HC Deb 27 October 1947 vol 443 cc517-607

3.37 p.m.

Sir Ralph Glyn (Abingdon)

In August last, by the direction of this House, a sub-committee of the Estimates Committee visited Germany in order to prepare a Report which is being considered by the House today. It is necessary to draw the attention of the House to the very large sums which are involved in administering the British zone and in looking after and paying for the necessary Forces of occupation. It amounts to something in the nature of £140 million annually. The sum is so large at this time of our present financial stringency that it seems necessary for this House to accept and consider a Report which attempts, at any rate, to point to some of the things which have led to this very great expenditure.

The first thing to realise is the background of the position now in Germany and how it has been brought about. There is no doubt at all that the quadripartite system has broken down completely. It is necessary to recall the various things that were laid down, and they are summarised in the Report: first, that during the period of occupation Germany should be treated as a single economic unit; secondly, that certain German administrative departments, headed by state secretaries, should be established; thirdly, that the essential commodities should be equitably shared between the zones so as to produce a planned economy throughout Germany and reduce the need for imports, and that the proceeds from current production and stock should be available in the first place for the payment of imports, thus ruling out the taking of reparations from current production; finally, that the removal of capital equipment should be completed by 2nd February of next year.

That was what was laid down, and there is no doubt at all that owing to the difficulties that have arisen, of which the House is fully aware, it has imposed upon those responsible for administration in Germany a most difficult task. I would make one plea, and that is that the great majority of those in the Control Commission are working long hours, treating this matter as one of great importance, and giving of their best, and it is wrong and mean for irresponsible people to make contributions to the newspapers which are very often without any foundation, which depress the morale of our own representatives out there and do not encourage the right type of people to join the Commission sion at the very time when we want the best we can find. There are hard cases, and the Committee were informed when we were there of two men who had finished their time with the Commission, had received definite appointments at home in industry and, when one article appeared in, I think, a Sunday newspaper, the prospective employer said: "If you belong to people like that, we will not employ you," and they were not given the positions. That is a terrible situation, and today I hope the House will realise that if they are public servants—and, after all, we are responsible for the way they are treated—they cannot answer back. It is high time that we took a line here and showed our disgust at these perpetual underhand attacks, which do nothing to improve British prestige and certainly hamper the work of the Commission.

The other difficulty we saw was the task of the bi-zonal arrangement and how to fit in the so-called British and American zones. That is a new situation and it means that we ought to look at this situation from a new angle. The methods of the United States are not quite the same as ours, and it is of the greatest importance that the bi-zonal arrangement, with its centre at present at Frankfurt, should be a success. There is, however, this added difficulty, which we ought to remember, that some of us on that Committee felt that although we could not agree with all the policy which was being carried out, it was not our task to make a report on policy. This Report now before the House deals with the way in which the policy is being interpreted and administered, but I think this House ought to appreciate that if there are constructive ideas at the back of the United States and ourselves to help Germany to get on her feet, we have to adopt them and go forward on those lines, and refuse from now onwards to be parties to a policy of pure revenge and the creation of a chaotic situation which will make the task of any administration on behalf of the Allies in Germany almost impossible.

The conclusions to which the Committee came are set out in the Report on page 25 and, with the permission of the House, I will deal briefly with one or two aspects of the administration to which I think the attention of the House should properly be drawn. We found that there was nothing in existence in the British zone to supervise local expenditure properly; by which I mean how the money, or rather the goods which the money has purchased, are being distributed. It is absolutely vital that there should be a proper organisation set up under Treasury Rules and Orders so that there shall be a check on the way in which these large sums are spent. I exclude from that, however, the expenditure on the three Services, and it is right to say that all the evidence we have had from the British Army of the Rhine, from the Royal Air Force and the Royal Navy shows that the control of expenditure by the three Services is excellent and that the administration is extremely good. In regard to the C.C.G. the problem is more difficult and more complex, but that, surely, is all the more reason why there should be a proper organisation on the spot set up to check this matter thoroughly and to root out anything that is wrong.

With regard to the set-up of the Control Commission, I should say one word because this check of the expenditure deals with the present method and the organisation now at work. One can express it, to the House in the simplest way by saying that it is a vertical organisation, a functional body or division which works from Berlin and through Frankfurt, and down to the zones in a vertical direction. Then there is a lay-out or horizontal organisation with the Regional Commissioners and their staffs, going right down to the Kreisoffizier who is a British official, working right down to the smallest unit of the German civil organisation. Incidentally, those Kreisoffiziers do not get many pats on the back, but there they are working quietly right through the British zone. Unfortunately, we did not have time to visit many of them or the groups, and, indeed, we had no time to see them actually at their work, but all the evidence we had showed that when you get the right type of British official in the Kreis or in the Kreis groups, and he gets the confidence of the Germans around him, he is making an enormous contribution towards helping the people in Germany to recover their position and to look at things in the way we hope in future they will look at them. Those men are isolated, and they must have—I hope they will have—the encouragement of this House to realise that, although they are not often seen and seldom heard of, we realise the great work they are doing day in and day out.

The divisional or functional organisation is something that has come down to us from the original military occupation. Then it was necessary to have, under strict military rule, controls working straight down from the top. Inevitably, however, there comes a point where the vertical meets the horizontal and there is the danger of a collision. Somebody has to make up his mind as to which is to be the future organisation on which we shall rely to ensure that British and Allied administration shall be carried out properly. To my mind, and I think to the minds of my colleagues, there is no doubt that the regional organisation is the one on which we should rely, but that depends entirely on the regional commissioners and their staffs being highly competent people, most carefully selected. It is rather ridiculous to assume that some British official with not much experience should go and talk to the Germans as if they were never any success in business and really knew nothing about it. That is not the fault of the individual, but of the method of selection of those who should be charged with these functions, and I think we ought to look very carefully into the type of person who is being chosen. As the Committee recommend, we ought to see that such people who are specialists are seconded from the Civil Service, or from industry, so that we can have the pick of the very best, and that they will not suffer in their position or chance of promotion or pension by being chosen.

Some of us on the Committee had the opportunity of going to Germany on a similar task last year. There is no doubt that in comparing last year with this the general attitude in Germany seems to be one of increased sullenness and disappointment. In those circumstances, it is all the more important that they should have great respect and regard for those charged by this House and by the Government to carry out these very onerous tasks. I am quite sure the future lies in showing friendship to the German people and helping them, rather than by sitting side by side in everything and having a parallel organisation in developing trade and industry which is irksome to a German who really knows his own business, expensive to the taxpayer here, and gives a futile idea of our own methods for European recovery in the economic and commercial field.

I therefore emphasise this point, which I think is the most important of all, that numbers do not matter; what matters is the quality. If we get the quality right, we must be prepared to pay a salary for which they can work, quite apart from Civil Service scales. Either we are going to do the job properly, or not at all, and if we are not going to do it at all, let us come out of the country; but if we do that, we throw away the fruits of victory and disappoint the Germans who rely entirely on us to the exclusion of every other country to help them get on their feet again and to go forward. Surely this is a very great opportunity for this country. Let us seize it with both hands. There is of course criticism as to numbers. It is very easy to be critical on numbers, but I think it is a fact that the Commander-in-Chief and the Deputy Military Governor, shortly to assume command, are very fully aware of these things, and they are combing the organisation. I will not detain the House with details, but we make certain recommendations as to how we think considerable economies can be made.

The question of agriculture is of most tremendous importance. One matter which caused us a good deal of difficulty is the new agrarian system. It may be right, or it may be wrong to cut up a number of the large estates. It may be thought that those people who are large landowners are potential supporters of future Nazi organisations, but what matters at this moment, whatever general policy may be, is to do nothing whatever which will reduce the amount of food Germany can produce from her own soil. It is surely obvious that if there are mechanical means and large fields a better economy can be gained by mechanisation of large areas than of small. I think the test of the matter must be, at this time, what system is going to produce most food in Germany, because otherwise it will mean an extra burden on the British and United States taxpayers who have to bring the food into Germany. We should also pay attention to the fact that Germany before the war was not only able to produce all the agricultural machinery and fertilisers and the rest which she wanted for her own economy, but exported them on a considerable scale. Of all the follies I think the greatest would be to prevent German manufacturers producing ploughs and machines which are wanted for increasing food production. That ought to be a very high priority.

As the House knows, the production of coal is entirely tied to food; the two curves go together. As will be seen from the Report, an extraordinary thing happened to us when we met the trade union members of the mining industry in Essen. We fully expected to hear from them all kinds of things about conditions of employment, and so forth, but what they felt most keenly about was whether it was possible to work some barter system, to work one extra shift to get more potatoes. It is absolutely necessary that the scales of food for the coalminer should be maintained and everything done to increase food production in Germany and to stop the business of knocking off early in various works so that people can go foraging in the districts around the towns. That is bad for everyone, and appallingly bad for production. I found in one shop in Essen that they were working, with a quarter of an hour's break, from seven in the morning to quarter past three in the afternoon. That cannot lead to high rates of production.

The problem of displaced persons is a tremendous burden on the British taxpayer. Above all things it is a human problem of a very acute and agonising kind. There is a different administration in the British zone where it is in the hands of the C.C.G. from the American zone, where it is in the hands of the I.R.O., and what will happen under the bi-zonal arrangements I do not know. I am certain that proposals can be agreed between the British and United States zones terminating this business and they should be announced as soon as possible. I know it is difficult for the Government to make an announcement, but I believe that it is our business as hon. Members of the House charged with the task of inquiring into expenditure to point out that at the moment the system lends, itself to operations on the black market. We should lay it down that certain comforts, and luxuries possibly, could be given to these people. On the face of it that is all right, but what actually happens is that the value of cigarettes on the black market is so tremendous that it pays these persons to remain as D.Ps. with comforts provided by the Allies, rather than to do some honest work or to go back to their own countries.

I do not think it is realised what a tremendous contribution this country has already made in this matter. We are not inclined to blow our own trumpet very much, but in this case we must do so and in the Report it is pointed out that we have looked after no fewer than 170,000 if we include the Poles, as we are entitled to do. If, however, every country in the new world as well as the old were to make anything like a pro rata contribution the matter would be settled. I hope it will be possible to lay down a definite time limit after which there will be no one in the categories of D.Ps. and that it will be forbidden to select only a particular group of males and that a cross-section will be taken. Incidentally, I think it was a mistake—there may be reasons which I was unable to ascertain—for us to have laid down that we will take the men but not their wives or mothers. The men who have accepted such conditions are not the best ones. The decent type will say "No, I will go with my wife—or my mother—or not go at all." To say that their wives and mothers cannot go with them is wrong. It is fair to say that I certainly got the impression that the contribution of the Ministry of Labour as a Government Department towards the problem in Germany, has been better and higher than that of any other Department. They did make promises that womenfolk of the men who came here would be allowed to join them within a certain period. Unfortunately, when we were there we were told that that date had passed, and that the men were now anxious because their womenfolk had not come, and that they were wondering what would happen. There ought to be no doubt about a thing like that. I hope it will be possible for the Department to consider the proposals of a constructive kind made in this Report, and try to solve this matter.

A word on monetary reform. The whole of the German economy is completely upset because there is no foreign exchange department. We have put off this matter time and again, and it is absolutely necessary, first of all, to have an inquiry into internal prices in Germany and the quantity of consumer goods available there, and then have some inquiry to see how we can fix a proper exchange value for the mark. We have always been thinking in terms which I hope may yet be accomplished of a fusion of all the zones in Germany. That probably sounds too Utopian now, but at any rate, supposing that does not happen, there is no reason why an inquiry should not now be made to solve the monetary situation and exchange position at present so unstable. Without that we shall not be able to build up the exports, and until we build up the exports, the continuing burden falls on the British taxpayer. That is the long and short of the whole matter.

There is one other matter with regard to the social and educative side. There has been appointed a man of very high principle, and a man who, I believe, will make a wonderful contribution to the British effort in Germany. I refer to Mr. Birley, who has given up a very high position in this country and shown himself to be a real crusader. He deserves all the support he can possibly have. In this Report several paragraphs are devoted to this educational problem, and I hope that the Government may, at any rate, do one thing—let us see to it that there is a free interchange between the two countries. It ought to be possible for British teachers and professors to go to Germany easily without all these restrictions, and ridiculous passport regulations, which take so long that the occasion of the lecture has long gone by when the lecturer gets there. Surely what we want to do is to strike the imagination of the Germans and try to make them see what it is in British education that really matters.

It may be that the final and lasting thing which we can do to Germany is to bring her round to the point of view and outlook produced by a free democratic type of education. The universities at the moment are undoubtedly suffering from having a very old group of professors, with also younger men in the faculty who are trying to attain positions so as to make their views felt. Mr. Birley and people like him, by going out there and getting to know German teachers, can make this fusion between the old and the young much more easily accomplished, and can do something, I am convinced, to transform the outlook of the German Hitler Youth type into something new and better. That is the great topic—the youth of Germany today, and what they are to be. The period of our stay in Germany should be measured and matched by the time it will take, by influence and example, to transform the disappointed, wondering, puzzled German youth today, being without discipline, which is the only thing they really understand, and having all sorts of doctrines put to them and not knowing what to believe. It is that leadership of German youth today which will make the character of Germany in 25 years time. Surely we should attach the greatest importance to that problem, and we should dedicate the services of our best people to helping forward its solution.

I wish to say a few words about the Services. There is a great responsibility resting upon this House. It has been laid down that these young men shall go out there and do their training. That may be quite all right, but there have been Debates in another place, and the matter has been mentioned here, in regard to the moral difficulties which confront these young men when they go to Germany. It is quite impossible to prevent these things from happening altogether but it is more than possible and, indeed, right to see that the condtions under which they serve are such that there is ample recreation, that there is as little scattering of the Forces as possible, that there is the concentration that is so necessary, and that every thing is done to encourage those things that are healthy and sound from a physical point of view. The out-of-balance condition of the sexes in Germany has to be remembered, and it is not often appreciated how this creates psychological factors which are unique. It is no use condemning people, and one comes to take things as one finds them, but it would be a profound mistake if certain proposals for reducing the amenities for troops in the British zone were carried out. That would seem to me to be the worst form of economy. I trust that the Foreign Secretary will use his influence with the other Departments concerned to see that these facilities are extended, if anything, and that they are fused into what is required by the Germans themselves.

One of the greatest mistakes which was made in the war by E.N.S.A. was that of always thinking that Service men liked vulgar things. They too often played down to them instead of playing up. I am convinced that it is fantastic to shut the few opera houses that remain and not have German operas, plays, concerts, etc., and instead have some futile, third-rate music-hall show put on which prevents that other better music being heard. That indicates that the atmosphere is wrong, and that we have taken a wrong direction. We cannot go on forever having Germans treated as being different from other people. We should bring them into our way of thought and life and help them along, and one of the best ways of doing that is to show that we have cultural ideas which are capable of appreciating opera and that we are not only anxious to see some other third-rate show. In regard to the troops it is also very important that we should remember that whatever we may spend on the C.C.G., the basis of our position in Germany is the efficiency of our Forces to carry out their duties, and especially in a country like Germany, we cannot afford to rely solely on National Service recruits. We should have a few seasoned troops there, to show that we still have power and authority. I should like to see some Marines with the Chatham Division band go over there.

We should be proud of what we have done—proud but not boastful, because there is a difference. The Germans told us that they had nothing but the highest regard for the way in which the occupying Forces had behaved. The one thing they would hate would be to see anything done which would mean a reduction in these Forces which would weaken the confidence which we must give those in authority if they are to do their duty. I believe that Germany is likely to be a plague spot in Europe unless we hasten forward some solution. The solution can be found by giving confidence to those who carry out their tasks on our behalf out there, and by being determined to be held back no longer by those fetters which are imposed on us by the views of other people with whom we have little sympathy and which are imposed as a relic of the Potsdam Agreement. Let us make up our minds boldly to go forward and carry through our own ideas, with the United States if the others will not come in. Above all, let us carry through those principles in which we believe and on which the Germans look to us for help.

4.12 p.m.

Mr. John Hynd (Sheffield, Attercliffe)

I welcome, as I think the House will welcome, the opportunity for this Debate on the German situation at this juncture. I wish to compliment the hon. Member for Abingdon (Sir R. Glyn) and his colleagues on the Select Committee for the admirable way in which they have sized up the situation in Germany in the course of what must have been a very brief visit, and I congratulate them on putting their finger on the proper spots. The House will welcome this Debate even more because of the fact that whilst, for two years now in Germany and other quarters we have been putting forward heroic efforts to try to overcome the problems of that country, so far we have succeeded in achieving nothing but the maintenance of a very low standard of living in a country which, but for our efforts, might have fallen into complete neglect and possibly into political and social death. That and the destruction of what I hope are the last remnants of Nazi influence is about the sum total of the achievements of these two years of hard struggle.

The immediate reasons for the failure are pretty well known. There is the world shortage of food which has affected Germany more than any other country because Germany has been last in the queue. There is the colossal incomprehensible destruction of German towns and German industry. There is the tremendous and growing despair, to which the hon. Member for Abingdon has already referred, of the people in Germany due to these conditions, due to the perpetual hunger and the cold, the crowding together under sub-human conditions of accommodation. These are now having their inevitable effect. It is not now a question of discussing whether or not it serves them right. That is beside the point.

What we must consider are the political, economic and social repercussions of the situation, not only upon our own country but upon the whole of European economy and the future of world peace. I have referred to the immediate causes of the situation—the immediate causes of our failure to achieve success in Germany. The ultimate causes have already been referred to by the hon. Member for Abingdon. These ultimate causes are simply that the Allies themselves have failed to put into operation the conditions upon which they agreed when they undertook the responsibility for the occupation of Germany. I am particularly glad that the Select Committee has emphasised that fact. In passing, I may say that I am also glad that the Select Committee has made such a point of defending generally the conduct and integrity of the Control Commission staff. I hope that their Report and the comments made by the hon. Member for Abingdon will prevent this Debate from being bedevilled and sidetracked into that old controversy. But the fact remains that all our efforts have been rendered useless by the failure of the Allies themselves.

I think the House will appreciate now—I think it is generally accepted throughout the country, and, at least, it has disappeared from our newspapers—that the food problem in Germany is real, that there is a fantastic shortage of food, and that there has been a prolonged undernourishment of practically the whole of the population though, incidentally, the situation has changed somewhat now that the black market is getting a bigger hold with the collapse of faith in the currency to which the hon. Member for Abingdon referred. Undoubtedly, there are more and more people in Germany who are beginning to live fairly substantial lives while still more are sinking deeper and deeper into despair. With another winter coming upon us, with a third winter with no hope and no apparent prospects, I question whether they are likely to survive.

