still these aircraft standing on the supply lines waiting for a decision. Air Vice-Marshal Bennett, of the British South American Airways Corporation, took one of these aircraft on the most successful flight for years on the longest journey that can be undertaken in a normal aircraft service. It is no good people saying that 4,000 air-miles are regarded as inadequate for the North Atlantic route, because that is the more distant one. Air Vice-Marshal Bennett reported favourably after his flight.

I believe that the facts in this case, which I am willing to submit in full to the Government at any given, time, demand a full departmental inquiry. I was assured by the men that they are not to be consulted, and I was also told that they had laid down a procedure by which they will receive only one person from British Airways and one from the company. The men are very concerned. Their skill, energy and ability as well as the gifts of the brilliant designer who lost his life in a Tudor crash, are being wasted, and these men are all concerned about their future.

Mr. Maclay (Montrose Burghs)

Would not the hon. Gentleman agree that the Tudor was actually ordered by the Minis- ter of Supply, and not directly by B.O.A.C.?

Mr. Hale

There was consultation between the Ministry of Aircraft Production and the Brabazon Committee and B.O.A.C., though I think it is right that the aircraft was ordered by the Ministry of Supply. Negotiations have been conducted by B.O.A.C. and their predecessors so far as the modifications are concerned.

I want now to ask the Minister for Economic Affairs a question about textile machinery. This question is really vital, though I do not want to say anything to embarrass the Minister, because I appreciate the difficulties. The right hon. and learned Gentleman has given us a very careful, able and full survey of the situation. I am speaking on behalf of the people who have to do the work. Textiles used to be about a third of our exports, and today they are about a fifth or a sixth. Textile machinery is undoubtedly an important export, but at the most today it does not command more than £18 or £20 million of our exports. Now, we plan to export over £250 million of our textiles, while I am told that we have in the mills at Oldham looms made in 1899 which are still in operation, slowing down every year, increasing in danger every year, taking more out of the operatives every year. There has got to be a planned programme of replacement, and I hope the right hon. and learned Gentleman is going to give his personal attention to this important matter. I know that I am not suggesting something which is new to my right hon. and learned Friend, but I want to emphasise its importance.

That brings me to the firm of Platt Bros, and Company Ltd., operating at Oldham, who employ several thousand men, and who used to employ something like 11,000 men. In the days of the war, they had a joint production committee. Production was tremendous, and organisation was good. The feeling between the workers and the employers was good. But that joint production committee no longer functions. I want my right hon. and learned Friend seriously to consider whether he cannot make joint production committees statutorily obligatory, and give them certain functions which they can perform, including a right of access to the Minister, and a right of access to all rele- vant figures and documents. I am making no attack on the firm of Platt Bros, and Company Ltd., of Oldham, which produces a high-class product, and has a big turnover. The relations there between the men and the employers have been by no means unsatisfactory. But, recently, there have been changes, and there seems to be a little strain between the men and the employers. There is a real feeling of industrial trouble coming to this very important industry. I am now speaking with great seriousness and am not exaggerating the position, as I understand it, one bit.

Some two years ago Piatt Bros, and Company Ltd. took over a factory at Barton, which, I understand, was allocated to them by the Board of Trade. They took it over to deal with certain classes of textile machinery, including carding machinery. They have never employed more than a bare few hundred men there, but they are planning to transfer their business from the works at Oldham, which used to employ 11,000 men, and which could easily employ many more, to the new factory at Barton where, by competing with one place against another, they hope to achieve some benefit.

This is a very serious matter. The day has gone by when under this or any ether Government, directors should be allowed to deal with the destinies and the lives of men, and their future, with barely any consideration, and with nothing more than a bare announcement at a hastily summoned meeting to the effect that "We are going to re-man our industry on geographical lines with regard only to the finances of the question." I hope that my right hon. and learned Friend will have a full inquiry made into this, and I am instructed to make him the offer by the employees of Piatt Bros, and Company Ltd. at their Hartford and East works that if joint production committees are restarted, they can iron out the bottlenecks, and will produce as much, and more, as is being produced at the moment by all three works. This will release the Barton factory for the production of mining machinery and other necessities and will turn over several hundred men to more useful purposes. I really believe that within the industry there is still a possibility of expansion.

I believe, Mr. Speaker, that this is the first time on which I have addressed the House when you have had occasion to look at the clock. I will end on the note that the textile unions have played the game well, as have the employers. At recent conferences at Buxton, trade secrets were pooled and patents were disclosed. There is a general intention and desire to co-operate together in rebuilding this great industry. It is on textiles alone that my right hon. and learned Friend can hope to succeed in his plan. No other industry has the same potential of expansion; none can hold the sellers' market longer, and in no othter is there more chance of reciprocal bilateral trade being established. I ask my right hon. and learned Friend to consider the matter himself, or through his very able Parliamentary Secretary—or, rather, I should say, his ex-Parliamentary Secretary—who has always dealt with these matters in a very helpful way. I hope that my right hon. and learned Friend will pay very special attention to the textile industry, and to the matters which I have raised, and that then he will have more chance of achieving his aim this time.

7.5 p.m.

Mr. Osborne (Louth)

There is only one point in the speech of the hon. Member for Oldham (Mr. Hale) that I wish to take up. He said that he did not think the Chancellor of the Exchequer dare tackle the problem of food subsidies. He gave many reasons for this, one of them being that his own back benchers would not permit him to do so. That is a new form of democracy, I suppose.

Mr. Hale

That is the latest form of democracy. I do not know what the hon. Gentleman means by "a new form," but if he means cracking the whip against one's own conscience, that does not apply on these benches.

Mr. Osborne

I would remind the hon. Member for Oldham and other back benchers opposite that, at the start of the war, food subsidies amounted to something like £50 million per annum. The Chancellor of the Exchequer, in his second important speech, and at a time when these food subsidies amounted to £345 million per annum, said that they were far too high, and that he would have to bring them down. If hon. Members opposite would only read the speeches of their leaders they would know these things. I understand that today food subsidies represent £425 million per annum. Therefore, the Chancellor of the Exchequer has got to go back on his own policy, or disobey his back benchers. I think that tomorrow the hon. Member for Oldham will find that he is in error.

I am glad to see that the Minister for Economic Affairs is back in the House. I believe we all agree that he is the outstanding Minister, both for ability and integrity. He made an extraordinarily fine speech this afternoon. If this country must have a Socialist Government, I am sorry that he is not the Prime Minister. I have one important complaint to make against the Gracious Speech. It is that the right hon. and learned Gentleman himself did not write it. There is no sense of gravity or urgency in it as it stands—none of the sense of urgency that the right hon. and learned Gentleman put into that last quarter of an hour of his speech. If he had written the Gracious Speech, it would have been a very different document. When the men and women in the factories read the Gracious Speech in their newspapers, there was nothing in it to jerk them out of themselves and to make them say, "We must do something." In fact, it was the same as when the Prime Minister made his speech over the wireless just before the Recess. The general opinion among the work people the next morning was that the crisis was not so bad after all, and that they had thought it was a lot worse. There was no response because there was no appeal.

As I see it, what is wrong with the Gracious Speech is that there is no clarion call in it saying, "Wake up England or it will be too late." The right hon. and learned Gentleman could make that appeal; indeed, he is the only man on the Government Front Bench who could. It was a great pity that he was not asked to the microphone in place of the Prime Minister. The nation, to my mind, needs frightening into a sense of its awful economic peril. For far too long——

Mr. Gallacher (Fife, West)

The hon. Gentleman sounds like a partisan.

Mr. Osborne

I should be proud to be a partisan in some countries. For far too long we have lived in a fool's paradise, and the nation has to be shaken out of its complacency. We do not realise what are our prospects. I beg the Government to say to our people, as the right hon. and learned Gentleman partially said towards the end of his speech this afternoon, that, after six years of devastating war, the whole world is poorer. We as a nation are poorer in a poorer world. Therefore, even if we are to maintain the standards that we had before the war we have to work harder and not less. There is no one on the Government Front Bench, except the right hon. and learned Gentleman, with the courage to say those unpopular things. If they are not said now, in twelve months' time it will be too late.

What are the facts? As was said by one hon. Member, the basic facts come down to food. I would like to put these three important facts to the House. I have the honour to represent an agricultural constituency, and I know from the farmers there that owing to the weather—nothing to do with the Government or foreign politics—the harvest this year is about 75 per cent. of average. That means that unless we can import more, we are going to have three bites of food for every four bites we had last year. Why not tell the people? Why fool them for so long? The cuts that have been announced so far are only a preliminary. We are in for a very grim winter—such a winter as this country has not known for 100 years.

The second point I wish to make is that there is no chance of our getting any food from Western Europe. The "Economist" about a month ago gave these remarkable figures. It said that food production in Western Europe is about 63 per cent. of normal, and that there are 21 million more people to feed. We cannot get any food from Western Europe, and even if we could we ought to be ashamed to take it. The third fact is this: We ought to tell our people that—as I understand it from American statistics—the maize and corn harvest together will be about 3.8 thousand million bushels as against 4.4 thousand million bushels in the previous year. Even if we had the money to pay, the food is not there. Finally, the Argentine are today sowing 12 per cent. less wheat acreage than last year. The whole world is on the verge of starvation, and we are fooling about. We are fiddling while our civilisation goes from us.

I would like to say a few words on our domestic position. I am connected with the wholesale grocery trade in a slight way. The Ministry of Food have announced that during period 5–that is, between 7th November and 5th December—there will be no tinned meat issued at all. Why not tell our people so? Why hide these unpleasant facts? That means that our meat imports at the present tine are running at about 2,000 tons a month as against 15 thousand tons some time ago. That means less food and more hunger, and the sooner we wake up and face these ugly facts the better.

The other fact which ought to be brought home is this: There has been no household dried milk issued to the general consumer public and no evaporated milk to catering establishments this year. We had large issues in September and November last year, and we are not likely to get any this year. It is no good saying to our people, "Work or want" in that half-tone. We should say, "Work or starve—all of us"—and the sooner we say it the better.

As I understand it, we have a deficit of £600 million a year. We are overspending. We are living beyond our means to he extent of £600 million a year. The Government are trying to meet that deficit by cutting imports of raw materials. If they cut too deeply, mass unemployment will result. Let us face that fact. If they cut food much more we will not be able to do our jobs. But there is still a chance for us to bridge that gap in our own way. At Southport the Foreign Secretary said that our national income was £8,200 million a year. We are £600 million short. Ten per cent. more would give us £820 million—more than we require. I think my figures are correct. The tragedy is this. There seems no one in authority in this country who can go to the people and say, "We require 10 per cent. extra output. If you do not produce it your wives and children will starve." There is no one on the Government Front Bench, except the right hon. and learned Gentleman, who so far has had the moral courage to put these ugly facts before the Government's, supporters.

Mr. Shurmer

Oh yes, they have.

Mr. Osborne

I expected that. That is; just what I wanted. The Prime Minister did. He went to the miners about 10 weeks ago and said, "I want you to work an extra half hour a day. It will solve our problems and it will save Europe from Communism. Please, comrades, do an extra half hour, if not for the sake of your country, for the sake of your Socialist Government." As far as I know, they are still thinking about it. It is true he has put the facts before them, but what is the response? Nil. [HON. MEMBERS: "Oh, no."] Substantially, the response to the appeal has been nil. They are not working the extra half hour. Perhaps they will be, but in the meantime eight or 10 weeks have gone by.

Mr. Janner (Leicester, West)

When an appeal of that sort is made, why does the hon. Gentleman constantly decry the efforts of the Government to put things right?

Mr. Osborne

I am not decrying the appeals of the Government.

Mr. Janner

Not here, but in the country.

Mr. Osborne

What I say here is what I say in the country.

Mr. James Glanville (Consett)

The statement which the hon. Gentleman has just made is absolutely contrary to the facts. The miners held meetings last week, and some decided to work the extra half hour and others decided to work on Saturdays. The hon. Gentleman knows nothing whatever of what he is talking about.

Mr. Osborne

I am obliged to the hon. Gentleman for his courtesy. The Prime Minister—the leading Socialist of the nation—appealed to his own supporters nine precious weeks ago, and they have just started to make up their minds.