Industry is stagnant, despite the improvement in the production of coal. The fact is that there is a shortage of food, and of manpower. Such manpower as is available is so under-nourished as to be to produce only to the extent referred to by the hon. Member for Abingdon. The factories are not turning out the necessary machinery and equipment to enable the mines to go forward full blast and to get somewhere nearer the 400,000 tons daily production which they had pre-war. Agricultural implements are not being produced in sufficient quantity because of the shortage of steel arising from the shortage of coal and food. Industry remains stagnant. A great deal depends on transport. For example, the distribution of the accumulating coal stocks at the pit head, which this winter will be of little use unless transport is available, is another difficulty. Transport appears to be in a decline because the machinery, manpower, coal and food are not available to enable the rehabilitation of locomotives and trucks. The agricultural industry, upon which the indigenous food supplies depend, is suffering from the same factors—shortage of machinery, manpower, coal and agricultural implements, in addition to fertilisers and seeds.

The question of consumer goods is most important in this picture. Consumer goods are suffering from the same shortcomings as are afflicting every other industry. The result is that no incentive is offered to the worker to earn wages, which are of little value, or to the producer, the industrialist, to put his factory into production, because he cannot pay his way and cannot acquire for money the raw materials and machinery which are necessary. Therefore, the black market is taking control. All this is mainly due not to the world food situation but to the failure of the Allies themselves to implement their own undertakings and obligations. This is taking place in a country which possesses tremendous resources which, indeed, are largely concentrated in the British zone. It is taking place in a country which possesses people of great genius who are being thwarted, starved and deprived of the necessary authority, perhaps necessarily in an occupied country though probably not to the extent to which it has gone in the last two years. They are, therefore, a people who are unable to apply their genius and resources to the raw materials available to them. We must ask ourselves, therefore, how much longer this is to go on.

I pay tribute to the remarkable patience the Foreign Secretary has shown in past meetings of the Foreign Ministers. I also wish to pay unstinting tribute, as a member on the back benches, to the representatives of the British Government on the Control Commission in Berlin. But we are now, I feel, reaching the point where we can test whether our patience has been justified or not. The Foreign Minister's Conference resumes next month, and it is right that we should make every possible effort to try to ensure success in reaching agreement between the four Powers for the implementation of their undertakings in regard to the administration of Germany. We must make every effort, but, if we are to judge from past experience, if we are to judge from the growing disunity, indeed hostility, which has been shown amongst the United Nations from day to day, I think the chances of success are few, if they exist at all.

I want to ask the Foreign Secretary a few questions, but it is obvious that my right hon. Friend cannot answer specifically now the kind of questions which I am going to ask, but I do ask them, nevertheless, in rhetorical form and hope that he will take note of them. In the event of failure to reach agreement with the other Foreign Ministers at the Conference next month, have we got our plans prepared and ready to put into operation for the administration of a Western Germany, because that is the only apparent alternative? I wish, as do most hon. Members, that there were some other alternative, because I fully realise that the splitting of Germany, which means further splitting Europe, will have grave reverberations, which will spread throughout the whole world, resounding for many years in bitterness and in anxiety for all the peoples of the world. I realise that that would be a calamity, but I also realise that it would be no less a calamity if the present situation in Germany, and, therefore, in Europe, were to be allowed to continue.

I think we must be prepared for the alternative that must face us in the event of the breakdown of the Conference. Have we, for example, in conjunction with our American colleagues, prepared an emergency food policy? Food, it has been generally agreed, is the basis of the whole problem, and it is quite clear that, whatever provisions may be made under the Marshall Plan for Germany—and these will not come into operation immediately—if, as the Select Committee point out in their Report, there is to be any increase in the output of farm implements, mining machinery and the production of consumer goods, on which all these other things so much depend, there must be an immediate improvement in the food situation, which necessarily depends primarily on increased imports. If the question is asked where the food is to come from, I think the answer is that there is only one substantial source from which it can come. The Americans are in this as much as we are. If we are pouring our pounds down the drain in Germany, the Americans are pouring uncounted dollars down the drain in Germany, and will have to continue doing so as long as the present situation exists. Is it not possible for our American friends to invest food in Germany in the hope of a return in the early restoration of the German economy, and, therefore, a saving of future dollars? The other aspect of the food problem is that of German indigenous production. The difficulty here arises in the production of agricultural implements, which is dependent upon steel, and, again, on coal. The Select Committee, in Appendix IV of the Report, state very clearly that the restoration of German agriculture requires increased supplies of fertilisers, high quality seed, farm requisites and machinery. It has been pointed out by the hon. Member for Abingdon that, if we are to solve this food problem, which is the most immediate and urgent of all, we must produce as much as possible in agricultural implements as can be produced from the available industrial recources of Germany at the present time. It will not be done, of course, if we educe those resources now.

Then there is the question of the conversion of currency. How far have we prepared plans for currency reform, whatever kind of Germany may result from the Foreign Ministers' Conference—whether a unitary Germany or a unitary Western Germany? I know the efforts which this country has made in the past few years to achieve that; I know that, so long as there was still the possibility of German unity, or the possibility of getting agreement on the Potsdam conditions, it would have been futile to try the conversion of currency in one part of Germany, but, if we are faced with that position following the Foreign Ministers' Conference, are we ready and have we the plans ready now to apply an immediate currency conversion scheme, either for the whole of Germany or for the Western zones?

Whatever the importance of the food situation, I would like the House to place even more emphasis on this question of currency conversion, which is at the very foundation of the administration of our zone in Germany today than is given in the Select Committee's Report. I know all the difficulties. We can bring in the food, produce the goods, establish a Ger man administration administered by Germans, but, if there is the tremendous inflation that is always the inevitable result of these conditions—

Sir Arthur Salter (Oxford University)

Will the hon. Gentleman allow me? Would he inform the House whether there is at present an agreed limitation in the number of notes that may be issued by the different occupying Powers and are convertible into German currency?

Mr. Hynd

If the right hon. Gentleman will permit me, I should prefer that question to be answered by those in authority, and not by me. I am now asking questions, not answering them. Unless we get this conversion of currency, both for internal purposes—for fixing the value of the mark—and for external purposes, there will be no incentive for the workers to produce or to establish a satisfactory export policy. The question of a German central authority also immediately arises in this context. Whatever may be the result of the Foreign Ministers' Conference, there must be, as soon as possible, a properly elected German central authority, whether for all Germany or for the Western zones, which will have real responsibility to its constituents, and which could take over real responsibility for a large number of those matters which the Control Commission would have been only too glad to hand over to the Germans before now if such an authority had existed. In the absence of such a properly constituted and responsible authority, a large number of our measures are likely to meet with but little success. That has already been demonstrated by the results of the bi-zonal agreement of last year, which failed in some of its main purposes simply because there was not the necessary political backing.

The great question which is agitating the minds of all thinking people is the question of the level of industry and the present dismantling policy which is going on. I want to ask the Foreign Secretary whether he is now satisfied that the present assumed level of industry, based upon an 11,500,000 tons steel production, is anything more than a mirage, anything more than a bare statistical calculation made in Berlin or London? I know, and I hope it will be reported in Germany, that this country has made a tremendous contribution towards destroying the old conception of the German level of industry—the impossible conception that existed last year and into which we were forced as a compromise pending the continuation of our efforts for its modification. I think that is now being generally understood in Germany, but I very much question whether the 11,500,000 tons of steel production is, in fact, a realistic assessment of what we propose to leave in Germany after the present quota of factories and plants have been removed.

I want to say again that I am not concerned here with the question of the justice of reparations, or otherwise. It is not a question of how much damage was done by Germany in other countries, or what these countries' needs may be; it is a question of practical politics and economics. I have never been able to understand the economics of putting 2,000 men at work for twelve months—2,000 man years—dismantling a rusty old steel factory, breaking it up, marking up the parts, packing them up into crates, and sending them to some other country, where it will probably take two or three years to rebuild the factory, and when, in four or five years' time, someone will have an out-of-date and rusty factory, whereas, if we had left it in Germany producing steel, we should probably have been able to build in the same time, and without any loss, a new, modern, well equipped up-to-date factory.

I have no time to go further into that particular aspect, but I want to put my own feelings on record. I know that our Allies are involved; I know that, possibly, my right hon. Friend the Foreign Secretary would like to wash his hands of the whole unsavoury business. But a lot of Allies are clamouring for these reparations. Is it too much to ask that those Allies should be persuaded to consider the position? After all, they have, for nearly two years, been pursuing the fiasco of Brussels, of bidding and bartering, and attempting to get this or that out of Germany without, apparently, any prospects of immediate results. Whatever may be said in answer to Questions in this House, it is true that some of these factories are busy at the present time making those very things for which the Select Committee says that Germany is starving. They are repairing locomotives, making trucks, mining machinery and equipment, agricultural implements, and, incidentally, using the manpower that is available in that constructive way, instead of in a destructive way.

My hon. Friend the Member for Uxbridge (Mr. Beswick) asked a Question this afternoon about a particular air raid shelter in Berlin which had been used for hospital purposes. I do not know this shelter, but I do know the use to which such shelters have been put. It may be that an air raid shelter is a useful thing in the case of war. But there is no immediate danger, I think, of the British zone going to war against us, and, even if there were a war, the air raid shelter would be at the disposal of our own forces in Germany. Therefore, there is nothing to fear at the moment. Such places are being used for a useful purpose. I, personally, have had to intervene to prevent great blocks of modern offices from being destroyed for the sole reason that they had been offices which served some armaments works.

That is the picture, and I hope that my right hon. Friend the Foreign Secretary will pay close attention to the question of the dismantling or destruction of so called "war potentials." It is no good telling us that the dismantling" work will be undertaken by only a small proportion of the German workers. In that regard, the figure of 1 per cent. has been bandied about. Taken over the two zones, that figure may be correct, but there will be no dismantling in Bavaria or in the greater part of the two zones. This 1 per cent., or some 30,000 or 50,000 workers, will be in a few towns in the Ruhr, and will represent an enormous proportion of their manpower. It also represents a very serious threat to the morale of the people upon whom we depend so much.

I understand that a concession has been made, to the extent that we are allowing those factories at present in useful production to complete their current orders. By doing that, are we not, in fact, admitting that these factories are necessary? Why should we stop them at the orders already on the office desk when there is a long queue of no less urgent orders clamouring to be carried out, and on which our success in Germany so much depends? I am satisfied that this is false economy. This is a very difficult and important problem to discuss at this juncture. I am far from wishing to exacerbate German opinion and the feelings which must be experienced by the many thousands of German workers organised in trade unions—which are, after all, a child of our own creation—who are expected to carry out this job. They are the only ones who can carry it out. But I cannot see how a big job of this kind can be satisfactorily carried out under present conditions in Germany, and in view of the lowering of morale which must be created by these operations. It can only be done with German co-operation, and there are many reasons why the Germans should co-operate.

Having said that, I should like to make this appeal to the German trade unions and to other responsible German representatives that, whatever may be the final decisions on these matters, and to whatever extent they may be made in cooperation and consultation with the German authorities, they must realise that any attempts to oppose, to sabotage, to delay or to go slow, or to take even more serious steps, can only have the most drastic results on the whole of the German people, because, in the delicately poised position of German economy today, any failure of the workers to put in of their very best, or any breakdown of machinery or of social order can only mean mass starvation. The distribution of even the small ration available today depends on the efficient working of every piece of the machine.

Therefore, whatever may be the final outcome of this, it is essential that the Germans should co-operate. But are they being given sufficient opportunity to cooperate as much as they could? I do not believe they are, and I do not believe that it is possible for them to be given that opportunity until we have responsible German administrations covering either the whole or part of Germany as soon as may be after the Foreign Ministers' Conference. I suggest that we should get on with dismantling the real war factories. There is no difference of opinion about that, and there is plenty of such dismantling to be done in the next few months. We should concentrate whatever forces of labour we may wish on that particular job, but, by the time the Foreign Ministers' Conference is over, we shall know where we stand, and whether we can set up a responsible German authority. Let us then get together with them, and tell them that this readjustment of German industry has got to take place. I can assure the House that they themselves agree with that. There must be a readjustment of German economy, and we must get them to agree to the dispersal of the population that will be necessary, and to the readjustment of industry and the plants that can best be spared. It may not be perfect, and it may, perhaps, be even unjust. It may be that they owe us a lot more. But we have to achieve success, and we can only achieve it with their co-operation.

I would have liked to say quite a lot about the purposes of the big operation at present going on with regard to forbidden and restricted industries. I want to say this much, that there is no truth in the suggestion that British policy in this respect is influenced by the question of German competition with British trade. I hope that fact will be reported in Germany. Having said that, I would further say that our whole policy has been clouded, in my opinion, by an exaggerated fear of what is known as "war potential production." I cannot see that we can prevent any country with a seaboard from having a mercantile marine. I also cannot see the sense, in present food conditions in Germany, of trying to prevent fishermen in Germany from taking the boats that could be made available for fishing in the deeper and more distant waters beyond the already overcrowded North Sea fishing grounds. Fishing boats themselves do not constitute a fleet, and the country is badly in need of the services of such boats and men as are available. I do not know whether clocks and watches are still regarded as war potential. I believe that roller bearings, synthetic oil and rubber, of which Europe stands in need today, are regarded as war potential. So are locomotives. Everything from rolling stock to cotton shirts can be regarded as war potential.

We must be realistic about this matter. We are approaching the situation two years too late. I believe that if we had tackled the problem on a realistic basis two years ago, it might have been possible to achieve something. Is it realistic to try to build up a democratic Germany, to encourage German trade unions to build themselves up on the lines of British trade unions, is it realistic to try to dictate policy to them in this fashion today and, at the same time, deliberately restrict instead of increase production, of which the Select Committee has told us so clearly and so rightly Germany is in such desperate need? We have declared in the Moscow Declaration that our purpose is not only the de-Nazification and demilitarisation of Germany, but the establishment of a German democracy which will be able to take its place in the ranks of the democratic and peace-loving nations. I can assure the Foreign Secretary that in Germany there are real democrats. Not all Germans are Nazis. Those who are taking that democratic stand at the present time, however shallow it may have been at the beginning, have now committed themselves, and they are our best guarantee against a resurgence of Nazism or German aggression, for it is they who have most to fear.

I conclude by echoing the words which have been uttered by the hon. Member for Abingdon. If we are to succeed we must, above all, realise that there are in Germany people who are anxious to be our friends and that our job now is to encourage and not discourage them. Given their co-operation, we can succeed. With their hostility and growing bitterness, which are being engendered by the continuation of the present situation, we can only fail.

4.42 p.m.

Mr. Emrys Roberts (Merioneth)

I find myself in some difficulty in following the hon. Member for Attercliffe (Mr. J. Hynd), as he has spoken with such firsthand knowledge and authority and particularly as I want to refer to some of the matters which he has covered in detail I would like to refer to the proposal to dismantle over 600 factories in the British and American zones, and to record the foreboding and fear with which my hon. Friends and I on this bench view that proposal. The hon. Member for Attercliffe has stated the arguments in detail, and it is barely necessary for me to do more than say how much I agree with all that he has said on the subject. There are, however, certain questions which I would like to put to the Foreign Secretary.

First, I would like to know what exactly is the purpose of this dismantling, because there seems to be some confusion. Is the object one of security or of reparations? There seem to me to be two entirely different objects. If the object of dismantling is one of security, then it seems to most of us that, in view of the present conditions in Germany further security measures are not necessary. As a result of the policy of unconditional surrender, the bombing of Germany and the devastated condition of Germany, which has been seen by those Members of this House who have visited the country, it is perfectly clear that from the point of view of security and dissuading Germany from making war, there is no reason for further dismantling of German production. As to the other reason—reparations—I think the proposal is directly contrary to our interests and those of Germany. Surely, we should proceed on the principle that reparations should not be forthcoming until Germany is again solvent and productive. So long as a policy of dismantling is pursued, Germany will continue to be insolvent and a charge on the British taxpayer. I would like an answer to the question whether the purpose of dismantling is for the sake of security or reparations. It seems to me that by neither approach can it be justified.

I recognise that when we speak about this matter in the House, it behoves us to speak with some restraint in view of the foreboding and gloom which the proposals have caused in Germany and the general difficulty of obtaining co-operation from the Germans at the moment. The hon. Member for Abingdon (Sir R. Glyn), who spoke with authority after his recent visit to Germany, referred to the prevailing German attitude as being predominantly one of sullenness—a sullen-ness which I believe has been aggravated and deepened by these dismantling proposals. Every responsible German leader has condemned these proposals in very sweeping terms. German leaders, who naturally look to us and to the Western Powers for co-operation, have spoken in the strongest terms about the dismantling proposals. For example, Dr. Schumacher, President of the Social Democratic Party, went so far as to say that in its psychological consequences, the dismantling proposals meant the torpedoeing of the Marshall Plan. Similarly, they have been criticised by Dr. Adenauer, President of the Christian Democratic Union, and by one member of the Economic Council, Dr. Kaufman, who went so far as to call the proposals a diktat. We have heard that word used in other senses before now. Dr. Kaufman said that the total amount involved in the plan of August, 1947, was imposed and not agreed by negotiation. All over Western Germany I think that about eight Prime Ministers and ministers of economics have protested.

The Germans have had 14 days in which to discuss the question of the particular factories to be dismantled, but they have had no chance of negotiating the general level of the dismantling proposals. Therefore, I wish to ask the Foreign Secretary whether he really thinks there is any chance of reconciling the opinion of the German leaders to these proposals. With some authority, I say that there are some things which one cannot explain to a nation. I think any Welshman in this House can understand what I mean. There are some things imposed from" outside which can never be explained to a nation. At this moment, when our chance of establishing a solvent, productive and peaceful Germany are hanging in the balance, we shall not be able to explain this proposal to the German leaders of public opinion or to the German people. If it is persisted in, it will remain for years a bitter memory that will militate against co-operation between a peaceful Germany and the British people.

It is very difficult, as the hon. Member for Attercliffe pointed out—indeed, it is almost impossible—to understand the selection of some of these factories for dismantling. For example, soap-making factories are included. When I was in Germany a year ago I was shown a commodity which was said to be soap. The piece I saw was about half an inch thick, two inches long by two and a half inches wide. It was gritty material. It was supposed to represent the soap ration for a German for one month. On any sane approach how can the inclusion of soap-making factories in the list of factories for dismantling be justified? Other factories for dismantling are those making chains and conveyor belts.

I have particulars here of a factory in Wuppertal, an old established factory which makes chains and bolts and nuts. About 90 per cent. of its production of chains is in the shape of conveyor belts for the German coal mines. It has been all along one of the difficulties with regard to the equipment of the German coal mines that they have not been able to get conveyor belts, and at the present time their supplies are only 50 per cent. of their requirements. How can the inclusion, in the plans for dismantling, of an old-established factory making conveyor belts for the coal mines be justified? This factory was bombed during the war by the R.A.F., but such was its importance to the German coal mines that it was repaired and put in production again. Yet now that factory has been listed for dismantling. Another complaint was mentioned by the Mayor of Bochum last week, when he said that the extent of dismantling to be undertaken was announced without clear indication of what exactly was to be dismantled.

If Europe is to come through the next few years, if this country is to come through the economic difficulties of the next few years, we shall need all the resources of every part of Europe. We shall certainly need all the coal and all the steel that Germany can give us. Before the war, German coal mines used about 800,000 tons of steel. Their present allocation is only 300,000 tons. Yet steel plants are among those which are to be most heavily dismantled under the level of industry plan. How can we expect maximum production from the coal mines of the Ruhr, which are crying out for steel, for there is a great shortage of steel in the Ruhr coal mines—how can we expect that maximum production when we have limited steel production to 65 per cent. of existing capacity? Round up with the production of coal is its transport. The hon. Member for Attercliffe referred to the requirements of steel for locomotives, rolling stock, and permanent way. The railways are some of the most important consumers of steel. On that approach, too, it is impossible to justify the dismantling of steel plants.

There is much more to be said, but other speakers will, no doubt, further explore other aspects of these proposals. Unfortunately, this House was not sitting when the level of industry plan was published in August. I think it needs to be justified in very great detail to this House. We need a very full statement from the Foreign Secretary on the level of industry plan. On the information before us it is impossible not to feel that it is one of the most significant steps that we have taken to alienate the co-operation of the German people. In Germany there are new governments, very fragile governments, taking the first precarious steps in democracy. They need all the backing and help we can give them. We have put their ministers into a tremendous difficulty by the publication of this plan, and, unless there is urgent reconsideration of it, it may jeopardise the existence of those newly founded democratic governments. I know too well that the revised level of industry plan is an improvement on the proposals of March, 1946. I know that it is said that it is meant to imply a greater concentration and less dispersal of German industry. Nevertheless, as the "Manchester Guardian" points out in a leading article today: The proposals for dismantling are concrete and immediate. The plan for recovery is vague and remote. It would have been better if the proposals had been put forward in conjunction with concrete, positive proposals. I say, let the Government reconsider the plan—with our Allies, because, after all, we and the United States of America are formidable participants in these reparations. Let us reconsider this level of industry plan again. If we fail to do that, let us, at least, work out as soon as we can concrete recovery proposals. I know the difficulties facing His Majesty's Government, difficulties not of their own creation; but I think that those are two conditions we must fulfil if we are to make Germany solvent, productive and peaceful and a contributor to European recovery.

4.57 p.m.

Mr. Alex. Anderson (Motherwell)

Like the hon. Gentleman the Member for Abingdon (Sir R. Glyn) I was a member of the sub-Committee of the Select Committee on Estimates that visited Germany last year and this year to report on expenditure by the Control Commission, and I feel that I must subscribe to his opinion that between last year and this year there has been very little sign of improvement in Germany, and, indeed, very definite signs of positive deterioration. There is more in Germany than mere sullenness. There is a feeling of complete hopelessness, a feeling that there is little prospect of ever improving or even maintaining their very low material scales. Inevitably, also, in the minds of the German people there is a tendency to put the blame for this lack of quick recovery at the door of the occupying Powers. However unfair or unjust that may be, we must, at least, admit that such a tendency is natural, and we must take the utmost care that we, as an occupying Power, do nothing which will give colour to such an accusation.

After reviewing the position of Germany today, I think that we in this House and in this country should remember one or two fundamental changes that have taken place in the last four or five years. First of all, when we talk of Germany, we are accustomed to think of the Germany of 1938, 1939 and 1940, that sprawling State which spread over the whole centre of Europe, which had a very high industrial potential, and which had an economy, even then, which, while not quite balanced, was very nearly a balanced economy. Today, Germany, even if we unite the four zones, is a dwarfed, truncated Germany, which has less economic value. It can no longer feed itself, and it is no longer capable, apart altogether from dismantling of factories, of anything like the level of industry which it then possessed.

Secondly, in this Germany we have been given the British zone to control; and in the British zone we have problems of a complexity and difficulty which obtain in no other of the zones. Our British zone is very highly industrialised; it contains the great seaport of Hamburg, the third biggest port in Europe; it contains the great industrial area of the Ruhr, and if the Ruhr is the heart of industrial Germany it is also the dynamo of Western Europe, and anything which affects the Ruhr affects the whole economy of Western Europe. It is a zone which has suffered more from war, in damage and dislocation, than any other zone in Germany. It is full of displaced persons and refugees who have fled to it from the rest of Germany. Today, it has the worst balanced economy in Germany. Prior to 1939, this North-West German zone imported from Eastern Germany 900,000 tons of bread grains and wheat crops: today such an import is completely non-existent.

In our approach to the British problem in the North-West zone, and to the difficulties of the Foreign Secretary in carrying out a British policy, we should also remember that in the North-West German zone we are a British agency carrying out a quadripartite policy with which very often we are not in sympathy, and that we have not a free hand to take the course we should like to take. That means we often have to indulge in compromise, because our actions are not governed by purely economic considerations; we have to take into account political implications of the greatest gravity. Until we have made up our minds what is to be the ultimate position of the residual Germany, it is impossible to have a coherent and consistent approach to the German problem. Our problem in Germany today, as I see it, is first of all to restore German economy to such a level that Germany can live as a decent and a useful member of the European comity of nations. That is our very first problem. Secondly, as far as we possibly can, by influence and direction we must so change the German approach to life that we can get a more democratic and a more truly peaceful outlook for the Europe of the future.

In the few remarks I intend to make, I should like to deal first with the instrument with which we are trying to do that—the Control Commission. We are trying to achieve that through a small body of people who were hurriedly put into Germany in 1945, and who have had various vicissitudes since then. We are trying to influence a Germany which is gradually resuming the control of its own activities, and it seems to me a most elementary thing in the conduct of the Control Commission that, as so many absurd functions must presently disappear, and as the numbers of people in the Control Commission run down, when we are no longer directing but only influencing Germany, the quality of those remaining should improve. Therefore, to begin with, we shall be forced back upon certain mechanical means in seeing that we have the proper staff.

First and foremost, we require a careful selection. It was admitted to us in evidence that there had been a very great improvement in the quality of the material during the last year. However, I suggest that there should also be a re-selection board for those whose functions in Germany end, and who are transferred to another section of the Control Commission. Our people in Germany require a reasonable standard of living, a reasonable standard of wages, and a real security in the job they are trying to do. Nobody can expect a person of quality in this country to sacrifice the hopes of the future for, at most, a three years' contract with the Control Commission. No matter how difficult it may be, I believe it is the duty of this House to insist upon an attempt at some form of integration of those working in Germany with the Civil Service at home.

Next, we should give to those people who are our servants in Germany reasonable protection against malicious and untrue attacks. Everywhere we went in Germany we found the greatest indignation at many of the attacks that have been made upon the Control Commission staff and the Armed Forces in Germany. I do not contend for one moment that the Control Commission staff is perfect; far from it. I have no doubt that, in ability and in conduct, they approximate to the ability and conduct of any other body of people. I find they do not resent being criticised; they have nothing but the highest praise to give to the regular journalists who write from Germany about the Germans; but I believe they have a legitimate grievance against the hordes of itinerant scribblers who visit Germany for a weekend, who palpitate through the Northwest zone at I do not know how many miles per gallon, and then come back to this country and, when they have become properly dehydrated, write of the luxury and immorality of the people who have been their hosts and given them every hospitality.

I have a boy in the Armed Forces in Germany, and I resent bitterly the suggestion that British boys and girls, and British men and women, are doing those things in the Control Commission which are alleged against them. It just is not true. These men and women are the servants of this House and this country, and they should get some protection. I believe that half the criticism arises from ignorance in this country of the work these people are doing and the important task they are trying to carry out, and it might be an excellent thing to arrange for regular broadcasts to this country, given by those at the top of the Control Commission, in order to explain their work and their difficulties.

Failure to do that will have three effects upon our staff in Germany. First and foremost, we shall destroy the morale of the people we are asking to carry out distasteful tasks. Secondly, we shall discourage recruiting of the best type of people for the Control Commission. Thirdly, we shall put an undue penalty on the many decent people who have done good work out there, but who will find service in the Control Commission in Germany is a handicap and not a recommendation when applying for a job at home. We must pay particular attention to the quality and conditions of our staff if we are to set Germany on its feet again. It will not be easy; it will be very nearly impossible.

As was said by the hon. Member for Abingdon, the only thought in the mind of the German today is food. It is pitiful and pathetic to find such an obsession with the absolute necessities of life in a civilised community in the twentieth century. There are only two ways in which Germany can get food. One is by an increase in the productivity of Germany itself. Here again, it is no use burking the fact that in the North-West British zone we have an area which is not of high fertility; even if the most intensive cultivation is carried out, and even though we utilise to the full supplies of machinery, manures, seeds and that sort of thing, we can make only a small inroad into the needs of the German population for food. German food, especially for the new Germany, must be purchased by her exports, which brings us immediately to the question of the new level of industry, and the dismantling and demolition of certain factories in Germany.

I contend there is a good deal of nonsense talked about the dismantling. There are a whole lot of people who have been shedding crocodile tears about the tragedy of the dismantling of works in Germany, but who have not a tear to shed over the dismantling of works on the Clyde, in Motherwell, in Jarrow, and in the rest of Britain. We must face up to the position that there is, and has been, a definite war potential in Germany which quite easily could be isolated, and, secondly, a type of industry which has a potential use for war and for peace. There cannot be the slightest objection to the destruction or dismantling of the 500 A1 category plants, which were built for war purposes only, and have never turned out any articles for civilian use. They are an excrescence on the German economy, and there can be no justification for them. Secondly, there are considerable numbers of factories which have a potential for war and for peace, and naturally such of these factories as can be preserved should be preserved, provided they can be immediately used in the German economy. We have heard a good deal in this Debate about the bitter protests coming from Germany in regard to dismantling factories. Did anyone expect they would not protest? They are bound to protest, and the more we show weakness on our side, the more protests there will be. It would be a crime for this House to weaken the hands of the people in Germany, who, once a decision has been made, have to carry it through. It is a very distasteful job, and they do not want criticism in regard to dismantling—

Mr. Stokes (Ipswich)

If we do not agree, are we to keep silent?

Mr. Anderson

I cannot imagine the hon. Member keeping silent, even if he happened to agree. The position we must face is this. A level of industry for Germany has been fixed. I do not know whether or not it is a statistical figure, but I know that it has been fixed on the 1936 level, and the 1936 level of industry in Germany was not a bad one. I know also that when these plants scheduled for demolition or dismantling have been removed, there will still remain a very much larger industrial capacity than the Germans will be able to utilise for the next 10 years. All the evidence we received was to the effect that there was a sufficient surplus capacity, and that Germany's capacity could not be reached for 10 years. I believe that Germany's industry will gain more by concentration than it will lose by the removal of these plants and machines to regions where they can be more rapidly used. The best we can do is to submit that this is the finish of the dismantling programme, and, having taken the decision and published it, stick to it and strengthen the hands of our people who have to carry the programme into effect.

I wish now to say a few words on something affecting our long-term policy, namely, education, if such a thing can be done by the people of this country. I believe that in the re-education of German youth we have an opportunity to turn the country from war to peace. It will be a long-term job, and it will require patience and devotion. I agree that we have an idealist to try to carry out the work, and he will need the utmost assistance that can be given him by the Press and the people of this country. We require more than interchanges. It should be made possible for specialists in education to do a tour of duty in Germany to help in reorganising German education.

In this connection, I would mention that there is a desperate shortage of books in Germany. We are suffering from a shortage here, but the whole of German education is being frustrated by the lack of textbooks and exercise books. I assure the House that more paper is being used here by football pools than is used by the whole of Germany. Surely, it should be possible for every child in a British school to send an exercise book to Germany. The books could be collected and transported to Germany, and such a scheme would be a gesture as well as a real contribution towards German education.

In conclusion, I would say that while we have not had complete success in Germany, we have at least done a good job within the limits prescribed to us. I believe that future historians will pay tribute to what has been done by this country, in the midst of her own needs, to help the defeated enemy.

5.17 p.m.

Mr. Nigel Birch (Flint)

The hon. Member for Attercliffe (Mr. J. Hynd) made the most devastating attack I have ever heard on the policy for which he himself was responsible for two years. Unfortunately, the scales have fallen from his eyes not before but after leaving Damascus. In those dreadful words of his, we are two years too late. I should like to speak in terms of my proposed Amendment to the Address which appears on the Order Paper, namely: that Your Majesty's Government are pursuing a policy in Germany which is morally wrong and disastrous in practice. The Select Committee in their Report state at the beginning of their conclusions: The burden of supporting Germany in peace is proving as irksome as the burden of defeating her in war. "Irksome" is not, I think, a very happy word. Those who have lost relatives, friends and comrades-in-arms find it rather more than irksome. I am bound to say that now, while in peace we are doing things in Germany which are morally wrong and things which are politically dangerous, and while we are spending £180 million to permit these crimes and follies, I find the situation something worse than irksome.

I will speak first about de-Nazification, arrestable categories and so-called militarists. It seems to me that we are proceeding in Germany on the principle that two wrongs make a right, and that we are copying some of the more disgusting things done by Nazis and Communists. I do not believe that people in this country really know what is going on. The Foreign Secretary, when speaking on Germany in this House on 4th August, in the course of some not very well-knit remarks, said this about de-Nazification: I am now told that it is wrong to de-Nazify. According to the right hon. Gentleman the Member for South Kensington (Mr. Law), I should not put these people out of office. I should allow them to go on. But they were under the Nazis. They had the very highest offices in the State."—[OFFICIAL REPORT, 4th August, 1947; Vol. 441, c. 1094.] We all agree that Nazis who had the very highest offices in the State had to go. I am sure that the right hon. Gentleman did not wish to mislead the House but could he really have known what the figures were? By 1st August this year, 1,949,000 people had been examined and 334,000 had been dismissed from office; 23,000 were in concentration camps awaiting trial, a great majority of whom had been in concentration camps since the end of the war. Only 148 of these have been charged with actual crimes, 490 have been permanently interned as dangerous to the occupation, while, for good measure, the Roy Scouts have been banned. The population of this country is almost exactly double that of the British zone. What we have done there is equivalent to putting 700,000 people out of office here. Surely, there cannot be 700,000 people in the very highest offices here. Let me give an example of what it means. In Hamburg, one-third of the teachers have been sacked, and as a result of that 85 per cent. of those now teaching are over 40. Hitler carried out no purge of teachers whatever, and I cannot think that one-third of the teachers there held the very highest offices. It does not make sense. If we were to carry out this colossal purge, surely it was vital to see that the rule of law was maintained and that impartial justice was observed.

I would like to draw the very earnest attention of the House to this: Zonal Executive Instruction No. 3, which was issued in March this year, lays down the following provisions as to how the panels which do the de-Nazifying are to be selected, that is, the people who judge whether a man should lose his job and his money, and be turned out of his home. This is what it said: The first criterion for all members of the de-Nazification panel is that they should be confirmed anti-Nazis; that is to say, they must have in the past given evidence of their positive antipathy to the Nazi regime. Only if it proves impossible to find confirmed anti-Nazis should non-Nazis be allowed on the panel. To a considerable extent a man's poltical views will indicate the strength of his opposition to Nazi principles. In industrial regions German panels and committees must be predominantly, but not exclusively, composed of trade unionists and representatives of the workers' interests; in other regions representation of trade unions must also be provided where possible. It must not be forgotten that the Nazis and many of their sympathisers had as their first object the destruction of working-class organisations, and it is particularly desirable that these organisations should be given a chance to name their oppressors. It is perfectly right that people should be given the chance of naming their oppressors, but it is not right that somebody who is complaining should also be the judge. Yet that is what is happening. What we are doing is what has happened in people's courts in National Socialist and Communist countries, against which all Governments of this country have most bitterly protested. It is well known that the operation of these panels is grossly corrupt. In Münster, the other day, 39 members of the de-Nazification authority were charged with corruption. It is fairly well known that there is a black market in testimonials from Jews, saying that they have been oppressed, which can be bought for 500 or 600 marks. That is what is going on in Germany. So much for de-Nazification. Now for arrestable categories. As I say, there are 23,000 people in concentration camps, most of whom have been in those camps since the end of the war.

Mr. Cecil Poole (Lichfield)

Before the hon. Gentleman leaves the question of de-Nazification, will he tell the House how he would compose these panels? He will appreciate that they must be composed either of Nazis or non-Nazis, and he does not seem to like the non-Nazis.

Mr. Birch

What is wrong is that somebody who has been in a concentration camp should be put on one of these panels. That is what has been happening. That is what the Zonal Executive Instruction encourages. Now, with regard to arrestable categories. The worst case is that of the Waffen S.S. That was an ordinary fighting formation, and many of its members were nine years old when Hitler came to power. They joined up in the war at 17, and fought all through it. They have been in gaol ever since. Everybody in that formation above the rank of sergeant has been so treated. They are now to be tried for belonging to an organisation adjudged criminal at Nuremberg. The trial turns on the question: Did they know the organisation was criminal? The first question they are asked is: Did you know that the Jews were persecuted? They say, "Yes," and they probably get a small fine or a period of imprisonment. They are sent out either with a permanent criminal record, or as category III men, which means that they cannot vote, their property is taken away, they have to report their movements to the police, and they cannot get any job except breaking stones. It does not make sense to treat like that men who can have had no responsibility whatever for the rise of the Nazis.

A word or two about militarists, and in answer to the hon. Member for Rugby (Mr. W. J. Brown), who seems to want to know what they are, I will explain. The so-called militarists can be dealt with by the Special Branch of Public Safety, in the same way as the Nazis are dealt with. Their money and jobs can be taken away, and they can be immured perpetually without trial. It is laid down in Zonal Instruction No. 54 that a militarist is: Any former regular officer of the German Navy, Army or Air Force, or any other officer, N.C.O. or man of the German forces, who, by reason of his disposition, past activities, and professional military knowledge, is considered by the military governor as likely to foster or resuscitate the military ambitions of the German nation.