Mr. Hale

The miners have broken all records during the last fortnight. The response has been magnificent.

Mr. Osborne

And there are 50,000 miners in Scotland on strike unofficially at the present time. I am sorry that these narrow party points have been brought in to the Debate. Our position is too tragic for us to play party politics. I am asking the back benchers opposite to have the "guts" and the courage to do what the right hon. and learned Gentleman has done.

Mr. Shurmer

The hon. Gentleman said that we are not telling the people in our constituencies up and, down the country. He is not in a position to accuse Members for other constituencies.

Mr. Osborne

All I can say is that if hon. Members opposite have been putting the case before their own people, they have got a remarkably poor response. If their appeals had produced the desired results, the country would not today be facing such a tragic situation. What this Government lacks is a moral urge, the conviction that we could do this thing if we took our coats off and really worked. I am convinced that for too long we have been living in a fool's paradise, and it has now come to an end.

I think it was suggested that I had not put these points to the Government. May I remind the House that at the beginning of the year I raised the question of football pools, and said that 70,000 girls were engaged in football pool offices when they ought to be employed in textiles. I said that the question was: Did the men of this country want pools or clothes. At the end of the Debate the Minister of Labour, like Pontius Pilate, washed his hands of the whole thing and said it had nothing to do with him. That is what I am complaining about—lack of moral courage. Before we rose for the Recess— and this is my last word; I am sorry I was interrupted so much—on two occasions I asked the Lord President of the Council how the Government proposed to get out of the desperate economic situation in which we now are. On the first occasion the Lord President of the Council accused me of spreading gloom and despondency; and on the second occasion he accused me of being a defeatist, merely because I wanted him to make the country face the facts. I say that with the exception of the Minister for Economic Affairs the Government are not worthy of the confidence which the ordinary workingman of this country put in them. If we still have a Socialist Government on the occasion of the next Gracious Speech, I hope the Minister for Economic Affairs will write the speech himself, because then at least I should know it was honest, and the country would be made to face the facts.

7.22 p.m.

Mr. Mallalieu (Huddersfield)

Hon. Members on this side of the House always appreciate the rather hurt earnestness with which the hon. Member for Louth (Mr. Osborne) approaches the problems of the world and of the rest of us from time to time. Tonight he complained that in the Gracious Speech there was no sense of gravity, no sense of urgency. Well, in his speeches there is always a great deal of gravity and a great deal of earnestness, but unhappily there is not always a great deal of sense. The hon. Member begged the Government to present the people of this country with the facts, and the grim facts, which face us during the coming winter and perhaps for some years to come. I would certainly back that appeal, but I hope that what is presented to the country is not what the hon. Member for Louth says but the facts, because the hon. Member for Louth, more than any other hon. Member of this House to whom I have listened, has the great propensity for putting across facts which are wholly incorrect. He seems to have fallen into that bad habit again tonight in his very uncalled for and untimely reference to the miners, to which attention has already been drawn.

I was a little disturbed—as were most hon. Members on these benches, and perhaps in other parts of the House—about at least one aspect of the programme announced this afternoon by my right hon. Friend the Minister for Economic Affairs, namely, the programme which he outlined for housing. I know that there has been tremendous pressure from many sources to cut down the housing programme as part of the necessary cuts which we know must come in the capital construction programme. That pressure has come from economists, most of whom have got houses of their own, and usually large houses, which they are not even willing to share.

They are people who, on the whole, look at things from a paper point of view. I hope that in any approach which our Government make to housing they will not ignore the paper point of view, but will superimpose upon it what I can only call the human point of view. In my opinion it would be absolute folly to make any avoidable cut in the housing programme so long as we continue to allow capital construction which seems to ordinary people to be less necessary.

I do not know what will happen about the building of the new House of Commons. It is only a little point, but it is one that tells a lot. It would be folly to carry on with the construction of the new House of Commons at the present time, when we are cutting down on hous- ing. We do very nicely in this Chamber. Of course, it would be nice to have our own Chamber, but it would be a great mistake to continue with it at the present moment. Similarly, it is a great mistake to continue with the building of the new Government Departments along the Embankment. I know that is still going on because I tried to work this morning against the blare of the electric drills. That sort of work ought to be stopped long before we think of cutting into the housing programme. The same applies to such capital construction as the widening of the main Portsmouth-London Road, where a huge amount of work is being carried on. The same applies to the capital construction work on reservoirs in my own West Riding of Yorkshire, for, badly needed though they are, they are not so essential as houses.

There are serious practical points to be considered, quite apart from the ordinary common one of discomfort. We are going to transfer men from one part of the country to another in order to increase production, which we all know is essential if we are to combat inflation. How can we transfer men from one town to another if we have not the houses in which to put them? How can we expect a man to give of his best?—and I resent some of these lectures which are being given to working people, saying that they should work harder—how can we expect a man to work harder and give of his best if he is living, as are so many people in my own constituency just now, four or five in a damp basement? We shall not get the best out of people—whether it is ourselves or anybody else—unless they are given that reasonable comfort and peace of mind which come from a decent house. Therefore, I beg the Government to think very carefully before they make any serious curtailment in the housing programme.

Like everybody else in the House, I was greatly moved by the feeling which the Minister for Economic Affairs put into his peroration this afternoon, as he did once before in the speech he made just before we rose for the Summer Recess. Recently, I have been spending a certain amount of time in going round listening to men on the job talking at production conferences, and I find that one of the most serious deterrents to increased effort at the present time is a feeling, which may or may not be justified, but which is none the less real, that in spite of all the very good changes the Government have made in the past two years there is still too much unfairness in the way things are being carried on in the country. Some of that sense of unfairness would disappear if we gave working people the kind of explanation which my right hon. and learned Friend has called for. He has several times pressed, for example, for production committees. The explanations given at production committees often wipe away feelings of irritation and injustice which seriously interfere with the men giving of their best.

For instance, in some of the industries in Huddersfield I find that one of the irritations which is making some working people cynical and not bother very much is that they feel that there are far too many soft jobs. That is a feeling which is felt, not only about private enterprise but also about some public enterprises. There are too many people who are watching others work. In one workshop in Huddersfield—a private enterprise firm, as it happens—there are only 100 workers, but in addition 13 charge hands and foremen. Probably those charge hands and foremen are doing an essential job, but the ordinary working people do not think they are. If they are doing an essential job, let that fact be explained and at once the feeling of irritation would disappear. If they are not doing an essential job, then put them somewhere where they can do one.

There is also a feeling—certainly among the woollen textile workers—that too much money is being taken out of the product of the industry by the middlemen after it has left the manufacturers. The price of cloth when it leaves the mill is x, but by the time it reaches the tailor and is sold to the customer over the counter it is very often 2x or 3x. It may be that the middlemen are performing a really useful function. If the middleman really is doing a job it should be explained; his function should be justified to the producer. Then, I think, some of the feelings of irritation would disappear.

People who are making textiles at the present time find it extremely difficult to understand why, for example, firms should be employing salesmen to go round shops offering shirts which they cannot deliver. Salesmen go round just as they did before the war, and they say "I represent so-and-so. Here is a good shirt; but I cannot let you have any." Why, then, the ordinary, sensible man asks, does that salesman not get put on to a productive job? It was put to me that they had actually got salesmen at the present time going round to breweries. A Yorkshire friend of mine said to me, "We can sup all the beer that they can brew without any salesmanship." If we could justify the jobs the blackcoated workers are doing, or, if we could not and then put them into some really useful jobs, we should go a long way towards removing some of the small irritations which are at present preventing people giving of their best.

There are, however, some grievances which are not going to be removed merely by explanation. I think it is a wicked thing, at a time when we are asking the textile workers of this country, almost more than we are asking the miners and the agricultural workers, to give of their best, that the wages in the woollen textile industry should be so disgracefully low. And they are—four pounds a week for a skilled weaver on time rates. Apart from the actual rate they are paid, there are all kinds of difficulties about payment. For instance, when weavers are starting a warp, a process which may take a few minutes or four hours, they are not paid for that time. That kind of grievance can be remedied only by getting wage payments in the textile industry very greatly improved—not by explanation. I do not say that that is a job for the Government. There are difficulties there. The textile industry is not completely organised. But I do say that unless that grievance is remedied we are not going to get the best out of the operatives in the textile industry.

Another point that was put to me was about the goods that we can buy in the shops. Hon. Members opposite, particularly the hon. Member for Louth, who some time ago suggested that we should abandon the export trade for six months to put goods into the shops, argue that goods in the shops would be incentives, and that people would want to earn more money to buy them. I think there is a good deal to be said for that; but at the present time, some of the things which workers see in the shops act as a deterrent to their efforts. Here is a concrete case. Textile workers, like everybody else, want to renew their curtains. They have not bought any curtains all through the war, and the curtains they could afford to buy before the war did not last too well, and they need to replace them. The curtains that they can afford to buy they can buy only with dockets. The curtains that are docket free are sometimes as much as £5 a yard. When a textile worker—a weaver earning £4 a week—goes into a shop and sees that the only curtains available are priced at £5 a yard her reaction is to "chuck her hand in," as they say in the Navy. That is the sort of thing which is seriously interfering with production at the present time. There is only one solution. If it can be done—I do not know all the facts, and I do not know if it can be done—some effort should be made by the Board of Trade to increase what I call the middle price ranges of goods in the shops, and to cut out entirely the luxury types of goods which merely act as an irritation rather than as an incentive.

I know that there are two sides to saying that, if we cannot all have curtains, then no one should have them. The right hon. Gentleman the Member for Woodford (Mr. Churchill) is apt to refer to that line of argument as being a desire for equality of misery. No one wants misery at all. We all want, if possible, to have as much pleasure and as much joy as there can be in living. But if there has to be misery, if there has to be hardship, then that hardship is much more bearable provided it is reasonably equally and fairly shared. I believe that just as gross inequality is a serious deterrent to production, so reasonable equality is actually an incentive.

I know that people who have been engaged in one war become the prize bores in the peace, but I do remember from my short and limited experience in the Navy something relevant to the argument. Ashore, the difference in living conditions between officers and men was very marked. In the place where I was, officers would live, not in luxury but at least in comfort in a separate establishment, while we lived across the road in pig sties which passed for Royal Naval barracks; and that apparent and obvious discrepancy between the living conditions of the matelots and the living conditions of the officers did cause great bitterness and ill-feeling ashore. When we went to sea, however, in a small destroyer we knew perfectly well that the officers had some privileges which we did not get. They had their gin, clean sheets, baths. But we did not mind that, because it was quite obvious to us that we were wetted by the same sea, mixed in the same dirt, threatened by the same dangers. We were all, literally, in the same ship.

That fact, obvious to every one of us, did remove that vice, that obstacle, that handicap of what I can only call frustrated envy—of which there is a great deal in this country at the present time; and in its place it created exactly what the Minister for Economic Affairs was calling for in his preroration tonight: it did provide a feeling of fellowship in the ship's company, it did create that sense of community in which we really were willing to work together for the common good. I believe that that feeling of fellowship, that "ship's company feeling," is by far the biggest single incentive to effort that mankind can know, and I would say to the Government that they should fester that spirit by every means in their power.

7.39 p.m.

Major Legge-Bourke (Isle of Ely)

The hon. Member for Huddersfield (Mr. Mallalieu) made several references to the peroration of the Minister for Economic Affairs, and I should like to make mention of that, too, because it did seem to me that that peroration was made with great sincerity; and I believe that if that call were made all over the country, and with the same conviction behind it, it would do much good. It did seem to me, however, a most extraordinary thing to say in relation to the most Gracious Speech. It seemed to me the perfect reason for not amending the Parliament Act, 1911; it seemed to me to lift the whole tone of the Gracious Speech—or the contents of the Gracious Speech—on to a much higher plane. If that was the right hon. and learned Gentleman's intention, I most heartily commend his intention.

The last three speakers have mentioned the matter of incentive, and, although it is not my intention to speak mainly of that tonight, I should like to say a few words about it. While there is obviously a great need for a spiritual awakening in this country, there is also great need for leadership, and I think what the hon. Member for Huddersfield said in his concluding remarks bears that out. If there is good leadership, good work will be done, and that applies to industry just as much as to the Royal Navy or the Army.