Mr. W. J. Brown (Rugby)

That sounds like a Communist definition of a class enemy.

Mr. Birch

The hon. Member is quite right. It means that anybody can be shut up permanently without trial if the military government does not happen to take a fancy to him. At the concentration camp at Adelheide there are many people shut up for this reason who have no chance whatever of getting out. As a final touch of meanness, all war pensions, even for the old imperial German Army, have been stopped. There are old generals and sergeant-majors over 80 years of age, with their wives, who have no income whatever because their pensions have been stopped. It seems to me that this is 18B with a vengeance. It is the use of the lettre de cachet. Some Members justify this, as the hon. Member for Lichfield (Mr. C. Poole) did, on the grounds that the Nazis are really the gentry. That is untrue. It is damnable to take that line. The Nazis were a cross-section of the people—

Mr. C. Poole

I said nothing that bore the slightest resemblance to that.

Mr. Birch

If I misinterpreted the hon. Gentleman, I apologise. I think the real opposition put up to the Nazis was that put up by the poor old Conservatives. [Laughter.] Yes, that is true. The Nazis were a Socialist party, pursuing the same ecomonic policy, down to the last detail, which is being pursued here. That is absolutely true. If one wants to see what a common man looks like, one has only to look at Hitler. It is impossible to think of any policy more precisely designed to defeat the ends which we have in view than the policy of de-Nazification.

This has a great effect on the German economy. It is doubtful whether there are 350,000 men of any ability in the whole zone. We are left with the inefficient. It seems to me that the hon. Member for Attercliffe now seems to realise, after two-and-a-half years, that by far the most important thing, after all the devastation caused by the war, was to get German industry going again. We on this side, have always said that that was essential. But we are doing more to destroy than we are to build. It is true, as the hon. Member for Attercliffe said just now, that food is not everything. Food can be had for goods or hard currency. I would like the Government to tell us how many tons of Dutch vegetables rotted this summer because the Germans had not the goods to send for them. Food can be had all right if one has the goods.

The reason why there are no goods is because of the paralysis of the whole economy. The main reason is that we have been waiting all the time for an agreement with Russia, which we must very well have known would never come. There have been far too many marks about and we have tried to meet the resulting inflation by high taxation and insane price-fixing. Coal costing 30 marks per ton is sold for 15 marks; milk costing 25 pfennigs a litre to produce is sold for 15 pfennigs. The fixed price of fertilisers is 50 per cent. of the cost price and one-seventeenth of the price in the black market. What happens when we do that? What happens is inefficiency and corruption. The whole machinery is corrupt in Germany, including practically every single civil servant. No business man has any incentive to produce; the workman has nothing to go for and, therefore, he barters and goes out foraging in the countryside. The whole civil service becomes rotten. I say to hon. Gentlemen opposite that this is full of lessons for us here.

I want to say a word about factory removal. I hope that anyone who speaks against the removal of factories will not be accused of stabbing the Foreign Secretary in the back—a form of attack to which he is a martyr. I would point out that in the last Debate my right hon. Friend the Member for Bromley (Mr. H. Macmillan) made a clear declaration on this point, to which I wholeheartedly subscribe. He said that we must accept that Western Germany requires more industrialisation and not less. Therefore, factory removals and reparations must stop at once. I wholly agree. The Prime Minister, in his letter to the right hon. and learned Member for Montgomery (Mr. C. Davics), said something rather misleading. He said that there was no question of beginning to dismantle; it had been proceeding continuously for a long time, and he saw no reason for stopping it at the moment when we were proposing to issue a list of available plant. That is misleading. Up to the middle of May, only seven plants had been removed and only 28 were in the course of removal, while now we are proposing to remove 682. The scale of the whole thing is immensely accelerated.

This operation has been defended on two grounds. The first is that the Germans cannot use the factories any way, and they will only rust. That is not true. A great many of the factories which are to be removed are now being used. There is the classic case of the Holmag firm which was encouraged to exhibit at Hanover Fair, took large orders, and is now to be removed. One cannot shift people around in Germany. There is nowhere to put them. When you close down a factory, you close down production.

The second line of argument is that the factories could be used elsewhere. I believe that to be complete nonsense. How are they to be transported? One of the paragraphs on coal in the Select Committee's Report points out that if coal production reaches 260,000 tons a day—which is 40,000 tons under the target—there will not be enough wagons to shift it away from the pitheads. If that is so, and if all the wagons are to be used for shifting rusty factories to Russia and not for moving the coal, how are we ever going to get economy going at all? I am not surprised that Lord Pakenham was laughed at, at Dusseldorf on Monday, when he was talking on those lines.

The Committee on Estimates did not mention the most important reason of the lot against it—the devastating political effect. If we want to make Western Germany a part of the Western family of nations, we must pay some attention to what the Germans feel. The trouble is we have stuck to the carcase of a dead policy. The assumption made in 1944 and 1943 was that Germany was the only menace to peace. Does anyone think that Germany is the only menace to peace now? The assumption was also made that there would be continuing agreement among the Great Powers. Does anyone think that there is continuing agreement among the Great Powers? The Foreign Secretary not only staked his reputation on solving the Palestine problem, but also on getting agreement on Germany, and he is going to lose both bets. He will do that at terrible cost to this country and terrible cost to the people of Germany, and terrible cost to Western civilisation. We are weakening all the time. He will never get an agreement with Russia while we are weak. The only agreement which the Russians ever loyally observed was their agreement with Germany in 1939, and they did so because Germany was strong. Now that we are weak, the more we truckle to them the more virulent is their abuse of us.

I regret that the opportunity of the Marshall Plan has not been taken to say that Germany will be helped to live, and that we will bring to an end all the follies which we have carried on over the last two years under the direction of the hon. Member for Attercliffe. I agree wholeheartedly with every point put forward last August by my right hon. Friend the Member for Bromley and I stick to it. But we have to recognise that we are two and a half years too late. We have weakened in this country mainly because we have had a poltroon as Chancellor of the Exchequer, but also because of the devastating policy we have pursued in Palestine and Germany. I hope that even at the twelfth hour we may repent. If we do not, the verdict of history will be:

Quos Deus uvlt perdere dementat prius.

5.40 p.m.

Mr. Bowles (Nuneaton)

The Debate so far has concentrated upon Germany and upon two approaches to it. The one is the moral approach and the second approach that of the British Government. I am going to approach Germany for a few minutes from rather a different direction. I have been in Germany. I spent some weeks there in the early part of this year, and I took some time during the recent Recess to go to Poland. It might be of interest to the House—and I am glad the Foreign Secretary is in his place—if I conveyed to the House and to him in particular some of the feelings of that people numbering some 24 million. That was the only country which really had been physically moved under the Potsdam Agreement. The House will remember that the Russians took a good deal of Eastern Poland and under that agreement Poland recovered Lower Silesia, referred to in Poland today as the "recovered territories." They are much more industralised than the territories which she lost in the East.

The House will remember that on 1st September, 1939, Hitler started the war by an unannounced bombardment of Warsaw. The fight for the capture of Warsaw and Poland lasted 29 days and then Poland gave in. Then in 1944, there was a terrible uprising which lasted some 63 days, in which a great deal more damage was done to Warsaw in particular. In 1945, Hitler knew he could no longer remain in Warsaw and he instructed his troops—75,000 that were left—to raze that city to the ground street by street. The older buildings they incinerated by ordinary fire, and they blew up those more strongly built. It might be important for the House to recollect that the Polish people lost six million of their population during those six years of war. These things might be borne in mind when we speak about the Germans, and about the state of Europe as we view it this distance away. Although we have had friends and relatives lost and cities bombarded, when we remember that Warsaw was 85 per cent. destroyed and all its bridges blown, we can understand something of the feelings which exist there.

It has also to be borne in mind that there was not a Poland in 1913. It was then in occupation by Germany, Austria and Russia, and had been for 150 years. Poland, more or less as it is now, has been fought over by the Russians and Germans for 1,000 years, and how the Poles have suffered it is impossible to understand. They have a very great hatred for the Russians because they remember how the Russians treated them only in the early years of the war, but they have a worse feeling for the Germans because in the Auschwitz concentration camp, which I visited, some 3 million to 4 million Poles, mostly Jews, were done to death in circumstances which are quite impossible to describe, though I will try.

I have been there and it is a concentration camp stretching in all directions. One particular part I visited was where the extermination took place in rather a slow manner. The people were herded into a series of bunks about six feet by six feet, and eight to ten people slept there each night. When it was cold weather there was one brazier with one pail of coal to keep the place warm, The sheds were about the length of this Chamber and when the winter was on, they opened the windows in order to make them quite cold. When the summer and the hot weather came, they kept the windows on the top of the shed shut in order to make it more horrible. In the male urinals there was no water, which added to the unpleasant smell, and in a shed about as long as a cricket pitch where the water was running 10,000 people had to wash in an hour. This will give the House some idea of the impossible task set to the people who were living in this camp and none of them, of course, survived more than three months. This is something relevant to the question of how Germany is regarded in other parts of Europe outside this country and that is why I mention these facts.

The next part was the gas chamber. I saw the place where the trains came in. If a German officer were killed in Warsaw 200 people, including children, were picked up and taken to Auschwitz concentration camp. There was there a large ferro-concrete building and the people were herded into it. They were offered a towel and a piece of soap. They thought they were going to have a bath with the result that they took off their clothes, but they found they were not to have a bath. Instead, they were shoved into the gas chamber and in ten minutes they were dead. They were taken out of the gas chamber and examined by dental surgeons, who extracted any gold in their teeth to build up Hitler's gold reserve. If any hon. Member has been to Hamburg he will have seen hundreds and thousands of rings in that city, the owners of which cannot be traced.

These bodies were burned in the furnaces and this was going on at the rate of 15,000 to 35,000 a day. There is no question about this as we have had evidence given by General Hesse—not the man who came over here—and he admitted that he gave orders and knew that 3 million people were done to death in that camp. Since then more records have come to light and the figure is nearer 3½ to 4 million, as I have said. Apart from that, those bodies which could not be burned in the furnaces were burned on large piles which were set alight with oil and petrol. I understand it could be smelt many miles away. I saw human bones, about the size of the nail on one's finger, on the floor of the building where people had been burned to death. Then to my horror—and I think the House will agree with me—I saw one or two charabancs coming into the camp with girls between 13 and 18 years of age who were sight-seeing. When I went back to Warsaw I protested to Ministers—whose names the House will forgive me for not mentioning—and I told them that this would be intolerable in England. One Minister said, "You must understand that we cannot let our people forget." I said, "You are a Communist," and he said, "Yes, we are Communists but we can't forgive the Germans about this." I said, "If Germany becomes Communist would you feel the same?" and he answered, "If it were a Communist Germany perhaps we would have a little more kindness." The real answer is that the Poles are Poles first and Communists and Socialists next, but they are Poles, and, remembering their history, the House would do well to make some allowance for the. point of view of these people.

The Minister then asked, "What do the people of England think of Poland?" I answered that I did not know. I certainly did not know very much about Poland myself. I said, "I think they regarded Poland before the war as the cesspool of Europe and a Ghetto for the Jews. I think they now regard you as a puppet State of the Soviet Government." He said, "Why do they think that?" I said "I suppose it's because you always seem to vote the same way and to abstain at the same time as M. Vyshinsky." He said, "And you always seem to vote the same way as the United States." I asked him," Why do you not, for instance, take part in the Marshall Plan? "That is the position. I am glad that the Foreign Secretary is here. I will try, in one long, political sentence, to sum up what I believe the viewpoint of the Poles is. They have a more balanced territory. They want peace primarily. They want their Western frontiers maintained. They are very concerned about the position of their Western frontiers. This is where Russia, alone of the three signatories to the Potsdam Agreement, has said, "We' will support you in your Western frontiers." Mr. Marshall has said that Germany may have to have some back. The Foreign Secretary has said that this is a matter to be settled at the November Conference of Foreign Ministers. However much we dislike this Agreement, the Western frontiers are now a fait accompli. I said that the British Government, and other Western Governments would not seek to change those frontiers by force. I said that I believed that was the opinion which would be current in this country.

I want the House therefore to realise what the position is. The Poles have taken over the mines, and the iron and steel works in Lower Silesia from the Germans. They are running them, but whether efficiently or not I cannot not tell, because I am not a mining engineer or a steel worker. The Poles are proud of their efforts and they do not want to be disturbed again. They are frightened that under the Marshall Plan—this is a point I want the House and the Foreign Secretary particularly to understand—they may suffer. I will tell the House why the Poles have not come into that plan. I do not think they are dictated to by Russia. That may seem a strange thing to say, but I believe it to be true. They are trying to do in Poland what we are trying to do in this country, stand on their own feet and not be dependent upon American capitalism. They are frightened of the Marshall Plan, which is presumably designed to set all European economy upon its feet again, and German economy in particular because it is the centre of European economy. They visualise American capitalism using a rearmed, revived and rehabilitated Germany for an attack against the Soviet Union, in the course of which attack Poland would, naturally, be overrun again.

That is a view which anybody who has been there recently will agree is the correct one. I did not go there with the hon. Member for Gateshead (Mr. Zilliacus) or anybody else. I went by myself, and I went exactly where I intended to go. I was told by a Polish Minister, two days after I arrived, "Go exactly where you like. I don't want you to go back to England and say you only went where you were permitted to go." I went down a coal mine. I stayed with the coal miners in one of their holiday camps at a place called Landek, which is five miles from the Czechoslovakia frontier. These camps are not just ordinary camps. They are the old, country summer resorts of the German capitalists and barons now taken over by the Polish Government, for which they paid no compensation, naturally. They did it when the territory was seized under the Agreement. I saw an example of the kind of culture which is going on. If we were to take some of our bigger mansions which various earls and dukes find they cannot sell at a reasonable price and use them, as Himley Hall may be used, for holiday places for the miners of this country—[Interruption]. I certainly think that place might be used.

The Poles are a proud people. However many times they may have been conquered they have never ceased to speak Polish, even though it was verboten to do so for 150 years under the German occupation. I had no preconceived ideas in going to Poland, and I am speaking to the House in a completely objective way. I beg the Foreign Secretary to realise that there are 24 million people in that country, which is the only one in Europe that is exporting coal. I believe that this year the Poles are exporting eggs to us. Russia is helping Poland by paying half the cost of rebuilding Warsaw and by giving them a bridge across the Vistula. Poland may be able to contribute a great deal, not only to the feeding of Europe but to some extent in other directions as well. I believe there is a trade agreement with Germany at the present time.

I realise that the Foreign Secretary has a tremendous job. He has to meet the other Foreign Ministers next month. He has obviously not had an opportunity of staying a fortnight or more as I did in Poland. He has not had time to stay there more than a day on his way elsewhere. With a longer stay one can get some better idea of the situation. I am not criticising my right hon. Friend at all in saying this. The Poles are worried. They feel that my right hon. Friend should come down on the side of the Soviet Union and support those Western frontiers, and that Mr. Marshall might do so also. That would give satisfaction to that country, which is making a brave effort to rebuild itself.

I remember one afternoon seeing a crowd of people being handed picks, axes and shovels. I asked, "What is this?" The reply was, "Rebuilding Warsaw." I said, "These people look like professors, school-teachers and artists." That is what they were. The President, the Prime Minister and the Chief of the General Staff all take their turn in rebuilding Warsaw. We might not agree with some of the ways in which they are doing it, because we do not understand those people very well. They give some preference, not to the building of workingclass houses in all that desolation, but to the rebuilding of places like churches. Hitler said, "The Poles have no culture, and we will first of all start on their professional, and educational centres, their monuments, souvenirs and churches." We can therefore understand why the Poles want everybody to realise that they are a cultured nation. That is why they are giving a higher priority to the rebuilding of churches, museums, monuments, palaces of kings, etc., than we would. I think that is ridiculous in a Socialist society, but after a short time you begin to understand.

The Poles are terrified of German rearmament and revival. I daresay they will be watching this Debate. They may not be able to understand why there is so much sympathy—rational sympathy—exhibited by hon. Members on all sides of the House with the Germans. They have been hit worse than this country. I thank the House for listening to what some hon. Members may think to be slightly irrelevant matter. I doubt whether it is irrelevant and I ask the House to say that it is not. It is a contribution from another point of view to the Debate. I hope that the Foreign Secretary, whom I am delighted to see in his place, will bear in mind some of the things which I have said.

5.59 p.m.

Sir Peter Macdonald (Isle of Wight)

I was very glad to hear the speech by the hon. Member for Nuneaton (Mr. Bowles), after his return from his travels in Europe, and to hear that he has enjoyed himself. I wonder whether, during his stay in Poland, when he seems to have met leading Polish politicians, he met Mr. Mikolajczyk, or whether he has any information about that gentleman's whereabouts.

Mr. Bowles

I will endeavour to explain. I did not see Mr. Mikolajczyk. I was down in the Southern territory until Monday. I came back on Wednesday. I was asked by a Cabinet Minister of the present Government whether I had seen him, and I said that I had not. I realise that it was a pity that I had not done so, for it would have made my tour a little more impartial, but I am perfectly certain that I could have done so. All the stories in the Press about what is happening to him must be creating suspicion against the Polish Government.

Sir P. Macdonald

I will not pursue this any further. I just wanted information. There seems to be very serious doubt as to the safety or the whereabouts of that very great Polish politician, for whom we in this country should have and do have a very high regard. I will return now to the subject of this Debate, Germany, and the various questions that have arisen out of the Report of the Select Committee of which I had the honour of being a member. I was very interested to hear the speech of the hon. Member for Attercliffe (Mr. J. Hynd), who was at one time respoftsible for the affairs of Germany in this House. The views which he expressed today have little resemblance to those which he expressed from the Front Bench when he was responsible for German affairs.

One point has been raised to which I must refer, and that is the question of the level of industry and the policy with regard to the dismantling of factories—that has been dealt with by various people—and the question whether or not it is morally right. I maintain that it is morally right, and I therefore join issue with the hon. Member for Flint (Mr. Birch). I did not meet a German when I was there who disagreed with that, though they did disagree on its political expediency at the present time. I agree that, after two and a half years, to get out a list of the factories to be dismantled, at a time when we have partly handed over responsibility for government to the German people, when we have handed over the police to the German people, at the beginning of what promises to be another very severe winter, and at a time when the Germans do not know whether they will be able to maintain their low food supplies, is the stupidest thing we could do from a political point of view. On the other hand, not for one moment will I allow charges to be made, as there have been in various newspapers and in this House, against the Control Commission for the responsibility of this policy. The Control Commission are carrying out the policy of Potsdam and Yalta.