The hon. Member made reference to production committees, just as the hon. Member for Oldham (Mr. Hale) did before him. I hope that the Minister of Economic Affairs will not accept the suggestion of the hon. Member for Oldham that joint production committees should be made compulsory for all industries. It is far more important that where there is good leadership and good understanding in an industry that industry should be left to carry on its good work, rather than that something should be imposed upon it which is contrary to the wishes of the majority. I believe that that sort of thing has been done far too often in industry and throughout the whole of our national life.

I am certain that one of the things we have to do is to make it possible for a man to earn his full entitlement from his own labours, instead of having a large proportion of it taken away by taxation. I am firmly convinced that there is no practical step in administration more likely to help the incentive side of industry. We are all agreed today, I think, on the question of incentives. Nothing will affect the morale of industry more than to give a man or woman the feeling that if he or she puts more in the job than his or her next-door neighbour he or she will get the full reward for it. Obviously, to do that we must cut down taxation.

That brings me, via food subsidies, to agriculture. It seems quite ridiculous, if we look back on the history of food subsidies, that they should have grown at such a rate. In the first year food subsidies were at the rate of £70 million, which has now reached £400 million. These subsidies have to be found out of taxation, and I believe that if the Government decreased the amount of taxation required to produce the subsidies, they could very nearly make all overtime tax free. Such a step would have a very great effect on the incentive side of industry. It might be argued that there would be objections to the rise in prices of food which would result, but I still think that an Englishman prefers to spend the money he has fairly earned in the way he chooses, rather than have the Government take some of it before he receives it. If food subsidies are removed exceptions have to be made, as compensation will have to be paid to make good the standard of living, particularly of the old people and those who for some reason or other are unable to have the same standard of living as the average working man or woman. For that reason, it is important to avoid setting down a hard-and-fast rule in regard to those who should or should not be affected. It is obviously a matter which requires careful administration.

I now wish to say a few words on the subject of agriculture, with particular reference to incentives. A great cause of distress today, particularly in agriculture, arises from the fact that a great many workers are living under conditions where several families have to live in a house designed for only one family. There is no greater cause of unhappiness in rural areas, and, incidentally, of the increasing divorce rate. It is one of the greatest difficulties from the point of view of morale in the agricultural industry. Recently the Ministry of Health sent round a circular to the agricultural executive committees, and to the local authorities and county councils, for information, telling them to get in touch with their local authorities, and to recommend to them, after making a survey of the housing facilities and the housing demands for the next few years, the tenants who should take over the new houses supplied by the local authorities. I know it is a sad fact that some local authorities in the rural districts have not allotted the houses they should to the agricultural workers, but I cannot applaud the methods by which the Ministry of Health are seeking to overcome the problem. After all, the county executive committees are not, like the rural district councils, elected or democratic bodies, and the local council have a perfect right to object strongly when an agricultural executive committee tells them, after they have worked out their own housing list, that they want to put so-and-so into a house. It seems a very rough-handed way of dealing with the problem.

The agricultural executive committees are also to inform the local authorities of the likely increase in labour force required, and how many people will be required by the farmers. Surely, this matter of survey- ing the labour situation in a district could be much better left to the people most experienced in these matters, namely, the employment exchanges, rather than that the agricultural executive committees should suddenly take over the job. The agricultural executive committees have, of course, had some experience of gang labour, such as German prisoners of war and members of the Polish Resettlement Corps. If any Ministry is to come into this at all, which I am not at all sure is necessary, it should be the Ministry of Labour, who are the best people to do it.

We have rapidly arising in the country a situation where the local authorities will be thrown into a complete state of confusion. To my knowledge, a great many local authorities have been spending months working out their lists. A great many of the councillors are farmers, who are in touch with their colleagues, whether or not they are members of the N.F.U. It seems quite absurd to suppose that these men do not know what is the situation in their own areas. It is a great insult to them, and the Minister should look into the matter again. I agree that the problem needs tackling where the local authorities have not done their work properly.

I was interested when the Minister for Economic Affairs was dealing with new capital equipment, because there is a great need for new capital equipment in the agricultural industry. I am not sure that the Government's proposals to subsidise, as it were, the production of the industry is the right way of going about the matter. There is such a crying need for capital in the industry that the Minister of Agriculture should go very carefully into the long-term and short-term plans to find out where the most capital is required, and then, if the Government are doing anything by way of subsidising, that is where the help should first be given. That is my feeling, and I think some farmers agree with me. It is essential at all costs to avoid any encouragement being given to farmers who are simply out to get rich quickly by quick catch crops, which should not be grown on their land according to the rules of good husbandry. It seems to me that the present enticement runs that risk. I agree that if the farmers do the job properly there should be no risk, because they have the interest of their own land at heart. But the general trend today appears to make agriculture a purely business affair, and this is driving out the man who loves his land better than anything else.

So far as other capital re-equipment is concerned, I would like to turn to the matter of Defence, on which I have also put down my name to an Amendment to the Address. I noticed that there was one aspect of capital equipment conspicuous by its absence from the right hon. Gentleman's speech. That was the permanent rebuilding of aerodromes of the hutted variety and barrack camps built during the war. I am not certain whether the various plans have yet been worked out and what is the period allowed for the permanent rebuilding of these aerodromes and camps. I wonder whether the right hon. Gentleman has included them in the general cut of £200 million a year on capital re-equipment? It is very important that we should bear in mind that no matter how beautifully we work our our economic plans, unless we first of all look after our defence it does not make much sense to do all these other wonderful things. I shall always believe that in peace and in war defence must come first.

I do not say that there is need for capital re-equipment in the building line in the Army or Air Force today to the extent which I rather think has been visualised. I believe that for another ten years W3 can accommodate all the men we have in the Army and Air Force quite adequately in the existing buildings, including those built during the war. What I am worried about is the capital re-equipment spent on our ships. I know little of the Navy beyond how much we rely upon it. If these ships are to be put out of commission for re-fitting, has the steel allocation required been guaranteed? Is the re-equipment of these ships now that they are lying up absolutely guaranteed, or are they just to stay there? The Minister of Defence said that many of them would be afloat again very soon, but have we absolutely guaranteed their re-equipment? Unless we have, we are making a fundamental error which has been made right through history.

I believe that this Government will go down to history as a conspicuous example of the Government which meant well but failed dismally to execute efficiently or effectively one single plan which they put before the country. The right hon. Gentleman painted us a picture as grave as any picture painted at any time of peace or war. It is a challenge to the country. It is not the challenge of "Work or Want" but the challenge of "Want to Work." We all ought to want to work. At the same time, the Government had in their hands greater powers than any other Government have ever, had, and the power of the individual which has seen us through so many difficult times before is greatly restricted. What assurance have we that the Government of the day will carry out their plans? We have never seen a plan put forward by the Government since they have been in power to which they have adhered consistently and which has not failed to go wrong at some period or another. If these plans which the right hon. Gentleman has put before us to-day—plans of capital re-equipment, allocations of houses and trade balances—go wrong, we know now what the result will be. I say that if ever there was a condemnation of the present administration of this country it was the speech of the Minister for Economic Affairs this afternoon. That speech, in my opinion, judged against the Government's past record, makes this Government have one main obligation, and that is to go to the country and to get out.

7.56 p.m.

Mr. Dye (Norfolk, South Western)

The hon. and gallant Member for the Isle of Ely (Major Legge-Bourke), who is a near neighbour of mine when we are at home, said that this Government would go down in history, but in fact it has not yet gone down. It still stands, and the speech of the Minister for Economic Affairs this afternoon was a clear indication that the Government intend to guide the country through the very severe economic conditions which face us in the coming year. Hon. Members opposite may think that the Government had left it rather late in drafting a plan to face the coming storm but the fact is they and the country realise the conditions in which we find ourselves as a result of the war and have made the necessary plans whereby we shall become self-supporting and maintain our position as an industrial and agricultural nation. It is true that we have to trim and adjust ourselves to the new circumstances. In doing so, I hope that the Government will always bear in mind that the first essential of the people is food; that, whatever else we have to go short of, we shall endeavour both from our own resources and from overseas to get the food to maintain the health and vigour of the nation.

The second thing that is most essential is homes for all our people. We have suffered from war and decay. We have seen the beginning of the great housing effort. The right hon. Gentleman has indicated the cuts that are likely to take place and are bound to take place in dealing with the housing problem. The hon. and gallant Member for the Isle of Ely has referred to housing in rural areas. He has criticised the new arrangements for the selection of tenants for the new houses. What he does not appear to realise and what many of the district councils have not realised are the new circumstances in which they must provide the houses. The nation needs more agricultural workers. That will involve a transference of people from other occupations and from other parts of the country into the agricultural districts.

Therefore, to meet that need instead of district councils choosing tenants from their own locality they must, if they are to be the sole agency for building houses, provide houses for the new workers coming into agriculture. That is wanted within the next year. It is all very well for hon. Gentlemen opposite to shake their heads. The fact is there are certain parts of the country which have been brought into cultivation during the war by some form of imported labour such as prisoners of war which no longer will be available in those areas. If those areas are to maintain or increase their production it is to those areas that fresh workers must go. In my opinion they must be provided with a home so that they can live a natural life in their new occupation. Does the hon. and gallant Member for Holderness (Lieut. - Commander Braithwaite) disagree?

Lieut.-Commander Braithwaite

I shook my head at the prospect of the carefully prepared lists of rural district councils' being now overridden and the men, many of whom are ex-Service men who require a new house, being passed by while the new houses are given to persons from another part of the country. I was thinking of the friction that that would cause in the villages.

Mr. Dye

If I may say so, there is more than one way of overcoming that difficulty. If there are people living in agricultural districts who are not doing absolutely essential work there is no reason why they should not change to agricultural work and thus qualify for a new agriculture house. If the district councils in the constituency of the hon. and gallant Member for Holderness have been the same as some in mine, they will have made quite considerable provision for those ex-Service men who have returned. The new arrangements do not apply to the houses that have already been built or are in the course of construction, but to new contracts which the district councils will be putting out after the revision of the housing programme has been undertaken. I, therefore, do not expect to see in many agricultural districts a falling off in the number of new houses constructed.

I know that there will be a shortage of timber and that there is probably no better timber for housing purposes than that which comes from the Baltic countries. If this is not forthcoming why not look round this country? There is standing timber in this country which could be felled for house building purposes and for the making of the furniture that is necessary to furnish the new homes. I have looked round my native county of Norfolk and I have seen many thousands of trees that have reached maturity. Some of them have passed maturity and they could be felled during the coming winter and used in a year or 18 months in the house building programme. I have been down in Kent and in Waldershare and other parks there are thousands of really good timber trees, oak, beech and pine, which could be felled to aid the housing programme. I have been in Dorset, Hampshire and other counties too. I know our woodlands have had large numbers of trees extracted from them in the two wars, but I know also there is still a lot of standing timber. If I had the chance to choose between seeing trees standing to beautify the countryside or felling them to house our people, I should not hesitate for one moment. Those trees should be felled and used in the house building programme.

If a careful survey is undertaken on behalf of the Government of all standing timber in the country we could find enough to continue with the housing programme to cover the period mentioned by my right hon. and learned Friend the Minister for Economic Affairs this afternoon. He indicated that there was already in the country probably enough timber to see us through 1948. I urge upon the Government the necessity to make a review of standing timber and to take the necessary steps to see that it is felled and that it goes to the right place. This is what is now happening. When timber merchants go along to a sale of wood they are out-bid by other people who go to purchase it. Why? Because the fire wood merchants are paying a higher price for good timber trees than the controlled price laid down by the Timber Control. The result is that vast quantities of good trees are being felled and going into firewood and being sold for that purpose at high prices in the towns.

It is the kind of thing which ought to be stopped. I know one particular estate on which during the March gales over 300 good timber trees were blown down. Not one of them has gone into the timber yards, but they have gone in some form of fuel. I urge upon the Government, therefore, to make this survey as early as possible and to get real control over the felling of trees. The more trees that are felled for timber this winter there will be available for fuel more tops and branches which are the stuff which ought to go into fuel. I think it is of the utmost importance that the timber situation should be brought under control at an early period during the next few weeks.

I want to say a word or two about the campaign for food production in this country. We have seen the effects in the country of the Agriculture Act passed last Session and the goal which the Minister of Agriculture has set before farmers, farm workers and landowners in order to increase the production of food. It already has had a stirring effect in the country. It is true there are shortages of implements and materials which rather hinder those efforts at the present time. These shortages have arisen through changes which have taken place in the manufacture of agricultural mach fiery and because of the hard condition of the soil wearing up more points and shares than normally. We all know of these difficulties. It is at any rate interesting to note that there has been during the past two years the greatest development that has ever taken place in the production of tractors and machinery inside this country. Farmers in the eastern part of England in the past could only get suitable modern tractors and machines for their job from the United States of America or from Canada, but more recently our home manufacturers have been producing tools for the job and the linking of the manufacture of tractors and implements with the motor manufacturing industry is an indication of what is now taking place on a sufficiently large scale to meet not only home needs but also to supply a large overseas market.

In recent weeks I have been through some of these factories and I was interested to see a report in the daily Press yesterday or the day before to the effect that one of these big firms, the Standard Motor Company, in the announcement of their dividend, indicated a reduction this year compared with last. If that is because that firm is ploughing back its profits for the greater development of the manufacture of cars and tractors and agricultural implements, that is a move in the right direction. After all, as good farmers, all of us endeavour to plough back our profits into the land. The size of the plant now engaged on the production of tractors and other machines is an indication that in future British farmers will be able to count upon home production of tractors and implements suitable for their task and suitable for the development of Africa and of parts of Europe as well.

We have seen in recent weeks the changes that have taken place in agricultural prices. Some of my farmer friends in Norfolk and in other parts of the country were astounded at the extent of the rise in prices announced by the Minister of Agriculture. We have seen the first effects of the very high increase on fat cattle, sheep and pigs. Not only are the usual cattle going into the market but also large numbers of heifers and ewes for slaughter. They ought to be the basis for increasing our production of cattle and sheep in future years.

I know that we are in a difficult position and that there is a shortage of imported meat, but if we are to increase our home supplies of cattle, sheep, pigs and poultry in the next year or two it will not be done by slaughtering the female animals. I would urge upon the Minister of Agriculture to look very closely into the supplies of cattle that are coming to the markets today, and if necessary to check those that should be kept on the farms for breeding. Therefore, I urge upon the Government the need to watch developments constantly in British agriculture. We are on the right lines, and British agriculture can increase' its production over the next few years, given the essential machines, feedingstuffs and the new labour to take the place of the prisoners of war. I am certain that with the fullest co-operation of all concerned British agriculture will rise to the occasion and provide the greatest possible proportion of food for our people.

8.12 p.m.

Mr. Walter Fletcher (Bury)

The hon. Member for South-West Norfolk (Mr. Dye) made one extremely interesting remark in the course of his speech. He said that as a result of hearing the Minister for Economic Affairs this afternoon he and his Friends at last realised what the results of the war were upon the economic situation of this country. Why do they only "at last" realise it this afternoon? Have they not for months, for nearly two years, had put before them with the utmost gravity and force what was coming to this country under their administration? Have they not, all through this summer and last winter, had the true coal position put at them until they realised it at last, but too late? Have they not, in the matter of the use of dollars, had put before them the danger in relation to convertability and sterling balances of this country? Have not all these things been brushed aside by His Majesty's Government in a spirit of unjustified optimism, largely by the architect of this crisis, the Chancellor of the Exchequer?

I will turn to the speech made by the Minister for Economic Affairs. It was the first straightforward, honest statement, full of good sense, clarity and objective-ness that we have heard from the other side of the House. It was, at the same time, the greatest indictment of his colleagues on the Front Bench that it was possible to hear. Hardly a pate remains uncracked by it, and, but for his resilience and thick skin, the Minister of Health, after the revelation of the shortcomings in houses—did he not say that he would stand or fall by whether the houses were produced or not?—would disappear quietly and quickly, leaving no trace behind him.

Look at the Ministry of Supply. What did we hear about steel this afternoon? A meed of honest praise to steel production which had come up to expectations in every way and a rather strong condemnation of steel control, which is a Government control, for its complete inefficiency in making a mistake of some 2,000,000 tons in the licences issued. From that no doubt one could say with pure and perfect logic that it is a very good thing to nationalise it in order that the ratio of Government control should be increased and mistakes increased pari passu. That is a perfect case in every way.

There is also the Chancellor with his £600 million. We did have an honest confession this afternoon that the £600 million was not a private "perk" but was held by the country in escrow as trustees for the whole of the sterling area, and we could not possibly use it for ourselves; it was an iron ration which could only be used with the consent of those who had an interest in it. That £600 million is really like the last five lb. tin of bully beef the wife has in the cupboard. Once it is opened it is finished. We could never put the lid on it again. It is rather terrifying, in view of the extreme culpability of the Chancellor of the Exchequer, to think that this country in its moment of deep crisis depends for its economic and financial salvation on a "marriage of inconvenience" between the Chancellor of the Exchequer and the Minister for Economic Affairs. I do not know how long that marriage will last or how happy it will be, but I make reservations with regard to it.

I would like to point out that while the right hon. and learned Gentleman did make a clear and honest picture, like a doctor analysing the symptoms of the patient, he may have come to the wrong conclusion regarding the disease. I fear that he looked at it from rather a short-term point of view and referred to it most inconclusively as being a dollar crisis. I do not believe that is correct. The reason he arrived at that conclusion is that the area in which he wishes to sell his goods and from which he wishes to draw most of his food and raw materials has become so constricted recently and is almost entirely confined to those who will only accept dollars or deal in dollars, whether that is their national currency or not. From that he has drawn the conclusion that this is a dollar crisis, but it is not. It is a crisis of confidence, a crisis due to the fact that sterling, instead of being a currency of confidence, has become a currency of doubt.

People who were previously willing to deal in sterling and to carry out international transactions in sterling are no longer willing to do so. It is, indeed, sad to think that this country is being put back on a "cash-and-carry" basis. We are being put back to short-term expedients and barter instead of long-term multilateral international trade We are back in the Neolithic Age of economics under the guidance of the most forward-locking Government this country has ever seen. Until we have restored confidence in sterling and it is again an international money acceptable to everybody, we shall not begin to solve this crisis. The crisis is not even capable of being solved by production. Even if we achieve production in the best possible conditions and with the good will of everybody—I am certain Members on all sides of the House will contribute in this—it is not possible to think that we can build up this country again to its previous standard of living and to a prominent leadership in world affairs and remain a great nation on a cash-and-carry basis, with a doubt in people's minds about sterling.

Before the war we had some £3,000 million of overseas investments. Those were dissipated in the war effort. If we are again to have a cushion of that magnitude which would help to meet the economic hurricanes that come to the world fairly regularly, it cannot be built up on a basis of cash-and-carry. We have to restore confidence, and one of the ways that can be done is by the greater use of invisible exports. It is a most significant thing that about the last export which is ever mentioned—and it is only done in a perfunctory way usually—is the invisible export. The advantage of starting up again and regaining, the world's market in shipping, the marketing of commodities, insurance, banking and the many ancillary trades attached, is that it helps to restore confidence. It puts us at the place which we deserve through our knowledge, and the honest way in which we deal. It has the advantage that it does not draw upon the great pool of skilled labour which is needed for the industrial effort.

It is true that there has been rather a tendency to laugh at anybody who is not a manual worker. The "manual worker" has his great value—he is certainly better than Emmanuel Talker—but there are those who can make a very valuable contribution through the knowledge they have outside of direct manual work. If right hon. Gentlemen opposite would refrain a little more from using those easy words which have been invented recently, such as "spiv," "butterfly," "eel"—I presume I qualify for "butterfly"—and would devote their minds to learning a little more the value of the black-coated worker, the man of knowledge in the bank or brokerage firm or in the commodity market, and what he can give to this country, it would help a great deal. Until we get back these markets, neither will our ports prosper, nor shall we get the enormous revenue in hard foreign currency that must necessarily flow from the re-opening to this country of the world's markets through the drawing up of the economic iron curtain behind which we are living at the moment.

Another thing that does not get anything like sufficient mention is the craft and art of salesmanship. The right hon. and learned Gentleman this afternoon paid a very honest tribute, which will be greatly appreciated in this country, to the difficulty which confronts those who have to carry out the ultimate phase of the export drive, and that is the selling of the goods throughout the world. It is one of the activites in which I, personally, am engaged in many parts of the world, and I have a certain knowledge of it. It is becoming more difficult daily. The competition is becoming more severe.

In textiles there is an American textile drive that is making our Far Eastern and African business in textiles considerably more difficult. The same is true of engineering, light and heavy. The same is true of competition from countries which enjoy the benefit, such as Switzerland and Belgium, of being able to deal very much more freely in dollars and in nearly every other currency. I would certainly hope that where the direction of labour is being carried out, full consideration will be given to the need of those who are engaged in salesmanship not being cut off and deprived of the highly skilled people whom they must have or, for that matter, the facilities in foreign exchange and travel that they must have. They are rather frustrated at the moment by getting not sufficient priority in travel and not sufficient currency when they want to go abroad.

It is quite possible that if there is an economic storm in America, if the recession which has been anticipated and has not, thank goodness, come to pass so far, should suddenly arise overnight, there will be this same forced selling in markets: in the long-term view that means that other countries with cheaper labour, such as Japan and India, must start to flood the world with goods which will be a dangerous source of competition to our export drive in this country. Therefore, not only the manufacturing side should be emphasised but the salesmanship side as well. Coming to the manufacturing side, the production side, I entirely share the views expressed by the right hon. and learned Gentleman as to the necessity for creating unity and understanding in all parts of production.

I will be quite frank in saying from this side of the House that the right hon. and learned Gentleman's speech this afternoon may do a vast amount of good in that direction, but that it must be followed up in various ways. First, it must be followed up by the cessation of attempts made in the last two years to create disunity in industry, and the dragging up of the faults of the past which existed on both sides. We shall not beat this demon which is upon us by bringing up instances of things which have gone wrong in the past, but only by making quite certain of working together in the future.

On the practical side, one of the difficulties in production is that every firm, business, company or individual in business in any way has had thrust upon it or him in the last two years a whole number of new partners or co-directors not qualified in any way for that job, unwanted, unskilled, but, unfortunately, not unpaid, because the whole country pays for them. In nearly every business those new partners are the representative of the Minister of Labour, in the local employment exchange, the representative of the Board of Trade or the Minister of Food, the representative of the Minister of Fuel and Power, or some other Ministry, some official, usually not on a very high level, who has more to say in the policy and direction of the business than those who have spent the whole of their lives running it, and know it to their finger tips.

I am not saying that there is not a great need for a considerable measure of temporary control, but in carrying out these measures on the lower levels we get exactly those things which are bound to ruin the export production drive. Last week I had an instance of this in my own constituency. There is a new business being started and a special licence is given for the machinery. It is a business where 80 per cent. of the production goes for export to hard currency countries. An allocation for raw materials and for fuel and power is given, and a minute drop of petrol is even allowed so that the owner does not waste half the day in getting to and from the business. But, when it comes to labour, he is up against a snag because the priority of his business is not sufficiently high in the hierarchy of the Ministry of Labour.

In areas such as that which I represent, there are a whole multitude of industries of great variety. How could one expect a minor official, however hard working, to have the knowledge and competency to judge where labour should be directed there? Unless the greatest possible latitude of judgment is allowed at that level with the quickest possible appeal to the regional level, then the task of synchronising the allocation of raw material, fuel and labour is going to be very difficult. Unless the arrangements are made at about that level in an ordinary industrial town, with a possible appeal to the regional level, however good the planning may be on the higher level, it will break down. Industry in this country is so complex and spread over such wide areas that unless those things are capable of being adjusted reasonably and practicably on the spot, the new direction of labour will not increase output but will slow down production very considerably. I strongly recommend that the Government should consider it, not only from the stratosphere of policy in which they live, but on the more mundane level where the decision has to be taken which affects business itself.