Mr. Stokes

And Quebec.

Sir P. Macdonald

Quebec, too. At any rate, it was a three-Power policy. It is agreed on all hands today that that policy is completely obsolete. We all know why. One party, Russia, has completely disavowed it. Russia has taken the line she generally does when she occupies a country. She annexes the country. That is what has happened with Germany. Russia has no intention, and has had no intention for a very long time, of carrying out the policy of Yalta or Potsdam, and, what is more, she had done and is doing everything possible to prevent the setting up of a Western German Government. The sooner that is recognised the better.

The Foreign Secretary is in a very difficult position, but he can have no illusions about Russia's intentions in Germany today. Mr. Marshall has no illusions and our French friends have no illusions. It is just as well that the Foreign Secretary should recognise the fact and get on with the job of creating some form of central government for Western Germany. Otherwise the present chaotic conditions, which everybody abhors, will be bound to go on indefinitely. The responsibility for the policy of dismantling factories which is now being carried out should be placed where it belongs, on the shoulders of the Foreign Secretary and not on the Control Commission who are carrying out his policy. I am convinced that most of the people we met in the Control Commission are quite conscientiously carrying out this policy. They are very conscientious people. They are carrying out this policy which they dislike and which many of them, if not all, think is from a political point of view wrong.

I, therefore, hope that the Foreign Secretary will realise that a decision must be made now, and it must be a decision not only by this Government but also by the American Government as to what policy shall be pursued in future. There are all sorts of rumours, and there are many voices in America on this subject. Two hundred American Senators and Congressmen visited Europe this year. Most of them went to Germany. Many of them are publicly expressing their disapproval of the policy, and I have no doubt that when they go home, they will prevail on their Government to disregard this policy of dismantling factories, and we shall be left carrying the baby. If the policy breaks down, as it may easily do, our prestige will suffer.

I hope that a decision will be made now by the Foreign Secretary, backed up by Mr. Marshall, whether to go on with the policy, to postpone it or to withdraw it altogether. That decision should be made now and it should be realised that it is a united policy. Whatever policy is decided upon, this House should support it. From the moral point of view there is no doubt whatsoever that Germany should pay reparations. No German I met denied that. After all, it is not our policy. It is an Allied policy. The Commission that went round selecting the plant for dismantling had representatives from all our Allies, some of whom identified and claimed plant that was stolen from their countries during the German occupation. They felt they had a moral claim to such plant. If we now throw over that policy after it has been decided upon and revised, they will rightly consider that they are being let down by us, because most of this plant is in our zone.

Mr. Stokes

Would the hon. Member tell the House how many plants have been allocated?

Sir P. Macdonald

I am told they have all been.

Mr. Stokes

No. A very small minority.

Sir P. Macdonald

I know that some have been allocated. I was interested to see in the Prorogation Speech the statement: My Ministers have persisted in their efforts to establish true democracy in Germany … and have encouraged a gradual transfer of powers to the German people. I want to know how far that is true. I admit that we have encouraged free elections in Germany. We have encouraged elections for a candidate instead of a list, as in totalitarian countries, and in that sense we have tried to see that there were democratic elections. We have encouraged the setting up of Landa Governments and Kreis governments, and in that respect we have tried to establish democracy. We have also handed to these people services such as the police force and the administration of justice, but how far are justice and law being observed today in Germany? It is a fact, which we were given in evidence, that over 80 per cent. of industry in Germany today is carried on in the black market. Why is that? We were also told that it is recognised by everybody in Germany that most of the industry is being carried on in the black market, that this breach of the law is recognised and supported in most cases by the police themselves.

That is a serious state of affairs and why does it exist? Obviously because the economic laws of Germany have not been given proper consideration. What is happening? In most cases we have handed over industries to the German people, but to what extent have we handed over control of these industries? Mostly we have handed them over in theory but not in practice, and if you consult any German engaged in industry today, he will say that he is controlled and frustrated at every turn and is completely unable to get his industries started. That is largely due to the policy of this Government. In this large establishment of the Control Commission there is one department called the Governmental Sub-Commission which has been set up by this Government for the purpose of instructing the new Germany in the new democracy, and it has from the outset tried to socialise German industry.

Mr. Skeffington-Lodge (Bedford)

Quite right too.

Sir P. Macdonald

Well, they have not been very successful, and that is why today there are all these controls and the frustration that goes with the nationalisation of industry, which we have in this country. That is why industry has been driven into the black market in Germany as it is here.

Mr. Stokes

Oh, no.

Sir P. Macdonald

My advice to the Foreign Secretary is to bring these bright boys home. That Department of the Control Commission is composed of young men from universities and elsewhere, none of whom have any experience of industry at all, who are trying to teach the Germans democracy and how to run their own industries. The Germans one meets say that they are sick to death of these people, because all they do is to attach a bureaucracy to them which strangles their industry and prevents them from getting on their feet and off our backs. I urge the Foreign Secretary to consider that matter seriously, because it has been the cause of a great deal of the delay and frustration in getting German industry going and also because we are asking America to take over 85 per cent. of our own cost of occupation in addition to her own, and she will not tolerate that ideology attached to any schemes of German rehabilitation.

Mr. Stokes

Did not the hon. Member come across anybody during his visit who could have told him that even the Americans are now convinced that a real condition of the resuscitation of industry in the Ruhr, admitted by Germans of all classes, is the public ownership and control of German heavy industry.

Sir P. Macdonald

We went to the Ruhr and we tried to get the facts of that situation. We were told that the miners and the trade unions were convinced that the policy of nationalisation and public ownership was the policy they wanted and we tried to get at the facts. We were not at all convinced that that was the policy they wanted. For instance, we interviewed leaders of the trade union movement and we expected that the first thing they would tell us would be that what they wanted was the nationalisation of industry. Not at all. As' the hon. Member for Abingdon (Sir R. Glyn) said in his speech, when we asked them what problem they had to put before us, they said, "We have the great problem of food and we want to be allowed to work an extra day a week. We already work six days a week for eight hours a day, and we want to be allowed to work on Sunday in order to produce coal which we can barter for potatoes." There was not a word about nationalisation, and I do not think that is what is uppermost in their minds.

Mr. Skeffington-Lodge

Is the hon. Member aware that the political parties which are allowed to function in the British zone of Germany are unanimously in favour of the nationalisation of industry of the Ruhr? What has he to say to that?

Sir P. Macdonald

I did not see any unanimity about it.

Mr. Skeffington-Lodge

The hon. Member may not have seen it, but it is a fact.

Sir P. Macdonald

But I know that people engaged in industry are not unanimous about it.

Mr. Skeffington-Lodge

The workers are.

Sir P. Macdonald

And they will tell you that the system we have tried to pin upon them of nationalisation has led to frustration. Many of them will also tell you that they were better off under Nazism than they are today, because then they had a certain amount of freedom. Although they were told what to do, they were free to run their own industries. They are not today.

Another question which has been raised today is that of the agrarian policy, the breaking up of German estates. Although I agree that it amounts to a very small percentage of the total agricultural areas of Germany, the fact remains that any change in agrarian policy at present is bound to lead to dislocation of agriculture and may dislocate food production. That was in the mind of the officer responsible for food and agriculture when we saw him. Later we were told that the ordinance had only just been published and that considerable time was allowed for carrying it out. I have not seen the ordinance, but I think that any policy which may possibly dislocate food production- at present should be put in cold storage for at least five years and then reviewed. Otherwise, Germany will not produce even the amount of food she is producing today.

I am quite satisfied that the Control Commission are doing a very good job under very difficult circumstances, but they certainly are in need of a policy. They have been working for the last two years under the greatest difficulty because there has been no policy from a high level. It is essential that the Foreign Secretary and Mr. Marshall should decide as soon as possible—no doubt they will have to wait until the November Conference—and should get French agreement as far as possible to a bi-zonal or tri-zonal policy which should be put into practice without delay, in order that the economy of Germany can be put on its feet.

6.21 p.m.

Mr. Corlett (York)

I wish to confine myself to one aspect of our policy in Germany, that is the question of re-educating Germany. There are some who believe that is an impossible thing to do, and I must admit that I have been sceptical but I believe it is a policy which we have to try. The hon. Member for Abingdon (Sir R. Glyn) paid a very well deserved compliment to Mr. Birley and I wholeheartedly endorse it. When I opposed Mr. Birley's appointment, in a typically British way he discussed the question with me and asked me to go over to Germany and investigate things for myself; which I did. I came to the conclusion that we cannot expect to be successful if we leave this matter of re-educating Germany entirely to the Educational Department. They cannot do it by themselves but must have assistance from the other Departments.

We set them an impossible task if we allow other Departments of administration to do anything in Germany which nullifies the work of the Educational Department. It may be of course that the question of dismantling industry will have a very serious effect on our attempt to re-educate Germany. I do not know whether it will or not, but I do know that military tattoos are not the things likely to help Mr. Birley or his Department in re-educating Germany. It should be definitely laid down that the question of re-educating Germany must be the concern of all Departments concerned with the administration of Germany. We cannot leave it to the good will of individuals, but we must be quite certain that everyone plays his part if we are to be successful. It is indeed a very difficult task to re-educate a country, but it is an even more difficult task to do it in an occupied country because there must be conflict repeatedly. The task is made more difficult still since Ordinance 57 was accepted. I do not wish to discuss the merits of Ordinance 57. That is settled, but we must be absolutely clear in our minds that it has made the task of our Department of Education in Germany infinitely harder.

We have now handed the whole question over to the Germans themselves. Before that, the Department selected those Germans who were to do the work, and naturally they selected the people they thought best fitted to carry out the policy. They could also decide what policy the German officials should carry out and could supervise it and make absolutely certain that it was carried out. Now they can do none of these things. They cannot select officials, decide the policy or supervise the policy. All they can do is to advise and suggest, but the Germans can please themselves entirely whether they accept any of that advice or those suggestions. That will make the task of our officers on the ground very difficult. Some of them have a very large area to cover, all kinds of institutions to visit, administrative officers, heads of departments and the staffs of different schools to see.

We are asking them to do a completely impossible task in the circumstances. I tried to do it myself and I know how hopeless it is. They may be able to see administrative officials or the heads of the schools, but it is completely impossible for them to get to the individual classrooms where the individual teacher is in contact with the individual child, and it is there that the question of the future of Germany is largely going to be settled. There are not enough of these officials to do the jobs, yet with our limited resources I cannot see how we can afford to have more. They ought to be trebled, though I cannot see how we could possibly do that. What we can do is to give them sympathy and encouragement, and wish them Godspeed, but we must not expect results.

At the headquarters, whether in Berlin, Dusseldorf, Hamburg or Kiel, it is a matter of quality, and there we must make absolutely certain that those appointed to headquarters staffs are people with good academic qualifications, wide experience and a real desire to get on with the job. People lacking in educational qualifications should only be appointed in exceptional circumstances. I have had to make some criticisms of certain appointments elsewhere. I feel that in those posts we must have people with the qualifications to speak to the German experts on equal terms, for their job is to discuss problems with German officials who know what they desire in the educational world. I do not see how any of our officers can discuss with high German officials educational problems, unless they really know their subject. Perhaps the German attaches too much attention to the expert whom he sometimes venerates almost as a god, but he will not take much notice of a person who does not really know what he is discussing, though he will gladly listen to the expert. In the main, I am satisfied that on headquarters staffs we have the right type of officer. I spent many hours discussing with these officers what they are doing, I felt satisfied that we have in the main people who are enthusiastic and experienced and competent in their jobs.

I am, however, worried about other matters. I am not too certain that we have any real educational policy in Germany. We use the word "re-education," but what does it mean? By itself it is meaningless, or has too much meaning. All the Allies are re-educating Germany—I sometimes wonder what kind of Germany is going to appear at the end of it when all four Allies have had their way in re-educating Germany in their own way? I do not know what policy any of them have, but I am satisfied that, whether we agree with the Russians or not, they have a policy; it may be a dangerous policy, but they know what they are aiming at in their zone. They are not vaguely talking about re-education. They know what is their aim and policy, and that everybody in their service will carry out their policy.

I am not at all satisfied that we have ever seriously thought what our policy should be, or that we have decided who should be responsible for the policy. What we are doing is simply following in the usual British way, any sort of policy that may come along. Like Topsy, our policy has "just grow'd." That is understandable, and I do not think that anyone is to blame. When we went to Germany we set up an educational branch but gave it no power; it was a branch of another branch, it had no direct approach to the head of the zone, and it had no power to determine policy. It could only make suggestions to another branch as to what our policy should be, and it could never be sure that what it wanted was really pressed. We remedied that later by appointing Mr. Birley, who has direct approach and can see that his policy is carried out. But at the moment we seem to be trying to cover the whole educational front, and the result is that we are really not getting far in any direction. We are trying to cover the whole field—universities, secondary schools, vocational schools, elementary schools and youth clubs—with totally inadequate staff, and the net result is, inevitably, somewhat disappointing.

That is a dangerous situation, but there is another more dangerous one, one on which I am sure we may have a great division of opinion here. I sense a feeling amongst some of our people that the re-education of Germany will come by our concentrating mainly on the intelligentsia, the 10 per cent. of the German people in the universities and the secondary schools. This I regard as a completely fatal point of view. Were we very happy about the German university outlook to Europe or its own people? Did the people in the German universities ever give the German people a real lead towards sanity? Did they ever come out of their ivory towers and play their part in developing the Germans on tolerant lines—making them good Europeans? Very rarely indeed. When appeasement was at its height British universities refused unanimously to accept the invitation to Heidelberg because they were so aghast at the German university attitude during the Nazi regime. Those in the German universities have rarely played a helpful part, a part which would have helped the Germans to feel and to accept individual responsibility.

We have no proof that if we develop or concentrate mainly upon the universities that they will do better today. There is the same type of professor, older, with the same outlook, with little idea how to help Germany to adopt a tolerant outlook. He is much more likely to be a great danger. We have no certainty that we can do very much with the universities which will save Germany. The same applies to secondary schools, because there, as in the universities, the method of recruitment is the old method, and in both the curriculum is narrow and academic. It is also wrong to encourage the German masses to look for leadership from the universities, for it has so often been their great tragedy that they have left it to someone else to make their decisions, to tell them what they should do, to tell them where to march and how to act. I have made suggestions that we should have a British lecturer inside each university. But if the universities are to be helped, it will not be so much by a large permanent headquarters staff as by sending over university lecturers of repute, who will not make a flying visit but will stay there for weeks, or perhaps a term, and establish real contact with the people there.

I would concentrate, not entirely, but mainly, on the 90 per cent. of the German people whose whole education lies in the elementary and vocational schools. If we can save them, we can save Germany. They are the children who will matter. We must use our limited resources to see that we concentrate as much as we possibly can on those children. Anyone who goes into those schools can see that the teaching there is much more concerned with the making of good watchmakers and architects than of making good citizens. Something has to be done to give them a wider outlook. It is there we should concentrate the resources which we have. In this country we learned long ago that the place to secure real reform was in the elementary school because there, in spite of large classes, we do try to teach Johnny and not arithmetic. This is a fundamental difference in teaching methods. The universities and secondary schools in Germany are subject bound—they deal with subjects more than with individuals. It is in the elementary schools that we should get down to the individual child and teach him to stand on his own feet and think for himself, to be tolerant and not to accept uncritically other people's opinions.

We have to hand in Germany at this moment a wonderful opportunity in the British families educational scheme. We have some really splendid schools, staffed by English teachers for English children. These schools are on the spot available for German teachers and authorities to see what we mean by our way of life. I have visited many of those schools and discussed problems with the teachers. They have our equipment and our methods. They bring German teachers in, they go out to German schools and show the Germans exactly what we mean by our system of education. We also have a magnificent secondary school at Wilhelmshaven which in some respects is a pioneer in secondary education. We may have the strange position of the Education Act, 1944, being first fully implemented, in some respects, in Germany. If we have to concentrate I believe we should concentrate mainly on the 90 per cent. of the children who go only to the elementary and vocational schools. But I do not want the devoted service of our Educational Branch to be wasted. I wish it to be effective. This, I believe, can only be fully achieved if we turn down the idea that Germany can be saved by saving the intelligentsia, and instead accept the view that she will be saved by concentrating such resources as we have mainly on the ordinary children.

6.39 p.m.

Mr. Richard Law (Kensington, South)

It is something of a relief to turn away from the grotesque irrelevancies of the Government's domestic programme, and to concentrate our attention, if only for a few hours, upon a problem that is certainly relevant, that is desperately immediate, and, I fear, may be tragically decisive for the future of Europe and for the future of the civilised world. I say that the German problem is decisive for the future of each one of us, because it seems to me—and I think it seems to all of us, wherever we sit in this House—that unless we can heal this running sore on the body of Europe, there is no hope of peace in our time, and little hope even of decent prosperity and comfort. The German problem is certainly a challenge, but in my judgment it is also a deep humiliation. Two years after victory the most complete and overwhelming that we have ever known, we stand today utterly defeated by this problem. I dare say there are many hon. Members who do not agree with me, but I believe that Germany is a greater threat to the peace of the world today, over the long future, than she was in 1921, two years after the Armistice. We have occupied her completely, as we did not do in 1919; we have absolute control over her activities, which we did not have in 1919, and with it all we have earned neither loyalty nor respect, nor even fear.

I think there could be no more striking commentary on the situation in which we find ourselves today than an item in the newspapers over the weekend reporting an incident in Germany. It reported how the Chancellor of the Duchy of Lancaster, in explaining the policy of His Majesty's Government to the political leaders of Germany, was greeted with "cynical and derisive laughter." I am not saying that in criticism of the Chancellor of the Duchy, a Minister for whom I have great respect, but it is a striking commentary on the depths of contempt into which we have fallen in Germany, and on the policy which has been pursued there by His Majesty's Government during the past two and a half years. Only one commentary could be more striking and that, if he will allow me to say so, was the very lucid speech of the hon. Gentleman the Member for Attercliffe (Mr. J. Hynd), who paid us the compliment on this side of the House of repeating almost verbatim every criticism of his own administration that we have made for two years past. He must have been paying more attention than he seemed to do at the time, because it really seemed today as though he had been learning our speeches off by heart.