The vital thing is that everybody in this country is asked for a special effort, and I think that everybody in this country is willing to make it. They have seen a change of heart in the Government; they have seen that the words of warning which have been put forward from this side of the House, and from outside as well, are at last beginning to be appreciated by one man of courage on the other side. But they are far from being persuaded as yet that there is a sufficient level of efficiency in Government administration to persuade them that the extra effort asked for will not be wasted. The whole of this scheme and the future of this country is bound up with the efficient administration, from the short-term aspect, of the production drive; but the importance of the production drive is not only what it produces over the next 18 months, but whether it will restore the confidence of the United States and other countries throughout the world, not only countries which want to lend us money, but countries which would be willing to accept our currency in immediate exchange.

I would like to finish on the note of urging the Government to devote themselves to the immediate efficiency of supplying at the same time raw materials, labour and their fuel. On the question of fuel applications, I have seen a good many in the North-West area turned down on totally insufficient grounds. When a business man asks for a certain amount of petrol he should not be treated with suspicion. I had a case of an application for four gallons of petrol a month with which the applicant can get to his office in a quarter of an hour and get on Change and do his business. If he is told that there are alternative means of transport, what is to happen? He will have to change his 'bus twice, and he will get to his office in 55 minutes, if he finds room to get on each 'bus immediately. Congestion will be caused through bad management and waste of time if it is not realised that such a man is making a genuine application which should be met as a genuine demand, and there will be so much loss of efficiency in the management of industry that no amount of increase will ever make up for it.

Let me return to the question of efficiency. It has not only to be efficiency but to be visible efficiency, sufficient to dispel the feeling in the mind of almost everybody in this country that bureaucracy has run mad, and that we are being run by people who do not know our business, who do not care about our business and are simply clockwork robots. I am not saying all bureaucrats are of that kind. During the war I was a bureaucrat—I have been decontaminated since. I remember seeing on the desk of one humorous colleague of mine "It might be difficult, but with a little patience it can be impossible." I am not certain that there are not a good number of people who have that quality. Efficiency in dealing with a huge number of problems must be visible to somebody with sufficient authority to reverse a local decision that is wrong. Unless there is that efficiency, no amount of goodwill which has been recreated, possibly partly by danger, partly by other reasons, will serve to make this complicated machine work.

I would recommend finally to the Government the dropping of recriminations, Dot only by the Government, but by its supporters. If a large fine were imposed upon anybody who indulged in quite useless recriminations, and did not look to the past simply as an area where he could gain really good knowledge for work in the future, the Exchequer might benefit, but infinitely greater benefit would be reaped by the country because we would gain by what is the last chance of our becoming united in the enormous effort we have to make to survive. Hon. Members should not forget that this crisis may be solved on the short-term basis by production, by borrowing dollars, by being worthy of credit, but the long-term process cannot be solved until we have restored once more the real and justified confidence in what was the symbol of the greatness of this country—the £ sterling.

8.35 p.m.

Mr. A. Edward Davies (Burslem)

I hope the hon. Member for Bury (Mr. W. Fletcher) will pardon me if I do not follow him immediately in the speech he has made. Possibly later I may have an opportunity of commenting upon some of the things he mentioned. However, in passing, I would say that when he talks about recrimination he might pass on the advice to his right hon. Friend the Member for Bromley (Mr. H. Macmillan). The summary of the proposed legislation presented to us in the Gracious Speech is reasonable and acceptable to the country. I do not share with the hon. Member for Louth (Mr. Osborne) the sense of despondency and despair. I do not agree that there is nothing very attractive in the Gracious Speech. The promise of the fine things the Government intend to do during this Session will be most encouraging to the people. When we think of the abolition of the Poor Law, a Measure long overdue, the taking into account of the basis of valuation in the case of local authorities and a revision of the block grants, the attention to be given to the child life of the nation and to the revision of the administration of criminal justice, I am sure the country will recognise that this is not purely a Government interested in what the hon. Member for Bury described as recrimination. These are great human measures which will appeal to all sections of the House.

Having made those comments, I return to the more immediate and pressing problems of the day. After hearing the admirable and comprehensive statement of the Minister for Economic Affairs, we realise more than ever the grave situation which confronts us. In the first place, it is largely a matter of getting coal for our industries and for export. As the Minister rightly reminded us, if we could have some 10 or 20 million tons of coal early next year, much of our difficulty in relation to the import-export account would be solved. I am glad that the Parliamentary Secretary to the Ministry of Labour is here, for he is an expert on the mining problem. I would like him to note that the basis of our approach to this situation is one of winning more coal, and I would like him, or whoever replies, to tell us whether adequate steps have been taken by the Government, and particularly by the Ministry of Labour, to get sufficient men into the mines to make possible the production which we so badly need. We know that the wastage goes on week by week, and we know that the Government have taken action to recruit young men for the mines, but I am not happy in my own mind, from the information which has reached me, that we are matching the position.

I want the Government to make it quite clear that more men will be coming into the mines within a very short period of time to work the faces which are available today. The men in the mines are doing a first-class job of work, and in my own area they are doing an excellent job. I watch the statistics week by week and month by month, and I am satisfied that the older miners particularly are doing an almost superhuman job of work. I do not believe, however, that we shall solve our coal problem until there are many hundreds of thousands more men available to go into the mines, and we need to be assured on this point.

There are grouses amongst the miners about some features of the industry today. We have heard about there being too many soft jobs and about square pegs in round holes, and I want to say that, in the way in which this country is going to be dealt with in the future, the worker at the ground level has to have an increasing say in the way in which industry is run. We know that mines vary from area to area, and, in my view, the men who work in the mines should have increased responsibilities for the way in which the mines are run. The men who know the industry intimately, and who know the slackers if there are any, know what are the grouses of the men and what are the matters which are the subject of discussion amongst their fellows in the industry. If, for example, a married man finds that, because he has one or two children, it pays him not to do the fifth turn of work, is it likely that a single collier, who is consistently doing five days' work and who, at the end of a week, because of the incidence of taxation, only receives something less than his colleague who has put in less hours, is going to be satisfied? These are problems of taxation, but they are very real problems amongst the men, and I have already submitted one or two cases to the Minister for his attention.

I believe that, if the miners are rightly treated, just the same as the workers on the railways and those in our other basic industries, we shall get the response for which we are looking. I believe that if men are asked to work overtime and adequate rewards are offered to them, even though they may have to be deferred rewards, owing to the problem of inflation and the absence of consumer goods making it difficult to pay out extra money, we shall get the results we want, If we give extra recognition to the men who do the job, if they are assured that, in the future, there will be possibilities of graduating from the bottom to the top of the industry, and if they are further assured that there will be an absence in the future of nepotism and place-men, they will respond.

In this connection, I would like to ask one thing of the right hon. and learned Gentleman. During the past few months, we have talked a good deal about development plans. We have had many working parties doing excellent work, and I listened patiently today to hear some reference to that work, but, because of the limits of time, I suppose, the right hon. and learned Gentleman did not mention the matter. I would like him and the Government to give us an assurance that this kind of machinery will be introduced in the immediate future, so that in the industry with which I, personally, am associated and in which my colleagues from Hanley and Stoke-upon-Trent are so closely interested—the pottery, industry—we may have set up a development council, and have working party recommendations implemented at the earliest possible opportunity. On behalf of the people whom I represent, and the organised workers of that area, I can say that there is a great sense of urgency about this matter. They feel that much more could be done if such councils were set up, but, as yet, we are without definite information about these matters. What is to be done in the mining industry by way of closer consultation, such as I have been pleading for, among the workers on the spot, and in the pottery and other industries, which are contributing so richly to the export drive in this country, I hope will also apply to the railways.

My right hon. and learned Friend this afternoon quite rightly stressed the importance of an up-to-date and efficient transport system. He mentioned the special difficulties which were likely to arise in connection with the country's economy if there were not sufficient wagons and greater expedition in handling the commerce of the country. He appealed for the goodwill of manufacturers and of the workers in this respect. Here, again, I appeal to my right hon. Friend the Minister of Transport and the Government to give increasing place to the men who, day by day, are working in the industry. A certain amount of machinery has already been set up. There are the local departmental committees and sectional organisations which could be operated, but whose functions are very limited, and which need to be developed so that the men can feel that they have a place in the shaping of the industry and in the kind of job that it is doing. This is the inspiration which the men need. Appeals for extra effort in the shape of overtime and more intensive production will not go unheeded if it is forthcoming.

With regard to the quick turn round of wagons, I suggest to my right hon. and learned Friend that he should consider with his right hon. Friend the Minister of Transport that, if there are delinquent or recalcitrant traders who are unduly holding up wagon stock of any kind, we should impose heavy penalties upon them. I see that someone described every wagon as a jewel. We have come to the position, of acute shortage in this country. I believe that much of the trouble during the so-called coal crisis in the early part of this year was a transport problem. There is likely to be a similar problem during the coming winter if production is stepped up and machinery, so greatly run down, is not helped with all the agencies at our disposal. Heavy penalties for delinquent traders in connection with the holding up of wagon stock may not be the complete answer, but I believe they would have some advantage.

I agree with the hon. Member for Bury in that, to some extent, we have to be selective in the kind of goods we seek to sell abroad and the way in which they are sold. Quite clearly, as Professor Pigou said in a letter to "The Times" the other day, it might be comparatively easy to push the stone up the hill, but the difficulty may be in keeping it there. We might achieve our export target for the time being, but much will depend upon the type of goods which we export. When some countries are restocked and re-equipped the markets may disappear. I agree with the suggestion of the Member for Bury, that we should focus our attention on invisible exports, in the sense that we should provide goods for which there is likely to be a continuing demand and which will be a source of revenue to this country. I am sure the Government have not overlooked that possibility.

I do not agree that the mass of the people in this country have lost confidence in the Government. From my experience, I find the position is very different. I find that the people are very understanding, sagacious, and prepared for a measure of austerity; they believe that the Government will win the battle, and they are prepared to support the Government. I must say, however, that if there is to be any cut in capital expenditure I regret that it should mean a cut in housing accommodation. From my experience—and I know it is the experience of my hon. Friends on this side of the House—this is the most tragic and difficult matter with which we are confronted. At the beginning of the war we said that this was the most urgent domestic problem which faced us. With the return of the men from the Forces, and the deterioration in property, the position has worsened. I know something of the difficulties of the Government in this respect, and I believe they have done a first-class job within the limits of the possibilities of the situation, but I want them to regard this matter as one of vital urgency to the young people in the country, some of whom are living in awful conditions. Our production and the morale of the country will be badly affected if the young folk feel that this matter is not being handled properly and with the sense of urgency which it merits.

I was glad to hear the contribution from my hon. Friend the Member for South-west Norfolk (Mr. Dye) with regard to timber. I hope we will examine every possibility of obtaining the raw materials so that we may continue our programme of building houses and thus provide the maximum accommodation as soon as possible. There is some kind of temporary accommodation released by the Army which could be made habitable, and we should examine every possible source which is likely to help us in this difficult position. When we do that, the people will give us their full support. I think we shall win through. In conclusion, I would like to congratulate my right hon. and learned Friend the Minister for Economic Affairs upon the lead which he has given us today.

8.54 p.m.

Lieut. -Commander Gurney Braithwaite (Holderness)

I imagine that both the House and the country will require one night and, I think, several days to digest the massive forensic effort to which we were treated this afternoon by the' right hon. and learned Gentleman the Minister for Economic Affairs. For my part, I am looking forward to reading that speech again with great care and in great detail when we get the OFFICIAL REPORT tomorrow. I have no doubt that we shall all do so. The sombre and solemn note which the Minister for Economic Affairs struck this afternoon was in striking contrast to the atmosphere of the House during the Debate on the Address two years ago when this Parliament first came together. On that occasion the Motion for the Address was moved by an hon. Member who has since attained high office. Formerly Financial Secretary to the War Office, he is now the Joint-Parliamentary Secretary to the Ministry of Supply. The hon. Member for Watford (Mr. J. Freeman), in moving the Motion, said: Today, we go into action. Today may rightly be regarded as 'D-Dav' in the Battle for the New Britain."—[OFFICIAL REPORT, 16th August, 1945; Vol. 413, c. 73.] It is quite clear from the speech of the right hon. and learned Gentleman that two years later we have arrived at Dunkirk. For the past two years we have been steadily marching backwards.

There were two words which occurred over and over again in the speech of the Minister, although I lost count after 23 of them: "We hope." It reminded me of the other evening when in an industrial area I saw outside a Co-operative hall, "Come to our meeting on Sunday evening and hear the message of hope." This is now a Government of hope rather than faith. However, I wish to confine myself to one sentence in the Gracious Speech, which reads as follows:

My Ministers will give all possible help to those who work on the land in order to increase still more the home production of food. As the right hon. and learned Gentleman stressed that early this afternoon, I shall ask him to bear with me while I point out some of the difficulties and bottlenecks which are arising in that connection, and which he, as commander-in-chief of production now, may be able to do something to straighten out. During the Recess, the Lord President of the Council, talking of the food drive, said, "The Government means business." In the agricultural areas they are beginning to wonder just when the business will commence.

There is one Measure in the Gracious Speech which I welcome, namely, the setting up of river boards. If that is the Bill which was left on the stocks by Sir Reginald Dorman-Smith on the outbreak of the recent war, or at any rate something like it, it will be welcomed and should have a non-controversial passage. There is a great need for the amalgamation and marrying of some of the minor drainage authorities, and certainly for somebody to deal with the condition of river banks. In my constituency there are 85 villages and hamlets. I have just managed to visit most of them, involving a long tour of 2,000 miles of road— possibly for the last time. I wish to convey to the House some of the difficulties which I saw in the course of that long pilgrimage.

The first thing I have to say to the right hon. and learned Gentleman is that Ministeries are clashing and overlapping in many matters in such a way as to handicap and frustrate the main agricultural effort. The tour of my constituency provided what I might call a microcosm of the national situation as regards the agricultural problem. The housing position is nothing short of a tragedy in the rural areas. I was most alarmed, as were some hon. Members opposite, at what the Minister said today about the cut in the housing programme. I was even more disturbed at the proposal to import from other areas workers who would have priority in housing. In some of the villages there is already a long waiting list, prepared with great care by rural district councils who have sifted and sorted the matter. The problem will not be so much the building of the houses—although that is serious enough—but their allocation when built. I came back thankful that I am not a rural district councillor. It will be a fearful problem to allocate those houses when they are ready.

If we are to have this food drive, then the abolition of the basic petrol ration really is nonsense. It will put a spanner into the works; it will handicap the farmers, which is serious; and it will introduce a social problem of no small difficulty in the handicap which it will place on the farmers' wives. Many of these young men who have taken up careers on the land have brought with them wives who are accustomed to life in the towns, and who expect to continue to enjoy some of the social amenities—shopping, the cinemas, and so on. If those girls are to be happy in village life, it will be a great mistake to abolish the basic petrol ration. The right hon. and learned Gentleman is probably thinking, "Oh, yes, but, after all, there are bus services which serve most of those villages." So there are—perhaps two or three buses a clay, which, more often than not, come to the village already full up, having loaded in a town farther on; and with petrol cut, reliefs will not be possible. Thus the Government are going to add to the very serious traffic problem which already exists.

Here is a difficulty the right hon. and learned Gentleman could remove. Petrol decisions regarding the East Riding are, for some reason, made in the City of Leeds where, it appears, officials look at small maps and see that a village is only a millimetre away from a bus route. That millimetre, however, represents in reality, probably, a long tramp in the mud and the rain—or the snow as the winter advances. I should like to see some decentralisation of petrol allocation, so that it can be dealt with by people who really do know the localities and the problems of those localities. Then, too, the abolition of the petrol ration is going to put a stopper, very nearly completely, upon certain cultural activities of great importance to the food drive. I have in mind particularly the agricultural discussion societies which are most valuable pieces of machinery as clearing houses of ideas and experiences, and to which the young farmers are going in increasing numbers. I had the opportunity of addressing one in a village only last week, where they told me—I would impress this upon the Minister's attention, for it is really important—that of the 70 who were there that night, only 15 would be regular attenders in future if the basic petrol ration were abolished in its entirety—which is as the matter now stands. There ought, I think, to be some allowance for that purpose, and the officials responsible in the Ministry of Fuel should be told that that sort of thing is important to the food drive.

Ministers are getting their wires crossed, as I said. There is an aerodrome at Catfoss near the town of Beverley. It covers four hundred acres which were, before the war, the site of three good producing farms. For the last 12 months the aerodrome has been derelict. Last year three farmers were allowed to cut the grass and take away about 1,000 tons of hay for livestock. This year the job of tidying it up went to a contractor from Leeds—again from Leeds: I do not know why there is this affection for Leeds—who looks after 12 other aerodromes in Yorkshire, and has carted all the grass away. Let me give the Minister the words of a villager which I took down because I thought they summed up the problem. This is what he said: The grass has never been allowed to grow this year. Two brand new tractors were brought on to the job, and the grass is mowed regularly, the men sometimes working 60 hours a week to do it. When my milk supply was cut I was told it was because the cattle had no food. I was furious. I have a paraffin stove, but cannot get half a pint of paraffin for it. Yet these tractors are running round all day using valuable fuel and producing nothing. When I was there it looked like a cricket pitch. There is a crossing of the wires between the Ministry of Civil Aviation and the Ministry of Agriculture somehow.

The proposal to raise the school-leaving age, excellent in theory, is, in its operation in the villages, producing hopeless chaos. A schoolmistress whom I visited told me that the fifteens during the extra year are in classes with the sevens, that "it is very difficult to give real instruction, that there is hopeless congestion in the classrooms, and that the children are learning nothing. In her words, they would be better on the land helping their parents and learning something, about agriculture. I was shocked, therefore, to hear this afternoon of the building programme for schools being held up for an indefinite period.

Sir S. Cripps

indicated dissent.

Lieut.-Commander Braithwaite

Or cut down.

Sir S. Cripps

I did not say anything about it. I said I had not time.

Lieut.-Commander Braithwaite

Some one asked the Minister about housing and schools, and I gained the impression that there was certainly to be some reduction in the school-building programme. If that is not so, I shall be delighted to hear it. Then there is a factory where they are carrying out repairs to agricultural machinery—the Holderness Plough Company at Burton Pidsea—I like to get the names in the OFFICIAL REPORT to make sure my constituents know that I have been there. There were bare shelves, almost an entire absence of water pipe fittings, and points for cultivators. What struck me as being so odd was that every Monday there is an electric power cut, and the electric welders are stopped for that day, whereas if one goes to the back door of the factory, in full blast lighting up the sky can be seen the lights of Hull fair. The swings and roundabouts are in full operation—there is a shortage of electricity for bread, but plenty for circuses. Surely that is a matter the Government should look into.

May we also ask why it is that the shops are filled with Australian apples at a time when there is a glut of apples at home? This concerns more the Minister of Food, who has a genius for doing the wrong thing, a genius which is shared only by the late Minister of Fuel, about whom I shall have something to say in a moment. Why is it that linseed cake is bulk bought at £40 a ton and sold to the mills at £11 10s.? That is another question put to me in the course of my travels. One could go on, but all these are merely tributaries flowing into the main stream of Ministerial mismanagement. I hope, now that we have the right hon. and learned Gentleman as Minister for Economic Affairs, that he will treat these problems as a combined operation, and will knock together, politically of course, the heads of about a dozen Ministers—Transport, Education, and others—who are concerned with all these problems, and that he will decapitate also politically, the Minister of Health.

The dollar situation, about which the right hon. and learned Gentleman said so much this afternoon, in my submission is no more than a smokescreen covering the real cause of our troubles. During the last three months, when the Chancellor of the Exchequer knew that our payments in sterling would be convertible, the Argentine, Egypt and other holders made a run on the balance of our loan to the extent of nearly 1,000 million dollars, which reduced the money available for food, and consequently our standard of living. It must be understood by the country that the cause of our present trouble is that the Chancellor, backed his economic theories with the peoples' food supplies and lost. This tragic miscalculation will become increasingly apparent as the nation gets hungrier.

We must also consider the miscalculations of the fuel position by the late Minister of Fuel. Surely, our hearts go out in sympathy at this moment to hose at the War Office who are responsible for tendering expert advice. Consider this miscalculation and the shut-down of industry which cost £200 million in export trade last winter; and another £200 million for the run on sterling which might have been prevented, but for the Chancellor's lack of foresight; add many more millions for losses on bulk purchase trading, consider the delay in the reorganisation in the steel industry owing to doubts and threats of nationalisation, which is now causing us to buy heavy machinery at increased prices from other countries—these and many other blunders have landed us in this Socialist pickle, and it is no consolation to know that it contains so many ingredients. May I quote what the right hon. Member for Woodford (Mr. Churchill) said two years ago during the Debate on the Address: Freedom and abundance—these must be our aims. The production of new wealth is far more beneficial … than class and party fights about the liquidation of old wealth."—[OFFICIAI. REPORT, 16th August, 1945; Vol. 413. c. 93.] Instead of that, we have had for two years Marxian theories of class struggle, confiscation and now industrial conscription—a form of serfdom by which men and women are to be chained to their machines. No Government, in my view, can ever create prosperity; only industry can do that. A Government can, however, create confidence. A Government cannot create prosperity, but it can create famine in this island by tampering and tinkering with the delicate machinery of production, distribution and exchange. My constituents want petrol; they are to get penal reform. They want spare parts; they are to get State gas. They want feeding-stuffs; they are to get an unprovoked attack on the House of Lords. It is not surprising that, wherever I went during those 2,000 miles, I found the view expressed in all the villages and hamlets that the prerequisite of recovery is that the Socialist Government shall be sternly and decisively voted out of office by a disillusioned and, indeed, disgusted electorate.

9.13 p.m.

Mr. Scott-Elliot (Accrington)

I hope that the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) will forgive me if I do not follow him too closely in making such a long tour of my constituency as he has made of his. I want, nevertheless, to talk about something about which I feel very strongly. I believe that it is generally agreed that most of us during the course of our lives have periods of acute anxiety on account of public or private affairs. During the last ten years, on more than one occasion, I have been acutely anxious on behalf of my country. I make no bones about saying that the degree of anxiety which I at the present time suffer is no whit less than it was on those former occasions of crisis.

There are three simple propositions which I wish to put forward. The first is that despite Ministerial speeches and exhortations I think that there are still too many people who do not understand the seriousness of the crisis with which we are faced. I think that the position is getting better and that if we can have more speeches of such a grand nature as that given by my right hon. and learned Friend this afternoon the country will very soon wake up. In war it is comparatively easy to appreciate danger. When Hitler and his tanks were at Calais it was obvious that we were in danger of invasion. It is not a bit easy to those untutored in economics—and, after all, the average man does not know very much about economics; I do not pretend to do so myself—to understand the extent of an economic crisis which we wish to ward off until such time as the economic crisis actually hits us in terms of hunger and unemployment.

My second proposition is that I am convinced, contrary to what has been said tonight by certain hon. Gentlemen on the other side, that this Government command the general support and good will of the country. I am convinced more particularly that they command the support of the workers who, provided they are given a vigorous lead, are prepared to put their backs into our great national effort. My third proposition arising out of the first two is that the Government can and must get over to our people the needs of the situation in a far more vigorous and perhaps more ruthless way than anything that has been said hitherto. In doing so I do not think it is solely a question of delivering speeches and exhortations. I believe the Government have to make a combined move by obtaining the co-operation of the Press, the radio and the films, in order to get the people to see the dangers with which we are faced.

It is not for a humble back-bencher to say how the Government should do these things. They will obviously find that out for themselves, but perhaps I might be allowed to make a few suggestions which have occurred to me. In the first place, if my right hon. Friends on the Front Bench will make speeches like that delivered this afternoon by my right hon. and learned Friend the Minister for Economic Affairs they will really get the matter over to the people. My next point is that perhaps Ministers should give themselves a little more time for thought, leadership, and administration. Inevitably they would then have to give a little less time to legislation. My own criticism of the Gracious Speech is that it contains too much legislation. I, personally, believe that in times of crisis we must be extraordinarily careful not to overload the administrative machine which is overloaded already to a rather dangerous extent. In normal circumstances I would welcome most heartily every single Measure which is contained in the Gracious Speech. For fear that I should be misunderstood I should like it to go on record that I believe most emphatically that we must carry through this Measure for the nationalisation of the gas industry in order to coordinate it with the other branches of fuel and power. Nevertheless, I should have liked to see a little less legislation and a little more time for Ministers to devote to administration, which, as they themselves realise, is such a vitally important matter.