When I say that the policy of His Majesty's Government is to blame for the situation in Germany, I would like to make two things clear. First, I am not criticising the Control Commission and the members of the Commission in Germany. I would like to associate myself with everything that has been said this afternoon about that body which, over a long time, has struggled with almost insuperable difficulties and with a lack of policy from London which must have been very disheartening indeed. I would like to make clear, too, that I am not seeking to lay the blame for all our difficulties in Germany upon His Majesty's Government. Clearly, it would be unreasonable to do that. It would be as unreasonable as it would be to blame two years of Socialist misgovernment—if I may borrow a phrase from the jargon of hon. Members opposite—for every detail of the gloomy speech that the Minister for Economic Affairs made in this House the other day. But in both cases, here in this country and there in Germany, it can be said that whatever men could do by their negligence, by their errors of judgment, and by their sheer incompetence, to exacerbate a situation which was always difficult and perhaps desperate, these men have done. I believe that the Government have made many mistakes which could have been avoided in their handling of the German problem.

I would like to touch on one or two of them before I sit down. But first, I would like to refer again to that question of new policy, which may or may not prove to be another mistake. I refer to the dismantling of the factories in the combined zone in Germany, around which a great part of the Debate has concentrated today. I know that there are hon. Members on both sides of the House who regard the decision which has been come to, and which was announced a week or two ago, as being both inhuman and ill-advised. I must confess that it is a matter on which I find it extremely difficult to make up my mind. It is difficult for two reasons: first, the report of the Committee on Estimates has only just been published, and, secondly, so far, we have not had any elucidation from the Foreign Secretary on this subject, which obviously touches hon. Mem- bers very deeply and which, for better or for worse, is likely to be crucial in our relationship with Germany. I hope very much that when the Foreign Secretary replies to the Debate he will be able to bring forward absolutely irrefutable arguments in support of this course.

Having listened to the Debate so far, I feel the gravest uneasiness about this step which has been taken. I can see that on paper there are very strong arguments for the dismantling of surplus German industry at this time. It is true that this is a matter that has been hanging fire for a very long time. It is true that, for as long as it did hang fire, there would be the maximum uncertainty in Germany and, therefore, it would be proportionately difficult to get German industry geared to its task. That, I can see, is true. Whether it is good or bad, it is true that this decision, in great part at least, is final. On that point I am a little bit dismayed by something which was reported in "The Times" on 17th October, which I take to be the fact. It would appear that this decision, drastic and contentious as it is, is not the final decision, because "The Times" told us on 17th October: Although precise and almost complete, it"— that is, the list that was published— is not quite the final list. It does not include plants in certain industries which were prohibited to Germany under a Control Council plan of March, 1946. Then "The Times" lists the plants and the products concerned and concludes: In the meantime these plants, and the surplus plants in the shipbuilding industry, are not included in the list; but their omission does not mean that they will be excluded from reparations. It simply means that a decision is deferred. If that is a true interpretation of the position, it seems to me that one, at any rate, of the advantages claimed for it—that it is a final decision—does not exist. I can see, too, that if we have decided upon a level of industry for Germany that is reasonable, that will give her a standard of life, allowing for the new circumstances, equal to that which she enjoyed in 1936 before Hitler's war machine got into top gear, there is everything to be said for limiting her industrial capacity to that. Otherwise, it is obvious that, sometime in the future, her surplus capacity may become the same kind of threat that her industrial potential became in the late thirties before the war. I can see, too, that other countries besides ourselves have a very deep interest in this problem. It is not only the Russians, and I hope that this decision is in no way concerned with any agreement that was reached with the Russians at Potsdam, because, whether we like it or not, the Potsdam Agreement is already dead and finished. Still, we have other Allies besides the Russians, and it may well be that the Foreign Secretary considers himself to be under a strong obligation to met their point of view as well as the point of view of the Germans.

From all these considerations of the problem, I can see that there is a case to be made out for this decision, and I hope that the Foreign Secretary will be able to make it, but at the same time I do not think anybody listening to the Debate can disguise from himself the fact that, however strong the logical case may be, there are certain practical arguments which seem to run the other way. I am not thinking only of the argument that the German political leaders will not particularly like it. On that, I agree with the hon. Member for Motherwell (Mr. Alex Anderson), who pointed out that, whatever we do in Germany, especially from now on, the German political leaders are not going to like it and are going to make the utmost capital out of it that they can. I am not so much concerned with whether the German political leaders like the decision or not. What I am concerned about, and what I feel the whole House is concerned about, is this: granted that this plan of dismantling is as perfect as any paper plan can be, if we get no assurance that it is going to work out in practice any better than any of the other paper plans which the Government have produced in this country, I feel very doubtful about it.

There is, for example, the question of the manufactory at Kiel, to which reference was made the other day. Under encouragement from the Control Commission, it did everything it could to produce German exports, and then, having booked a lot of orders at the Industrial Fair, was informed that it would be dismantled under this plan. There was also the case cited by the hon. Member for Merioneth who spoke earlier in regard to a soap factory that was to be dismantled, and a fac- tory for producing conveyor belts for the mining industry. Are these things already beginning to happen under the plan? And if so, can we doubt that they will go on happening, and that this plan, so far from producing a final solution of the problem, will be a continuing irritation of the situation, and will eventually be dropped? This is a matter on which the Government must accept the full responsibility. Having listened to the Debate, I must confess the gravest doubt, not about the justice of the plan, but about its practical wisdom in the circumstances of today.

I would like to say one other thing which I hope the Under-Secretary will report to his chief. This decision has been taken, rightly or wrongly; but, if it is to be reversed, let it be reversed now, at once, by the argument of the House of Commons. Let it not be reversed in a few months' time by an argument which always seems to carry more weight with this Government than any other—the terrible argument of events. I am sure that nothing could be more disastrous or tragic than that, in a few months' time, the Government should abandon this policy, not because it is wrong, but simply because they are, in fact, unable to enforce it. That would, indeed, be the end of our influence, not only in Germany, but in Europe, and I think in the outside world.

I want to say a few words about some of the things that struck me in this admirable report from the Select Committee on Estimates. It is quite extraordinary to me, on reading this report, which is not a Conservative Party report but a report of a Select Committee of the House of Commons, that almost every criticism of the Government's German policy that has come from these benches can be found in it. There has been a confusion in the main direction of Government policy in Germany. Instead of our going to Germany to control Germany against another war, we have been there, during the last few years, trying to govern Germany. That is a very different proposition and one that has brought in its trail certain consequences of very great evil.

First, I believe that that policy of the Government of trying to accept the whole responsibility for German life, instead of merely seeking to control Germany against a further outburst of Prussian aggression, has done more than anything else to pro- duce this "sullen" mood among the German people which was referred to by the hon. Member for Abingdon (Sir R. Glyn) in his admirable speech today, because, as a result of our having this vast and inflated Control Commission, the average German has laid the responsibility for failure on us, instead of putting it on the shoulders of his own leaders and on himself. That is the first evil consequence which flowed from this mistaken policy. The second evil—and it is clearly brought out in more than one section of the report—is that the more we have departed from the controlling, and the more we have gone in for this governing function, particularly where industry is concerned, the slower has been the revival of German industry. The report points out in paragraph after paragraph, that the only useful job that the Control Commission can do now is purely as an inspectorate, and that it has no job whatever to do as an instructor or governess. I would like to read to the House this sentence from paragraph 21 of the Report: On the side of trade and industry, however, the Germans are better able to assist themselves, and the Control Commission should confine themselves to ensuring that the Germans fulfil their obligations to the Allies. In the last resort, the task of social, political and economic reconstruction can only be successfully carried through by Germany herself. I believe that to be true today; I hope the Government will act upon it today; and I think it is a very great pity that they did not act upon it two and a half years ago.

Then there is the question of currency. The hon. Member for Attercliffe repeated a criticism this afternoon that he has often heard from these Benches—one which he had never attempted to make before—that the question of currency reform was at the very foundation of our difficulty today.

Mr. J. Hynd

May I correct the right hon. Gentleman? I have, in fact, made reference to that matter before, and have explained to the House why it was impossible to get the desired result until we had a united Germany.

Mr. Law

I very much regret if I misrepresented what the hon. Gentleman said in those days. Of course, I am very glad to hear that I was mistaken about it. But I would like to say a word about those difficulties which he mentioned, as he has just told the House, while he was in office, and which I very much hope the Foreign Secretary is not going to rely upon for justification of still further delay, when he replies to the Debate tonight. Of course, we all know what those difficulties are; they are all difficulties bound up with the Potsdam Agreement, and the necessity for getting quadripartite agreement before we could proceed. We have drifted away from the Potsdam Agreement on many points of great substance. When we raised the level of industry a month or two ago, that was not a breach of the Agreement, because it had already been broken; but that was a further departure from the principles of the Agreement. I do not see why it has been necessary or should be necessary in the future, to let these vital problems of currency reform wait upon the November Conference. I cannot see why that plan should only be in the pigeon hole; I cannot see why it should not already be in the process of implementation, and I trust that it will be made effective at the earliest possible moment.

My hon. Friend the Member for Flint (Mr. Birch), in a speech which delighted and amused the whole House, drew attention to some of the grosser absurdities of the policy of de-Nazification. I do not wish to go into that again this evening, but there is another absurdity on which I very much hope the Foreign Secretary will be able to give us some reassurance tonight. It is the question referred to in paragraph 16 of the Select Committee's Report, that of the Joint Export-Import Agency. It is also referred to in paragraph 55 of the Report, and it is that paragraph with which I am most concerned. The gross absurdity there is that, even now, when we recognise that it is essential to get the highest possible level of exports from Germany, and when the Joint Export-Import Agency was set up because that was recognised, we are still committed to the crowning absurdity that there is no incentive whatever for the German producer to manufacture for export, while there is every incentive for him to cut down his exports, and to confine his production to the home market or to the black market, as the case may be. It seems to me to be fantastic that, in the light of the present situation, we are persisting in policies of this kind, of demanding one price for German goods on the world market, and then giving to the German manufacturer a much lower price than he would get if he sold them in the domestic market at home. I hope the Foreign Secretary will see that that matter, in common with a great many other recommendations of the Report, will be looked into and acted upon at the earliest possible moment.

I do not wish to detain the House any longer on these topics, as I know there are other hon. Members who wish to speak before the Foreign Secretary replies. I repeat what I said earlier in my speech, that I very much hope the Foreign Secretary will be able to give a convincing reply to the critics of the dismantling plan, because I must say that, having listened to the Debate so far, I am not at all certain that the Government have not made yet another mistake in their German policy.

7.6 p.m.

Mr. Stokes (Ipswich)

I cannot but remind the right hon. Member for South Kensington (Mr. Law) that the views he has just been expressing are not those which he has consistently held throughout this very long controversy—a war which I have particularly waged on this side of the House—on the question of Germany. While I am not prepared to quote what he has said in the past—I have not his speeches with me—I was assured by "The Times" this morning that the right hon. Gentleman was again going to take the opposite view. Therefore, I can only call the matter to the attention of the House, and leave it at that.

Mr. Law

I am sure it was not the intention of the hon. Member for Ipswich (Mr. Stokes) to hold me responsible for what appears in "The Times." I can assure him that I have no responsibility whatever for that. With regard to the other point he made, I would like him to explain in what respect I have departed from my usual views in this matter.

Mr. Stokes

I can recollect the right hon. Gentleman speaking in a way diametrically opposed to my views in past Debates on Germany.

Mr. Law

Opposed to the hon. Gentleman's views? I thought he meant opposed to my own earlier views.

Mr. Stokes

I will leave it at that. Of course the right hon. Gentleman has no responsibility for "The Times," but it is fairly reliable, and it predicts what is usually in the minds of hon. and right hon. Gentlemen who are going to speak.

I would like to start my speech by congratulating my hon. Friend the Member for Attercliffe (Mr. J. Hynd) on his very statesmanlike speech. I might even have made it myself. I hope it will be very widely read, and I would like to say in passing that I think he has rendered a great service to the House. It is a long time since I heard a Minister retired from office come forward so soon afterwards and make a useful contribution on a subject with which he was concerned when in office. But my hon. Friend cannot have come to these views in the last few weeks, and, if he held them then as strongly as he does now, I am a little surprised that he did not resign. However, be that as it may. The hon. Member for Abingdon (Sir R. Glyn), who spoke earlier in the Debate, dealt at some length, very naturally, with the Select Committee's Report. I wish to join with him in the views he expressed about the Control Commission. Whether we think them adequate for the job is neither here nor there; the fact is that there are a lot of honourable and capable people who are doing their best under very difficult conditions. I believe that they are being asked to do an impossible task. I, like the hon. Member for Abingdon, decry the irresponsible people who go abroad for a few days and then write a bit of dirt in the public Press, just because the British public like dirt. I think it does us a lot of harm abroad.

The hon. Member for the Isle of Wight (Sir P. Macdonald) seemed to think that the whole of our policy in Germany was breaking down because of the so-called threat to bring under public control and ownership the mines and heavy industry. It makes one doubt a little—and I say this in no disrespect to the Select Committee that went out to Germany—the value of these voyages. I have been there many, times, and I did not find either among the industrialists or the politicians of any party—the Christian Democratic Union, the Liberals, or the Social Democratic Party—or any of the leaders, the burgomasters, and so on, any other determination than that the heavy industries must never again be allowed to come under private ownership. There is no doubt about that. They may not want the kind of nationalisation which some of us on this side of the House want. Quite definitely they are determined—and I think the Americans understand now—that the heavy industries and the coal mines are to come under public ownership. Let there be no doubt about that.

As the hon. Baronet the Member for Abingdon said, the whole of the German problem turns on food, in the first place. I hope steps will be taken to see that in Germany this year the Control Commission, embarks upon the great freeze-up in January with a proper reserve of food. I went into this matter in some detail with the responsible people who know. I mean the people who do the job—not the "brass hats" who sit in Berlin. I know the figures. At the present level of imports into the combined zones, unless the November and December imports exceed the anticipated amount of 814,000 tons, by 31st December they will be 320,000 tons short of an eight weeks reserve at a 1,550 calorie level. My right hon. Friend the Minister of Food considers it absolutely essential in this country, where we have magnificent transport and means of distribution, to have an eight weeks reserve. It is sheer lunacy to prepare for another three months freeze-up in Germany on anything less. If there is anything less—and I think there will be—we are in for a very serious state of affairs.

I shall not take up the time of the House in emphasising again the general food situation and the food level. The International Red Cross stated in their report that throughout the British zone the level was maintained at about 1,500 calories this year up to March and that after that it fell away to 1,100 on the average—in some places it was lower. One of the worst features of the food situation is the shortage of fats. I know that the crank nutritionist, and even the serious minded nutritionist, will say that fats are not necessary for good diet. They may not be necessary, but they are very nice, and they are absolutely essential for morale. At the present time there is not the slightest chance of having a ration of more than three quarters of an ounce of fats per person per week throughout the coming winter months, assuming supplies come in at a reasonable rate. This being so, why cannot we reverse the decision about the whaling fleet? Before the war the German whaling fleet used to bring in 100,000 tons of whale oil, which was converted into 120,000 tons of margarine. On the level of a population of 35 million in the combined zones, that would be the equivalent of another two and a half ounces per head of the population per week, which would in effect multiply by four the present weekly fat ration, and would make an enormous difference to the morale and the feeding problems throughout the combined zones. The Report says that according to the observations of the Committee as a whole, there was malnutrition but it was more or less confined to the industrial areas. I beg to differ. So far as my knowledge goes, the whole of Schleswig Holstein is in trouble, largely because of the refugees. The population of Schleswig Holstein has doubled; I think that 47 per cent. of the people living there are refugees. The general condition there is appalling, and it is wrong to assume that malnutrition is confined to the industrial areas.

The Report did not touch very much on the health situation. I would like to emphasise the facts of the situation in Berlin, particularly with regard to venereal disease. It is perfectly tragic. At the present moment 5.35 per cent. of girls between the ages of 15 and 20 have syphilis. That compares with.011 per cent.—in other words, one in 10,000–in 1938. Ten thousand were infected during the third quarter of 1946. That means that it is 550 times more prevalent today than it was in 1938. That is dreadfully serious. Yet the Report said nothing about it. With regard to tuberculosis, the International Red Cross says that throughout the British zone it is ten times higher than it was pre-war. In August, 1946, there were 46,000 contagious cases and 160,000 active. The trouble, of course, is that there are insufficient beds to go round. In Dusseldorf in August, 1946, there were 12,000 contagious tuberculosis cases living at home. In Dusseldorf there are 20,000 people still living in cellars, so that hon. Members will appreciate what it means to have 12,000 contagious cases living at home. I wish something more could be done to bring more hospital relief to these wretched people in the awful time through which they are at present passing.

I do not need to dwell on the clothing and housing situation. Clothing is practically non-existent. I saw in a newspaper the other day—and I do not doubt its accuracy after all the figures that I was shown during my visit—that there is one shoe per head of the population per annum, perhaps, and about half a shirt. That is about the figure at which indigenous production works out.

My hon. Friend the Member for Attercliffe spoke about currency and taxation. I will not refer to it except to say that something must be done, and done soon, to change the position with regard to taxation on the worker. He is still in the wretched position that, having done a week's work, after he has paid his taxes, if he has a wife and more than one child, he is quite unable to buy the legal rations to which he is entitled. From the figures which have been shown to me, it is a fact that there is nobody in Germany today who can earn more than 2,000 marks a month and keep it. At the Control Commission rating of 40 marks to the £, that means £600 a year. At the proper rate, if one took twelve marks to the £, it would go up to about £2,000 a year. Of course, one can say that it would not very much matter if the people earned more. It would not be of any use to them because the mark is worthless; it is necessary to reform the currency. That is absolutely vital, because until the currency reform is brought in and the mark bears some relation to the cost of production and the price structure, there is no way of cleaning up the black market.

I would like to illustrate how the black market works. The hon. Member for Flint (Mr. Birch) said that de-Nazified Germans are given the job of picking up bricks. The majority of them are far too intelligent to go on picking up bricks indefinitely, so, although I have no firsthand knowledge, I would suspect that a considerable number of them are in the black market in no mean way. I asked one of the leading German authorities on this question of distribution and price levels how the black market worked, because it is not a black market merely in food. It would be a most profound mistake to think so. Food only constitutes about 7 or 8 per cent. of the black market. Thirty-five per cent. of all transactions are on the black market.

Mr. Birch

More than that.