Another point I want to make is this—I have already alluded to it to some extent—is that Ministers must make a different approach in getting over to the people the gravity of the situation. There has been so far too much generalisation, and I do not think people pay too much attention to generalisations; they would pay attention to any particular issue which is going to affect themselves. Therefore, I do not think there is any good in slogans like "Work or Want." What I believe may have to be said, and what my right hon. and learned Friend hinted at this afternoon, is something of this kind—if we cannot produce sufficient, export sufficient or pay our way in the world a certain number of people in this country will within a reasonably short space of time be hungry and unemployed. "Unemployment" is a word of very ill omen and I should never use it if I had not considered my words most carefully. That implies a certain degree of fear, but I believe it may have to be done. That is a little too reminiscent of Governments which have been manned by right hon. Gentlemen opposite in the past. The Labour Party does not stand for that sort of thing. The Labour Party stands for hope and this is the last note on which I want to end my speech. We must get over the idea of hope to our people.

In the first place, I think it will be necessary to link up in the public mind the idea of increased production with the idea of cuts. People should be told that when production has reached a certain level, barring some unforeseen eventuality, certain of the cuts can be taken off and that we shall be able to enjoy more ourselves. There is another and even more important point. I feel there is such a comparatively small margin between scarcity and relative sufficiency, and that so much could be achieved by so little extra, whether in the form of extra labour, extra efficiency or extra individual effort. In order to prove it I propose to give two examples which have been brought to my notice concerning an industry of which I have some small knowledge, the cotton industry.

It will be within the knowledge of hon. Members that our difficulties in the cotton industry are due, not to shortage of cotton but of labour, more particularly in the spinning and cardroom sections. I wish to tell the story of five mills in an area of Lancashire which I know to be one of difficult labour supply. If those mills were able to obtain an additional 150 workers they would be able to produce an extra 100,000 lb. more yarn per week. That would give us 400,000 yards of cloth per week. I believe I am right in saying that a man's shirt and two collars can be made out of four yards of cloth. We should, therefore, be able to get additional cloth for 100,000 shirts per week or 5 million a year. That is a small example of what can be done in one part of the country.

Now let me give the example of a large combine, which has 50 mills and represents about 20 per cent. of the spinning capacity of Lancashire. Before the war that combine produced about 3,150,000 lb. of yarn per week. Today they produce only about 2,000,000 lb. of yarn. If they were able to obtain no more than 2,000 additional workers of the right type, it is claimed that they would be able to produce 2,900,000 lb. of yarn, which is only 6 per cent. less than the total they were producing in 1939. These are significant figures, which prove the point I was making, that so little extra will produce so much. I commend those examples to the President of the Board of Trade and to the Minister of Labour, because between them they could get together and do something about it. I should be glad to give them the source of my information, which is a trade union one upon which I can wholly rely.

I end as I began by urging the Government to speak in the terms of the greatest possible urgency to the workers of this country. Then, and only then, will the people of Britain rise up and show that they can fight their way out of the crisis, led, and indeed, inspired, by the Government in which they put their trust.

9.24 p.m.

Mr. Lennox-Boyd (Mid-Bedford)

I think the whole House will agree that we had a really remarkable speech this afternoon from the Minister for Economic Affairs. The right hon. and learned Gentleman is courageous in exposition, and, as I know from personal association with him towards the close of the war, he can be equally courageous in administrative action. The hopes of the country and certainly all the hopes of the Socialist Party are now centred on his success. We hope that the right hon. and learned Gentleman has full authority, even over his most important colleagues, and in particular over the Chancellor of the Exchequer who appears to a great many of us to be the real architect of our present disaster. It does not look as if the right hon. and learned Gentleman can have full authority. It does not appear that he could have been consulted about the drawing up of the King's Speech, for the Gracious Speech bears no relation whatsoever to the speech made by the right hon. and learned Gentleman this afternoon. Nor indeed does the speech made by the right hon. and learned Gentleman bear any relation to the promises made two years ago by the present Ministers now sitting on the Treasury Bench. When the hon. Member for Accrington (Mr. Scott-Elliot) said he hoped all Ministers would make speeches such as the right hon. and learned Gentleman made today, I could not help reflecting that had they done so two years ago, they would not be His Majesty's Ministers today.

We are tolerant people in the House of Commons. We are inclined to forgive those who make extravagant promises when they do not anticipate being elected to power and then find it difficult to carry them out, but what we cannot altogether forget is that these promises have been repeated all through the two years, and as recently as June this year, by Ministers who ought to have had, and indeed have, some knowledge of the shape of things immediately to come. The right hon. Gentleman the Minister of Food in July ridiculed the people who were telling some housewives that there might be some difficulty in ensuring our food supplies. The right hon. Gentleman the Minister of Health staked his reputation, for what it is worth, on the successful achievement of the housing programme, and now the shock that the country is going to suffer both in regard to food cuts—probably more to come—and the real human tragedy of the housing collapse is immensely increased by the hopes that were so wantonly aroused, even as recently as June this year. When we survey the present housing situation and the lamentable story the right hon. and learned Gentleman had to unfold, we are entitled to remember that this is not much of a blitzkreig in house construction and is truly the most outrageous of all the follies of ministerial boasting followed by administrative incompetence.

It would be ungenerous and untrue not to confess that the speech of the right hon. and learned Gentleman struck exactly the right note. It was the first, and indeed the only, sign of real leadership we have had from the Government since they won the General Election. It was of course, as we all know, and as even hon. Members behind the Minister will agree, a complete and utter condemnation of all that they have been doing in the course of the last two years. It was a denial not only of the promises whereby they were elected to power but of the validity of the 53 Acts of Parliament which we are proudly told this House passed in the Session just over. The right hon. and learned Gentleman has left a great deal to the Chancellor of the Exchequer to deal with tomorrow, and if I appear to praise the speech of the right hon. and learned Gentleman, it is only on the assumption that other questions like inflation, the possible ceiling on wages, wage demands, and hours of work will be dealt with by the Chancellor of the Exchequer. But within the limits of the vast field he covered, it was indeed a remarkably good speech.

We think that the speech is two years too late. Nonetheless, we will give all the help we can to the working out of any programme that can be called a national programme. Obviously the right hon. and learned Gentleman would not expect me to deal in detail with the various points he made this afternoon, though I hope to deal with a number of them in the course of the next few minutes. A detailed criticism and helpful examination of what he said must take a little time to prepare, but we hope it will not take quite so long as the Government have taken in making up their minds what to do.

The right hon. and learned Gentleman has gathered round him a team of people who are largely of his own choosing. If I may strike a personal note, I should like to give a particular personal welcome to Sir Edwin Plowden who is the Chief Planning Adviser to the Government, and with whom—I was Under-Secretary to the right hon. and learned Gentleman in the closing period of the war—I had close administrative and personal relations. It is unlikely, therefore, that the right hon. and learned Gentleman who chose his advisers and, apparently, also has chosen most of the other Ministers now associated with the economic drive, will blame his failure either on his experts or his subordinates. He chose one of his chief Ministers, the Minister of Fuel and Power, following the good Socialist custom of going to the same public school, from his own public school, and if this crisis is resolved it may later be said that the British economic crisis was solved on the playing fields of Winchester.

We wish the right hon. Gentleman the Minister of Fuel—with whom I was also at Oxford, for he had the traditional education, he went right on to Oxford as well—every possible success. He inherits a very difficult task. Almost on the day he is appointed many thousands of Scottish miners are out on strike; the intimate understanding that we were told would arise from the nationalisation of the mines between the National Coal Board and the miners themselves has proved, as of course we thought it would, an illusion, and rigidity and delays have taken the place of a relationship which, though often criticised in the past, did at least apply very often human understanding to the problem. He also succeeds to the Ministry of Fuel and Power at time when it has been stated, and not denied, that the administrative cost of raising coal has gone up since nationalisation by 800 per cent., and a profit of 2s. 9d. a ton on the raising of coal has been turned into a loss of 3s. 3d. Now the task of the right hon. Gentleman the Minister of Fuel is not only important in regard to coal, but it is, of course, a foundation task in regard to the production of steel, and much of the hope of Britain in the months that lie ahead turns on the work that he is able to do.

Now the right hon. and learned Gentleman has painted a very alarming picture, but it cannot be made too alarming and we certainly have no charge against him that he has overpainted it. At the outset in dealing with what he said, I would welcome the reference that he made to the Marshall Plan and to the overriding need for the countries of Europe, in particular of Western Europe, to try to work out their joint salvation. I think the ominous silence among many of his own supporters with which those references were met was rather tragic. We agree also with him that on the success of the Government—on the success of the British Government, of whatever party it may be in the future—depends as well the survival of European Christian civilisation. This is linked up with the problem of demobilisation. All sorts of people are urging that we should over-rapidly demobilise our Armed Forces, and many people are using the economic crisis and the un- doubted manpower shortage in order to clear out of Europe because they wish, for quite different reasons, that Europe may be laid at the mercy of the new Communist tyranny.

We, have a great responsibility in Europe still, and if we had to make our decision between cutting our commitments altogether in the world, and particularly in Europe, and cutting our domestic capital expenditure, I hope we should be in no doubt as to where the cut should fall. We ought to cut our own capital expenditure and not abdicate our position as the most level-headed and traditional leaders of the free people of Europe today. Once we used to tell Europe to hang on and we would come to their aid. It would be a sorry commentary on the decline in our authority if now we had to say today, "We are sorry, we cannot play a big part in the conduct of Europe today, we are too much concerned with our standard of living at home." We have great obligations in Europe. Even if we had not great obligations in Europe we obviously need a stable and peaceful Europe for the working out of our own economic problems at home.

This fear of our growing weakness in Europe, and the agitation to demobilise overmuch our Armed Forces, has not been in any way assuaged by the curious story in regard to the Home Fleet, which was not carried any further today by the comments of the Minister of Defence. We shall await some further explanation on the state of the Home Fleet. We know how much the difficulties about the figures in regard to the Fleet are due to the Minister of Defence's own abdication in regard to the conscription training period. That has thrown out all the plans of the Army, Air and Naval Staffs for training, an achievement not compensated in the least by the almost immediate subsequent appointment of the chief back bench critic of the Minister of Defence to Ministerial rank. So much for our obligation to keep our position in Europe.

The outstanding feature of the speech of the right hon. and learned Gentleman dealt, of course, with the capital construction programme. Those of us who were jointly associated in the concluding stages of the great war and the Coalition Government know what work was devoted to the preparatory work in regard to a capital construction budget, and we have been waiting for it for a long time. We are glad it has come, and could wish it had come two years ago. Sir Hubert Henderson, who played an eminent part in advising Ministers of different political persuasions, has said recently that the bottleneck and delays in allocating materials resulting from the excessive finance allocated to nonproductive capital expenditure has lost us more production than would be caused by 1,000,000 men openly unemployed. Let us hope that the White Paper we shall shortly receive from the Government will show cuts which, while not affecting those long-term investments which we must be starting now, will at least divert finance into the most necessary channels.

The right hon. and learned Gentleman painted a terrifying picture of the future, but it is mainly in the field of retrenchment in capital construction that the most immediate and obvious changes can be made. We shall, of course, await a fuller picture in the White Paper, but one or two things already stand out. It will no longer be possible after that speech for hon. Gentlemen on the other side of the House to go round misrepresenting the point of view of Members on this side of the House. When we queried, for example, the five-day week, little did they think it would soon come home in regard to the difficulties in the turn-round that they are largely due to the five-day week. When we said it was ungenerous and unfair to call the railway assets a "pretty poor bag" of assets, and to draw attention to the shabby coaches and out-of-date locomotives, little did hon. Members realise that the right hon. and learned Gentleman would have to come down here and say that there would have to be further cuts with regard to the allocation of coaches and wagons to the railway companies. And when one or two people, while fully supporting, as we all did, the raising of the school-leaving age as a long-term national investment, queried the wisdom of actually raising it now, with the shortage of schools, little did hon. Members realise that there would probably be cuts in school construction, which will face school teachers and authorities with an appalling administrative problem.

The right hon. and learned Gentleman passed from the references to capital construction to various other observations, and I should like to deal with one or two other of those aspects. The Gracious Speech from the Throne urged that our people should show once again the same resolution and energy that distinguished them in the past. It has been our complaint against His Majesty's Government that the leaders in Parliament, the Prime Minister and the Ministers hitherto charged with economic affairs, have never shown that proper sense of national urgency which would get the people to give a response whereby their resolution and energy could now be nationally invoked. A Session in which 53 Bills became Acts of Parliament prompts one to wonder how many of those Bills, or Acts, as they are now, have actually added to our productive efficiency. The rather pathetic plea by the hon. Member for Accrington (Mr. Scott-Elliot) that there should not be so much legislation was always greeted with derision when made by us last Session. If the country could be saved by laws there would be no crisis today. The trouble is that they were the wrong laws, and while the Minister of Health was saying that we had no time for a rural housing Bill, the sands were running out in regard to agricultural production.

These Bills have only one really material result, and I commend this to the Minister of Labour, who is always searching for scapegoats for his own administrative failures. These Bills have created a vast army of non-productive people whose energies might well be tapped in this crisis, people who are not doing a full day's work—the 13,000 officials who now have the right to enter our homes without legal authority, the people who are drawing up some 900,000 questionnairies every year to industry—one questionnaire I saw a few weeks ago had no fewer than 1,000 questions—the people who have increased, since this Government came in, the number of official forms from 900 to 3¼ million. These are the sort of people who might well be diverted to productive industry. At a time when when we have one civil servant in the Admiralty to every five sailors, one in the War Office to every 18 soldiers and one in the Air Ministry to every 12 airmen, one civil servant in the Ministry of Supply to every 10 workers in the Royal Ordnance factories, that is surely a time to look again at the consequences of unnecessary legislation. When the lights are put up at night in the Ministry of Transport—and no one accuses Ministers or officials of not working hard—while it might have been that the lights would be up in order to mobilise the merchant marine to get raw materials and machinery from abroad to England, they have in fact been up in order to devise new forms of regulations with which to harry lorry owners in my constituency, and others.

If the speech of the right hon. and learned Gentleman today argues a change of approach then it will have results which will carry us on for quite a period of time. Unfortunately, the speech was made in the Debate on the Address, and we cannot run away from the Gracious Speech, which is the Government's legislative intentions for the present Session. There is nothing in that Speech to match the sense of urgency or to evoke again the sense of leadership which was present in the speech of the right hon. and learned Gentleman. Even "The Times" newspaper said of the Gracious Speech that there was in it scarcely a glimpse of the prodigious dangers and historic opportunities now open to the British people, and many Members have drawn attention to the outrageous attempt to divert attention from shortcomings by the reference to the reform of the Parliament Act.

Even the papers most notoriously associated with trying to understand the motives of the present Government have been unanimous in their condemnation. The "Daily Mirror" called it "a move to cover something up" and said it was probably the mishandling of steel. The "News Chronicle" called it "brawling at phantoms," the "Manchester Guardian" spoke of "political irrelevance," and the only paper in the country that is, by the terms of its charter, obliged to publish what its political chiefs tell it to publish, the "Daily Herald"—the only thing they could think of was that it was all most interesting. We all know perfectly well that the real feeling of the people of this country was summed up by the Lord President of the Council as recently as last November in one of his sprightly speeches in the country. He then said: The rarity of a conflict between Lords and Commons is nowadays so trivial that most people take the smooth working of the two Houses for granted. I commend that to the Government as a fairer picture of our constitutional position than anything they envisage in the Gracious Speech. In the course of the speech of the Minister for Economic Affairs, the right hon. and learned Gentleman asked for greater production, but he made no reference, other than the obvious spiritual references with which I do not quarrel, to the need for greater incentive, and greater respect also, for the people who have, by their prudence and hard work, managed to save some money of their own and want to be allowed to hand it on to their children. Without a better and new approach to the problem both of incentive and of savings, there will never be full industrial or agricultural production in this country. I will not go into detail in regard to the problem of incentives, but I would like to commend to the right hon. and learned Gentleman and the Government the remarkable example of Belgium which, though it has a Socialist Government, has now achieved almost miraculous increases in production after first; meeting some of the urgent and overdue domestic needs by diverting some part of production for a time to consumer goods at home. This particular incentive, for a short period at any rate, is one that the Belgians have proved in practice to have immensely advantaged their export trade in the long run.

I want to deal for a minute or two with the question of savings. It is a very alarming fact that in the last six months nearly as much money has been taken ort as has been put into national savings. The sum of £391 million has been taken out of national savings and the sum of only £453 million has been invested. We are still £100 million off our national savings target. The Government must know how far this is due to fear in the minds of investors, particularly small investors, that the value of money will decline and also to the fear that the attacks by the Minister of Labour and others on people who are independent—which only means some one who has either earned enough to be independent or whose ancestors were producers at some other period—show that the Government do not intend to respect investments and saving. The Government cannot have it both ways. They cannot at one and the same time ask for national savings which provide a form of deferred purchases later on, and then turn on the people who do save and accuse them in derisory terms of being contemptible people who claim to be independent.

It has been well said, and it is particularly true of a great country like ours with a long history, that the essence of saving and investment is to secure a legal right on future production in which the beneficiary will not himself participate. If this generation in the House of Commons teaches the workers of this country that they can live in the present alone, take such capital as can be invested, but regard every one else as drones, then all thrift will go. That is one of the reasons why we are in a difficult financial position today. The desire to earn something for one's self and one's children and to leave one's children free to choose their own career and not be forced to choose their careers by economic circumstances, is deep-rooted in our being. The Government which recently withdrew the "home of your own" advertisement from national savings have now issued another one through the War Office with the astonishingly ironical suggestion that young men ought to go into the Army and learn about mechanics because one day they may want to own a garage or a filling station.

The right hon. and learned Gentleman, after talking about production, which went right through his speech, turned to agriculture, and I would like to deal with that subject. I believe that the talk about non-productive workers by the Minister of Labour is largely an attempt to get the great mass of the workers of this country to accept the direction of labour without really realising that it has happened. We are against direction of labour, whether for agriculture or anything else. We do not regard it as a possible means either of getting the workers we need or building up the society in which our people wish to live. The agricultural labourer was recently addressed by Mr. Priestley, who said this, and it has been quoted in my constituency: To know that you and your work are urgently needed may indeed be better than the vague liberties about which wealthy industrialists are so eloquent. So the agricultural worker has to lose his liberty. The right hon. and learned Gentleman knows as well as anybody else the disastrous situation in regard to rural housing—the failure to use the Housing (Rural Workers) Act, and its non-reimposition, in spite of the almost unanimous report of the Ministry of Health inquiry, the only adverse vote being that of the Minister's own wife. This demonstrates a tragic failure to provide the most elementary agricultural needs.

The Minister also dealt with agricultural machinery, and said that the farmers are now getting three times the machinery they had before the war, and there were loud cheers from the Government back benches. Of course, the reason largely is that, under the late Minister of Agriculture, there was a huge increase in mechanisation during the war, and, in addition, all sorts of urgent repairs were not done to agricultural machinery, which makes the need all the greater today. It was most unfair for the right hon. and learned Gentleman to, blame private industry for failure to provide ploughshares, if the right hon. and learned Gentleman was really serious about that, because he well knows that last year we exported £7 million worth of agricultural machinery and already this year £5.9 million worth had been exported up to June. It would, perhaps, be more sensible planning to have had some of this machinery on our own farms. My last comment on agriculture is this. Even if the Government hope of getting £100 million more in agricultural production by 1950 is realised, we shall only then be back at the level of agricultural production in 1945, when we handed over responsibility to the present Ministers.

The last reference I wish to make is to the question of the Empire's contribution to solving our present difficult economic situation. The right hon. and learned Gentleman made some reference to the Geneva conversations. We appreciate that it is difficult for him now to give us any clear indication of what agreement, if any, has been reached, but we would like him to realise that, I believe in his own party, and I know among the overwhelming mass of my own party, there is the deepest possible anxiety lest we should be betrayed, in the interests of multilateral trade, into sacrificing that Imperial Preference which can weld us into a strong economic union and enable us to weather the storm and thereby provide a real contribution to the solution of the problem of the whole world.

We realise that this country, which once, in the 70's of the last century, exported two-thirds of all the manufactured exports of the world, saw a fall to one-third by 1913 and to one-fifth by 1938. A good half of that one-fifth goes to markets where we have preferences. In 1938 the Empire took 32 per cent. of their imports from us, and the rest of the world took only eight per cent., and that is the measure of our competitive position in the terms of present world competition. I think it provides a great warning against making an agreement today with the United States, including Article 16 of the draft Charter, which forbids any increase of existing preferences or extension of any new ones without approval of the International Trade Organisation. We shall hope for an early statement on that matter. But I must warn the right hon. and learned Gentleman in advance that there will be the greatest possible opposition from the Government benches to any serious whittling down of Imperial Preference—[HON. MEMBERS: "Opposition benches."] Yes, Opposition benches; I was a little premature—no matter what temporary advantages may claim to have been provided.

I have covered a fairly wide field at, I hope, a somewhat slower speed than usual, although I rather doubt it. I would like to end on roughly the same note as I started. We welcome the speech of the right hon. and learned Gentleman. He gave an indication that this Government has offered a partnership to all sections of the community, political and industrial. He praised the cotton managers, the steel producers, and, of course, the workers as well, and, from time to time, hints that managers and salesmen also provided useful services crept in. I do not believe that the right hon. and learned Gentleman really thinks that planning by itself, leaving out all the human needs and opportunities, is going to solve any of our difficulties. Even the "Economist" said a week or two ago that if ever a community had been more planned against than planning, it is Britain in the last two years. Let the right hon. and learned Gentleman match his speech today with giving opportunities to industries, employers and workers, within the general broad directive of the Government of the day to work out their own salvation, remove as many controls as can possibly be removed and give opportunity again to people to do well in the world, and to hand oh a better heritage to their children than they themselves received. If he did so, he would be astonished at the response he would evoke.

9.57 p.m.

Mr. Chetwynd (Stockton-on-Tees)

Having listened to some of the speeches made by hon. Members opposite, I still do not know whether the Opposition want to help the Government in this serious position or not. Some have exulted in our difficulties. As we were told of the difficulties that face us, they cheered, and as I read the speeches of my opponent in the General Election, the present right hon. Member for Bromley (Mr. H. Macmillan), I wondered whether he really wanted to see us surmount this crisis, or to see the Government go down.

If the present Government do not survive this crisis, that does not mean that the party opposite will come back into power; it means that there will tie no future for this country as a whole. I believe that the Government will surmount the crisis, and that, when the final account is made at the next Election, some of the unpopular and courageous things we are now doing will be accounted to our credit by the electorate. We have been attacked for making promise; that have not been kept, but our great strength in the country today rests in the fact that we have made promises which we have kept. We have kept the goodwill and confidence of the bulk of the people in this country. When we hear some of the speeches that are made by hon. Members opposite we wonder what the Tory Party would do if they had to face this present crisis.

I recognise the greatness of the speech of my right hon. and learned Friend today; I recognise the necessity to cut capital expenditure at the present time. But we have to keep a sense of balance between the demands for exports and the essentials to maintain morale on the home front. It seems to me that, if we go out too much for export, in a few years' time we may find that our industry at home is not in an adequate position to meet the demands of the future. I. would like a more balanced account later on—perhaps in the White Paper—of what these capital expenditure cuts really mean. I would not like to see a severe slashing of the housing programme; I would not like to see a curtailment of factory development in the Development Areas. I welcome the parts of my right hon. and learned Friend's speech Which seemed to give encouragement to progress in the Development Areas. Earlier in the Debate, an hon. Member opposite said that there were many things that we have not done, and he invited us to name one successful thing which we have accomplished. The work which the Government have done to bring diversified industry and employment into those former distressed areas is one of the greatest things they have done in the past two years.

Debate adjourned.—[Mr. Hannan.]

Debate to be resumed Tomorrow.