Mr. Stokes

It has been growing steadily. The anticipation of responsible people is that 100 per cent. of all transactions would be on the black market by Christmas. I would like to illustrate how it works, because it puzzled me at the time. The ordinary worker goes on Friday to get his pay packet, but he is not content to take marks only. If he works in a cutlery factory he wants a few spoons or knives. He wants those for his home. Perhaps he takes some spoons the first week, knives the second week, and forks the third week. By the fourth week they go to the black market. I said, "What about the man who rolls steel billets? He cannot walk off with a steel billet under his arm?" The man replied, "No, he is allocated 20 or 30 lbs. of steel strip; he goes into the countryside during the week-ends and trades it with a farmer for what he can get in the way of food in return." That is clear enough; and, quite simple, everybody does it. "What about the engine driver?" I asked. "I suppose he has a very difficult job from the point of view of black marketing?" The reply was, "Oh, no. His job is the easiest of all. He enters into a league with the Stationmaster of a wayside station, and with the signalman, and the porter, and the guard, and he pulls up by arrangement and they chuck off half the coal in the tender; and he picks up food on the way home again."

What about the farmer? He is the chief person for corrupting the civil service. The farmers have got pretty well all they want. They say in Germany that the farmers have all their rooms laid with Turkish carpets except the cowsheds. The farmer goes to the local municipal official and says, "I want a new cowshed," or a new wing to his house, or a new building. You can see a lot of this new building going on all over the countryside, although there is not much in the towns. The farmer says to the official at the municipal offices, "You sign my permit on the dotted line, and I will see you through next winter." Everything is getting rapidly more corrupt, and unless something is done to put matters right this position will get extremely serious. It is serious now, but it is going to become fantastically disastrous by Christmas.

Now there comes all this talk about dismantling, to take place against this background of little food, no houses, no clothes and civil corruption. Against that background this question of dismantling preys more acutely than anything else on people's minds. Potsdam laid down that the whole thing should be over by 15th February, 1948; that all the stuff that could possibly be taken away in capital goods should have been decided upon by 15th February, 1946, and carried off in two years. On that ground alone, I should have thought we had good reason for resisting this process, But is a conqueror entitled to take reparations before the peace treaty? There is not yet a peace with Germany. I have had this out with the Attorney-General before now, but he insists we are still at war. I regret that His Majesty's Speech from the Throne did not start with the customary words "My relations with foreign Powers continue to be friendly—except with the Control Commission for Germany."

I very much doubt if we are entitled to take any reparations at all until we have a peace treaty. We have not a peace treaty, and, therefore, legally we are probably quite wrong in taking reparations at all. I have searched round for evidence. I can only find some words of Mr. Lloyd George after the first world war and at the Treaty of Versailles. He said at the time that reparations had nothing to do with the Armistice but belonged to the peace treaty. It depends, I suppose, on what we mean by that absurd phrase, "unconditional surrender." But here we are in this jam, and if we have no other way out of the difficulty than that of the legal objection, we could use that, and say that we must not take any more reparations until the peace treaty is signed. If we could use that way out no one would be more pleased than I.

I want to know who wants this dismantling to go on. I know most of the senior officials in Germany have to say officially that they do because they have got to carry it out. I can understand that from their point of view, but I do not know anybody who, when one gets him on one side, and asks him if he has ever heard of a piece of more arrant nonsense, does not reply, "Confidentially, no." I wrote a critical letter to "The Times" on the subject. When I first went to Germany in 1946, in the Deputy Military Governor's house, the chairman of the economic section came up to me and said, "I congratulate you." When I asked him on what, he said, "For your remarks in 'The Times'." I said, "That was a criticism of you." And he replied, "Yes, but I agree with all you said." The Germans certainly do not want it to continue, and I am very glad to see that the American Senators are going on strike about it, and I hope they will stir up the State Department when they get home.

I have, however, another document which I think has a bearing on the matter. That is none other than the Morgenthau plan. This document is a memorandum dated 15th September, 1944, and was signed in Quebec by the President of the United States, and the right hon. Gentleman the Member for Woodford (Mr. Churchill). I will not bother to read the whole thing, though anyone may see it who wants to. The concluding sentence—the document dwells primarily on the disarmament of Germany—states: This programme for eliminating the war-making industries in the Ruhr and in the Saar is looking forward to converting Germany into a country principally agricultural and pastoral in its character. The Prime Minister and the President were in agreement on this programme. It was initialled: "O.K. F.D.R. W.S.C." This is disclosed by an American commentator, who added: Note: The late President told friends that after the war he planned to publish the secret Quebec agreement in order to make absolutely clear British-American policy regarding the future of Germany. That is another secret treaty of which we have not been told, despite the efforts some of us have made to get the whole of the secrets question cleared up.

I am surprised that Ministers and others can express surprise that the German people fear that there is something dirty about all this, and that part of this programme is really the result of fear of British and American industrialists of German competition. My right hon. Friend Lord Pakenham seems now to have gone in for indulging in pious platitudes. I very much regret it, because I thought he was with me. He announced the other day at Dusseldorf that he had not come across anybody in Germany who for one moment thought there was anything in that suggestion—that Britons and Americans were fearful of German competition. All I can say is that he does not appear to have met any of the Germans I know and that there are jolly few who do not believe it.

I am getting a little tired of these people with private lines or public-private lines to God, amongst whom is my right hon. Friend the Minister for Economic "Peacefare." He told us the other day that we all ought to pull together and rejuvenate our Christian principles. I entirely agree with what he says about the performance of Christian duties, but they need to be applied to affairs in his own department which controlled B.I.O.S. and T. Force, both of which operate in Germany under the Board of Trade. I have a docket here which I think is absolutely disgraceful. It is a photostat copy headed "Booty." Apparently, the authorities know that these actions are a swindle. Here is a case of a perfectly peaceful factory at Detmold in Germany making ladies' combs—things they stick in their hair, or comb their hair with. It is a factory which used to export before the war two million pounds' worth of combs. This is an order on the managing director to part with eight machines and two secret processes, which are to be removed. The name of the investigator visiting the factory is that of the managing director of a rival firm at Irthlingborough in England. The man capable of identifying the machines and processes is the managing director in England and the person to whom the Detmold factory's property is to be sent is the managing director of the firm in England.

That sort of thing is going on all over Germany and despite the effort to stop this piece of vandalism by the responsible member of the Control Commission for Germany orders were issued from higher up for the machines to be removed. The vultures have indeed descended on the corpse of Germany. All this level of industry talk is completely cock-eyed: I believe it has been planned in this country, and has little to do with people who are conducting affairs in Germany.

The Report does not say very much about it. It is rather smug. It scrimps over the question of the level of industry, except to say it agrees with what is being done. I am rather surprised at the difference in its treatment of the landlords, on the one hand, and of the workers in industry, on the other. The Report refers to agrarian reform, the Stripping and cutting up of land. It deems it much more important to continue the de facto management than to change the de jure ownership of the land because of the importance of food. That may be true, but if it is true of agriculture, I know from the knowledge I have of industry that it is of much more vital importance in industry.

With an economy which was really going one might go to the Germans and say—remember they have not been consulted about this question of reparations—"This is quite easy to move, and we are going to take it." But it is ridiculous to do so with the whole place smashed up. What we ought to do is to use every little bit of capacity they have in use and interrupt nothing. It is no solution to tell the people, "You are going to be much better off in ten years' time." That is like the bedside manner of a doctor, or of Mr. Pierrepont when about to hang a man, saying, when he puts the noose round his neck, "Look here, old boy, this won't hurt," but the man is dead when he drops! That is precisely what is happening to Germany.

I really cannot understand what my noble Friend is thinking about in this matter. How does he propose to shift the population round in Germany today? People are living in muck heaps in all the 56 towns which have been, as the result of the Quebec Agreement, bombed to blazes; that was decreed under the Morgenthau plan—for which I do not blame my right hon. Friend, because I doubt if he ever heard of it. How does he propose to do it? How are we going to move the workers from one smashed place and put them down in another when there has been practically no house building up to the moment? In our zone, 1,600,000 houses were completely destroyed; about 30 per cent. I do not want to be misunderstood. Nobody objects—and certainly I have not done so—to the removal of war industries. I am not talking about that element in this packet of papers which I have with me. I do not want to argue about that, because I quite agree that that dismantling should go on. But I wonder who planned this thing, or whether there was any plan at all? I wonder whether it was not some statistical calculation, like a high official in one of the Ministries whom I encountered the other day, when I wanted 39 tons of steel for an important job and was told I could not have it because there was not any. He said, "My dear Mr. Stokes, you ought to understand that they are all paper boys who do that. When there is no steel there they say there is, and when there is steel there they say there is not." I expect it is the same here. He was a very important civil servant, but I agree that the job is too much for anyone to tackle in Germany.

At Question Time today my hon. Friend the Under-Secretary told me I was wrong about some locomotive repairs. Well, let me tell him that I went into that question very carefully with the transport people in Germany, and they were in despair because as a result of the complete dismantling of Blohm and Voss and the Reichswerke at Brunswick they were going to lose a monthly capacity to repair 30 heavy locomotives; and here they are now, looking in Czechoslovakia and Belgium to find an equivalent capacity for which we shall have to pay dollars! If my hon. Friend wants more particulars I will gladly give them to him. We find the same in regard to ball bearings with factories being pulled down; yet in this country we are simply desperate for ball bearings; I use a lot, and we cannot get nearly enough. Again, the Henkel soap factory at Dusseldorf is being pulled down. Why? Has some soap combine decreed that Germans are not to have too much soap until some unstated future date? It seems a perfectly crazy notion.

Amongst the industrial factories scheduled for scrapping are ten making what they describe as house-building and road-making machinery. The whole place is absolutely' flat, so surely any capacity they have for house and road making plant ought to be maintained in the hope that we shall get it going sooner than is anticipated. At Question Time today I raised the question of three excavating machinery factories. This country is desperate for want of excavating machinery. At the present time we are importing 367 from America and paying 15 million dollars for them: five million dollars short of the cut in the basic petrol ration. What do I find? One of the particular factories is both a war plant and an industrial plant, and it is a category one plant; but the other two are not. I came to the conclusion that we could help the situation here, and in some export markets, by getting excavators made in one of these factories. So I started negotiations for delivery of 24 machines in 1949 but now the factory is to be pulled down. The whole thing seems to me to be fantastic nonsense and I cannot understand it at all. The Control Commission has at last succeeded in uniting Germany, astonishing though it may be, but, unfortunately, against us. Perhaps there will be a reaction though.

I urge my right hon. Friend to consider five points. First we want a central Government there as soon as possible. I hope that will be done as soon as maybe after the meeting of the Foreign Ministers. Second, the Germans ought to be given an import-export programme for five years, for materials and food, and told they must keep to a certain level of production with reparations, if necessary, to come out of current production. Thirdly, it is urgent that the present system of currency should be reformed. Fourthly, I agree with the hon. Member for Flint, it is high time that de-Nazification was stopped. It says in the Report that it will end on 31st December, yet I am assured by a very responsible person that they have not even received instructions yet, and cannot possibly get it over by Christmas, and it will be another six months or a year until they have completed that particular section of Germany. Finally, I would reduce the Control Commission to nothing more than a handful of advisers and a couple of thousand inspectors, a suggestion which I made nearly two years ago now, whilst leaving the army of occupation where it is.

In conclusion I ask my right hon. Friend this. I know all sorts of evil things were planned over which he had no control at all. In view of the fact that the Foreign Ministers' Conference is about to begin, and in view of the fact that quite obviously there is a general feeling against the practical application of this dismantling scheme which has now been published, can he not say, as my hon. Friend the Member for Attercliffe suggested, that though the dismantling of war plant must go on, the dismantling of industrial plant will be held over for consultation with the Germans after the completion of the Foreign Ministers' Conference. If he did that there would be a tremendous wave of revival and sympathy with our point of view throughout the length and breadth of Germany and this House will feel well pleased.

7.38 p.m.

Mr. Molson (The High Peak)

For a long time a number of hon. Members on both sides of the House have been trying to direct the attention of the House, the Government and the country to the policy behind the Potsdam Agreement and the level of industry plan of March, 1946. I feel that in this Debate we have at least been able to reach a point where the Foreign Secretary will have to yield on those matters of policy. The hon. Member for Ipswich (Mr. Stokes) has been prominent in this matter for a very long time past; and there has been a considerable measure of agreement between hon. Members of all three parties that the general policy being followed with regard to Germany was unwise and wrong. For a number of months we were unable to obtain a Debate upon this subject at all; for many months the matter was dealt with as purely a matter of administration; and the hon. Member for Attercliffe (Mr. J. Hynd)—who, if I may say so with all respect, has today made a very remarkable speech based upon two long years of bitter experience as a junior Minister—was always put up to reply. When we sought to raise matters of policy, naturally he could refer only to what were his directives—that he had to carry out the policy of Potsdam. At long last, we now have a Cabinet decision which modifies the level of industry plan of March, 1946, and I think the House and the country are indebted to the right hon. Gentleman the Leader of the Liberal National Party for his correspondence with the Prime Minister. [Interruption.]

Mr. Frank Byers (Dorset, Northern)

On a point of Order. Is it not a custom of this House that there shall be accuracy in the speeches made by hon. Members?

Mr. Speaker

Accuracy of speeches on every occasion is something rather novel to me.

Mr. Byers

Further to that point of Order, Mr. Speaker. May I, for the purposes of record, call your attention to the fact that the hon. Member for The High Peak (Mr. Molson) has attributed to the Leader of the Liberal National Party a letter sent to the Prime Minister, when it was, in fact, sent to the Prime Minister by the right hon. and learned Gentleman the Member for Montgomery (Mr. C. Davies)? That, I think, ought to go in the record.

Mr. Molson

The course of reparations after this war seems to be following exactly the same lines as it took after the Four Years War. Just as those reparations had to be cut down by the Dawes Plan, the Young Plan and other subsequent plans, so now the reparations are being reduced. I regret that the Government, and the Foreign Secretary in particular, are still seeking to carry out a policy which, to judge from the majority of the speeches made today, is obviously encountering increasing opposition and criticism in this House.

In raising the level of industry in the British-American zone, the right hon. Gentleman is making a technical breach of the Potsdam Agreement. So far as this is concerned, he is saying to our Russian Allies that, because they are not carrying out their part of the Potsdam Agreement that Germany should be treated as a single economic whole, we are entitled to modify the terms to which we have agreed. Why is he prepared to go just this far and no further? Why be so illogical as to introduce a new plan which will be abandoned with discredit after a few more months or years and not go the whole way? I beg him to realise that, so far as reparations from the productive capacity of Western Germany are concerned, it is impossible for these reparations to be paid. During the previous war, far less destruction was done to Germany than was done in this war, and yet no net payments by Germany were made at all. American and British money was poured into Germany in exactly the same way as it is being poured in today. Even if it were possible, surely it is undesirable.

I should have thought that the whole situation had undergone a change since Mr. Marshall made his speech, in which he asked that the countries of Western Europe should come together and put forward a plan for their own self-help, and then ask America to do what was necessary to see the thing through. Mr. Marshall said that America expected Europe to do what it could to help itself, and it is to the right hon. Gentleman's abiding honour and credit that he immediately responded to the offer made by Mr. Marshall. Is not the productive capacity of Western Germany the largest single potential contribution which Europe can now make to pull itself out of its mess? Logically, it was at the time when Russia refused to participate in the conference of 16 nations at Paris that the right hon. Gentleman should have adopted an entirely new policy in regard to the Anglo-American zone. Until that time it had been possible to argue that no sufficient breach had taken place to warrant us building up a Western Germany independent of Eastern Germany. It might be argued, as it has been argued by the right hon. Gentleman, whom I compared, last time I spoke on this subject, to Job, that he would go on waiting until there was a change of heart on the part of the Russians. [HON. MEMBERS: "Jeremiah."] It was Job who showed patience. Jeremiah was the man who went in for lamentations. Today I am the Jeremiah in the House deploring the lack of decision on the part of the Foreign Secretary, and I dare say that all Europe will be Jeremiahs before long.

That potential contribution which Western Germany should make to the resuscitation of Europe is now being sacrificed because, just at this very moment of time, only four weeks before the meeting of the Council of Foreign Ministers, the right hon. Gentleman has approved the publication of this long list of plants to be demolished, 25 per cent. of which are to be sent to Russia and to Poland, the two countries which expressly contracted out of the task to which we have set our hands, in response to the invitation of Mr. Marshall, of trying to reconstruct Western Europe.

It is this pathetic persistence in waiting for leave which makes it impossible for us to carry out a currency reform. We have the weighty support today of the hon. Gentleman the Member for Attercliffe, as well as that of almost every other hon. Member who has spoken, that there is no real chance of putting the economy of Germany upon a sound basis until there has been a complete reform of the currency system. I hope the Foreign Secretary will explain how it is that he he is able to reconcile his acceptance of the Marshall proposal, and his courage and initiative in calling together the Council of 16 Nations in Paris, and this extraordinarily wanton act on his part of approving at this time this list of demoli- tions of factories in Germany. Will he please answer this particular point? Since to a large extent America is now taking over responsibilities in Western Germany, it may, for the purposes of record in the future, be important to know that the policy which is now being pursued—this policy of sabotage in Western Germany—has received not merely the approval of the American administration in Germany, but also the approval of the Secretary of State in Washington.

7.49 p.m.

The Secretary of State for Foreign Affairs (Mr. Ernest Bevin)

I wish first to express my gratitude to hon. Members who have spoken for their contribution to this very vexed and difficult problem. I must call their attention to the policy I enunciated on behalf of the Government in the speech I made on 22nd October, 1946. I then outlined the general principles which we were following and which have governed our policy in Germany. They were to ensure that Germany is never again allowed to revert to a dictatorship, or to menace world security by the adoption of an aggressive policy; second, to establish constitutional machinery in Germany aimed at developing sound democratic institutions; and, third, to establish economic conditions in Germany which will secure for her a peaceful economy, and an adequate standard of living. From that we have not departed; it stands today. We have not diverged from the principles I then enunciated. But we have not been free agents in dealing with this problem. I would ask the House to remember that we took over the administration of a zone which was completely smashed, as a result of unconditional surrender which was carried out to its bitter conclusion.

Virtually, we have had the task of building a new State. If we had gone into Germany free and unfettered there are many things we should have avoided, and many things we should have done. But at that time it was a country which had been ridden by Nazism, and we had to face it without a German civil service, without any organs of Government, and with the necessity of removing, by de-Nazification, the senior German officials and industrial administrators who had hitherto been running German political and economic life. If Members of this House have changed their view in two years I am afraid that the facts do not change with them.

The hon. Member who called attention to our de-Nazification proposals, and their effect on the German civil service, and who ridiculed our position, ought to have had the decency at least to mention the facts. There were 4,000,000 members of the Nazi party in Germany, who actually entered that party, who were indoctrinated in it under the terms of most horrible oaths. That was the situation we found when Germany was defeated. We have had to sift this 4,000,000. There were 370,000–one in 10–who were dismissed, not only from the Government, but from industry and other sources. Any Member who knows what an indoctrinated Nazi or Communist is like, will realise that it was difficult to go through this number and find a way through which was safe for the future. I suggest that our people have done this very thoroughly and very well. We have decided to end this business at the end of this year, and from then the numbers will begin to run down. In view of what Germany was like after the Hitler regime, I suggest that to deal with this problem in 2½ years, for the safety of the future of the world, was a very good piece of work indeed.

I know it is easy to say, "Take risks." I know there are difficulties with Russia, but if we were Frenchmen and not Englishmen we would be worried about the resurgence of Germany. If we were Belgians and Dutch, with the frontiers which they have to defend, this problem would be of very great concern to us in deed. Therefore, I ask Members of the House to look at this problem not purely as Englishmen, but as partners in the comity of nations in Western Europe. It is extremely vital always to keep that in mind. During this period there have been two very conflicting balances; it has been very difficult to decide. I spent hours and hours with the right hon. Gentleman the Member for South Kensington (Mr. Law) trying to study this problem before the end of the German war. None of the arguments he has put today did he put to me then—

Mr. Law


Mr. Bevin

I am not going to say anything derogatory: rather will it be in the right hon. Gentleman's favour. When we arrived at the figures which I will refer to later we did not consider revenge; we did not consider anything vindictive. I am referring now to the Coalition Government. What we did consider was what was necessary for our security, and what would give the Germans a decent chance of recovery. I have not departed, after months of study, from the principles on which we founded the original report which we tried to adumbrate at Potsdam and elsewhere.

Mr. Law

It is true that the right hon. Gentleman and I sat together and came to certain conclusions, but it is also true that at that moment neither he or I, nor any other Englishman, had been inside Germany. We were not aware of the conditions as they have developed, and I suggest that we cannot consider ourselves bound in every detail by conclusions which were come to before the end of the war.

Mr. Bevin

We did not come to it on that basis at all. The right hon. Gentleman will remember that. It did not matter what the conditions in Germany were at that moment; it was what we felt it would be necessary to do. I am encouraged by the Report which the Select Committee have recently published and in which they have adopted, I think wisely, a constructive and helpful approach. I cannot now go into details of this vexed and difficult problem—I hope a non-party one in view of our future security, and the security of Western Europe and the world—but I undertake to study it with great care, as well as the ideas of any other Member for dealing with this problem.

After working out our proposals as a British Government we came to Potsdam. As has already been said, the fundamental principles of Potsdam were that Germany should be treated as an economic unit. There were a lot of difficulties about it; it meant that the whole of the indigenous resources of Germany should be distributed for the German people as a whole, and that there should be a level of industry that would maintain a decent standard of life. I cannot attribute everything to Russia. I want to be fair. The French were very concerned about what were called the central agencies—railways and things of that kind—because of their implications, and the effect they might have on France. One must remember that France was not present at Potsdam She made these reservations, and the central agencies were never introduced. That was the first thing that went wrong.

Secondly, it was found impossible to introduce the economic unity of Germany. I am not going to try to enter the Russian mind. I do not know what their reasons are or are not; all I can go on are facts. The economic unity of Germany is not established. Current reparations have been taken from the Soviet zone. Plant has been taken from the Soviet zone. What the Soviet zone is like I cannot tell; we get very little information, but the effect on our zone has been terrific. The population before the war was 20 million; it is now between 22 million and 23 million, an increase of 13 per cent.

The other very vast problem which we have to face—and I hope that it will not be lightly passed over when we are criticised for low production—is that the population in the British zone is entirely out of balance. Refugees poured in—elderly people and children, and it is to the credit of His Majesty's Government that they have not turned them back. We have stood the cost and borne the brunt. Some of the best miners and workmen have been either prisoners of war or in mines in France, Belgium, Russia and Poland, or in other forms of industry throughout Europe, and we have—I do not want to use the word offensively—virtually had to build up this industry on a high proportion of what is called "green" or untrained labour. That is the fact which we have to face in the administration of the zone. We have to carry three million refugees in that small zone alone and, as I have said, with an age group disproportionate to productive capacity. I am constantly getting letters complaining at my not taking more. Refugees are in Denmark and they are in other places; but one has only to mention these figures to see how difficult it is to take them. This zone of ours was never self-supporting from the point of view of foodstuffs. It is an industrial zone. It was only made self-supporting by its ability to import from other parts of Germany.

I must repeat what I said in the previous Debate. I could see in Paris in July of last year, with the disagreement, continuing, nothing but disaster staring this country and our zone in the face. I decided, and I was supported by the Cabinet—I am afraid afterwards because it had to be done in a moment—that it the quarrel about the economic unity went on, then Great Britain would have to take steps to make our zone self-supporting by hook or by crook. I do not quite know how, I confess, but I realised that it could not go on as it was. Therefore, a few weeks afterwards, when the United States offered fusion, His Majesty's Government accepted. I know that the fusion agreement has been criticised, but it was not only with the Control Commission in Germany and General Clay that we had to contend; we had to contend with the United States Congress in getting this agreement accepted. In New York last year, I carried the agreement on the United States and British zones on a 50–50 basis.

What was the position then? I am sure that hon. Members of this House will not accuse me of the droughts. I am not responsible for the failure of harvests, and there was a tremendous failure of harvests throughout the world. The calorie level had fallen to 1,000 and prices were rising. I could not see how we could procure food for this zone at any price, when we entered into this agreement with the United States. In the Debates at that time in this House food was a grave consideration, both for this country and for our zone in Germany, as well as for other countries. We agreed to make the fusion in such a form that the other countries could join. It was so devised that if Soviet Russia or France cared to come in, there it was, and they could be fitted in. Again, we had a great disappointment over payments. If I remember rightly, wheat was running then in the United States at about 1.75 dollars per bushel. It rose to three dollars and the whole basis of calculation of fusion went completely. In addition, we were unable to procure sufficient to carry through the bargain.

Then we had another difficulty. We have been criticised for not bringing the Germans more and more into the political administration of Germany. I say, with all respect, to that criticism that when we did so one of the disappointing results was the handing over to the Germans of the collection of grain and administration too early. I do not criticise it, but the fact was that this problem was handed over before the Germans had secured sufficient competence in administration to be able to do it successfully. Hence, the second breakdown. We had then to take a good deal of it on ourselves again. We have tried throughout the period to keep the calories as high as we can. What have they been? I think that I ought to emphasise this in order to establish one or two other points in a moment. It is only in the last few weeks that they have reached 1,550 and with the cuts announced in the House last week by my right hon. Friend the Minister for Economic Affairs—I always want to call him the Minister of Economic Warfare and I get into trouble over it—he announced, I believe, 2,700. One has only to mention 1,550 to see how difficult the situation is. With the added rations the maximum for the heaviest worker in the Ruhr does not come to 3,000. It is in the light of that situation that we have to build the new industrial production. Until the food situation is settled our difficulties are going to be very great.

I come to the level of industry which has been the main bone of contention in all this Debate. In the fusion agreement we all decided that there had to be a new level of industry. How did the old level come about? It has already been referred to. The first Morgenthau plan I always thought was disastrous. [Inter ruption.] I am not responsible for the secrets. Secondly, it was—

Mr. Stokes

It was decided by the right hon. Gentleman the Member for Woodford (Mr. Churchill).

Mr. Bevin

I do not know that. It was never approved by the Cabinet, so far as I know.

Mr. Eden (Warwick and Leamington)

It was not.

Mr. Bevin

Not while I was a Member of it. I will come to this question if hon. Members will allow me, because my time will have gone if I do not hurry on. The first draft started with about 4 million tons from Russia—I am speaking from memery now; it can be checked against the exact figures—a low percentage from France and 5.8 from America. My hon. Friend the Member for Attercliffe (Mr. J. Hynd) was instructed to fight—and did so—for the 11 million tons which was the original calculation of the committee of the Coalition Cabinet. From that figure we have never deviated one inch. We had to get an agreement in order to get things going. When the 5.8 million tons was agreed to it was laid down that, in the event of the achievement or failure to achieve the economic unity of Germany—either way—the whole of this figure had to be reviewed. The issue came up again in Moscow and to my astonishment the Russians then proposed 12 million but coupled with it was the condition of current reparations. I was a little surprised to hear the hon. Member for Ipswich (Mr. Stokes) say that we ought not to have taken any plant but should have agreed, I presume, to long-term current reparations from Germany.

Mr. Stokes

No, my right hon. Friend misquotes me. I did not say what we ought to have done, but what we ought to do now is have a five-year plan.

Mr. Bevin

I look with very great disfavour on current reparations. Current reparations could not be taken on the present level of industry to which we have agreed. It does not take that into account at all, and if raw materials and food had to be imported in order to provide current reparations, then the United States and ourselves would be in precisely the same position, finding the money to pay reparations. I cannot agree to that policy. That is one issue which has divided Russia and us all the way through. Indeed, I have taken the other line in the name of His Majesty's Government, that if the economic unity of Germany is established and a level of industry is fixed at whatever level it may be, or even without one, the first charge on German economy ought to be the repayment of the money that we have paid to keep the Germans alive during this critical period. I think that is a far greater and more justifiable claim than current reparations.

Therefore, we announced in Moscow that we could not stand on this agreement on the level of industry any longer. If no one else would agree with us the Americans and the British must fix something to work upon. That brings me to the dismantling of plants. One would imagine that we were dismantling the whole of Germany. Originally, the plant that was to be dismantled was to be of two kinds: One of them was war plant and the other was a set of plant, allowed by the Four Powers together, in what were called categories 2, 3 and 4. These included an enormous volume of plant.

I disagreed with that proposal all the way through. At Moscow I did agree, so far as our zone was concerned, that if there was to be an operation on war plants we should get the operation over and done with, because it was stupid to go on wrangling about it any longer. Therefore, we agreed to get the purely war plant in category I dismantled and ready for removal by June 1948. Then I said that if there were to be any further reparations under other headings, due to a new level of industry, they should be tabulated and marked down for dismantling and we should get it over as quickly as we could. I think that was a sound policy.

What is the effect of it? There will be 682 plants on the list, of which 302 are in category I. The balance of 380 is what were originally included in categories 2, 3 and 4, with the exception, as one hon. Member has mentioned, that there are certain reserved plants which are subject to a Four-Power agreement. Decision on them will be delayed until after the Council of Foreign Ministers, in November. The number of persons affected by this dismantling is 50,000, in a population of 23 million. Fifteen plants have already been dismantled and 99 are in the process of dismantling.

Another difficulty arose in this connection. It was claimed by certain Powers that we should dismantle not only plants but also buildings. That is, we should not only remove the mechanism, but the building. I felt it was right that constructions solely adaptable to war purposes should be removed, but where buildings could be converted into residences, we decided, in view of the housing difficulty, that these should not be destroyed. The process of dismantling is going on without destruction of buildings. We are urging that the buildings should be converted into flats—some of them are very good buildings—for residential purposes as speedily as possible.

Mr. Peter Thorneycroft (Monmouth)

Would the Foreign Minister be good enough to clear up one point? He mentioned that 50,000 people would be involved. Is that the figure of men at present working in the factories which will be demolished, or is it the number of men who will be required to pull down the factories themselves?

Mr. Bevin

To pull down, 30,000 will be employed, and 50,000 are actually employed now. That is 80,000 all told. It may be that the same people will be employed for dismantlement.

Reparations policy is, therefore, an integral part of the economic plan for Germany. Reparations are being met from the industrial capacity created by Hitler since 1936 for the purpose of waging war. In our view it is essential to secure that. It may be argued that we ought to do this with this factory instead of that factory. If any special case is put to me I will certainly look into it. I have no objection to that. I cannot know every factory in detail, but if my attention is called to an obvious mistake I will certainly look into the details and see what the facts are. As a general principle that is essential.

At Moscow we had representatives from what is called I.A.R.A., the body representing the Paris Agreement for the disposal of the reparations to the small Allies—not Russia. There were bitter com-plaints at the failure to deal with reparations, both the return of stolen plant and the reparations they thought they were justly entitled to in the Paris Agreement. These were countries like France, Belgium, Holland, Luxemburg, Yugoslavia and others whose industries have been ruined, whose plants have been taken away—do not let us have memories too short to remember What these people went through. The Germans have, after all, waged two wars and these countries have only acted in defence. Why all this tenderness in view of the devastation everybody has suffered? I am forgiving, but I am not so forgiving as that. When they have been raided twice in a quarter of a century by such mighty forces, the people who have been devastated are entitled to consideration, and I ask the House to support me in that task.

The smaller Allies therefore made strong representations that they should be dealt with fairly. I came to a conclusion in that Conference. I am sure any other hon. Member who had been sitting there listening to the evidence would have come to the same conclusion. While the Four Great Powers Conference continued disputing, I said, "Let us get this reparations business over and done with. Fix a new level of industry, say what you are going to do, take the plants, give them to the people who have a right to them, and then let us start oft clean with Germany after that." The Germans have talked about this. There is no outrage in the German mind about this business. They know the price has to be paid. I hope they will not be discouraged from paying it by the assumption that we are going back on the scheme. What the Germans are entitled to know is, "Is this the end?" That is a reasonable question to put. So far as we are concerned, subject to the reservation of those industries which have still to be decided, I say to the Germans for the purposes of their own economy, "This is the end." If, by chance, some agreement is arrived at which involves current reparations or some other payment—I have already indicated my view as to that proposal—it cannot come out of this level of industry. I hope I have made myself quite clear to the German people on that point. The Germans will, therefore, know their position exactly. I am satisfied that the proposals we have put forward in this plan are fair and can be carried out, and I hope I shall have the support of the House in bringing this very difficult problem to an end.

Reference has been made to coal. It is such a vast subject that it is difficult to deal with it in the time. With reference to coal and transport, I acknowledge that if coal goes up towards 300,000 tons a day we shall have difficulty with transport, but what country has not? America has difficulty with transport at the moment. I think it will be discovered that it will be a very tight fit to get through in this country during this winter. If the coal output goes up, and other production goes up, we shall have to work very, very keenly to. get the full advantage of our transport. There is not a single British colony that is not clamouring for transport, and therefore all over the world transport is short. Added to that, we have had great difficulty owing to the drying up of the Rhine and the awful problem of moving ships on the Rhine during these past few months. I am bound to acknowledge there might be difficulty in transport. May I say, to save going into detail, that I am putting in the Library for hon. Members to see the Report of the discussions and agreement with the Americans on the North German Coal Control. I think the details there will indicate the accomplishment of an amazing task. What was it?

When we entered Germany, in the first months the output was 40,000 tons a day. We had very few regular miners, no houses, very little food. I want to pay my tribute to a very fine technician and manager, a Yorkshireman, Mr. Collins, who has done a magnificent job in the North German Coal Control. So much so that, with all the criticism—I think unwarranted criticism—in the United States, when they went into the facts they acknowledged that Great Britain had done a great job. Production went up first to 238,000 tons, then the food crisis to which I have referred came upon us, and it went back. Up to yesterday it has now been brought up to 256,000 tons a day. That is a great contribution to Europe.

Now I acknowledge that we have not been able to do much with currency. We have to get four-Power agreement on currency. Here again, Russia and ourselves nearly agreed. The difficulty there was the question of where the notes should be printed, and the control [Laughter.] A very important factor. On that, agreement was not reached, but I acknowledge that currency reform must follow very closely either on a breakdown in November or on success, whichever way it goes. We cannot delay it. We have had to provide other incentives. Those incentives have been food packs and a variety of devices which, if this new effort we have made now achieves success, ought to bring us before Christmas to 286,000 tons a day, which will be a big contribution to European recovery.

Agriculture. We planned for a much higher production this year and succeeded, but, again, the weather has beaten us; the drought has set the results back as it has in other countries, but our plan next year is again to try to step up the agricultural plan in Germany so as to bring it much higher, and nearer to being self-supporting, or at least, if we have to go on as a Western Germany, to make it less dependent upon outside importation. Then too, we have reactivated the fertilising plants, brought them back into full use, and in a very short time the output of fertilisers will be as high as prewar, which again is a contribution to the independence of that territory as regards food.

Reference has been made to linking Germany with the Marshall Plan. May I say that nothing would have been more fatal to the Marshall Plan itself than to have done that. Hon. Members forget that it would have created a situation in Eastern Europe far worse than the present situation. Poland would have said, and rightly said, "You are taking Germany and putting her ahead of all those who fought against her, and placing Germany in a preferential position." I really cannot ignore the opinions of other countries. If one has sat in conferences and listened to the outpourings—I am not talking about the political vindictiveness that comes from propaganda but of the real feeling—of those countries in Europe, one realises that in dealing with Germany it is useless not to take them into account when arriving at conclusions.

Mr. Frank Byers (Dorset, Northern)

Following Mr. Speaker's decision on Thursday, might I ask whether I might formally move the Amendment which stands in the name of my right hon. and learned Friend the Member for Montgomery (Mr. C. Davies) and myself, which states: But humbly regret that Your Majesty's Government's policy of dismantling factories in Germany will impair European recovery and will prejudice the fulfilment of the Paris plans.

Mr. Deputy-Speaker (Major Milner)

Mr. Speaker indicated that he intended to call the. Amendment in the name of the hon. Member for Hereford (Mr. J. P. L. Thomas) dealing with the Armed Forces.

Mr. Byers

May I refer you to Mr. Speaker's remarks in column 238 of HANSARD: I have carefully examined the subject matter of the Amendments which have been put down, and I am quite prepared to call Amendments, for a Division if necessary, if hon. Members want to record a Vote. The Amendment down in the name of the Liberal Party would be covered on Monday."—[OFFICIAL REPORT, 23rd October, 1947; Vol. 443, c. 238.] I can see nothing in HANSARD on Friday which in any way suggests that that is limited.

Mr. Deputy-Speaker

I must remind the hon. Member that Mr. Speaker made it clear on Friday that the Amendment he proposed to call was that in the name of the hon. Member for Hereford and, as the right hon. and learned Member for Montgomery (Mr. C. Davies) was in his place at that time and took no exception to that Ruling, I think it met with the agreement of the House.

Mr. Byers

I must submit to your Ruling, but I have to say to the Government that we shall demand a full Debate on this subject.

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