GOVERNMENT POLICY

HC Deb 29 October 1947 vol 443 cc877-997

3.44 p.m.

Mr. Harold Macmillan (Bromley)

In the Debates which have so far taken place on the Loyal Address there have been two outstanding contributions. Last week the House listened with grave attention and respect to the Minister for Economic Affairs. Many hon. Members have since carefully read and re-read that statement. It was cast in a grim mould. There was little deviation from its sombre theme. It was felt by all its hearers to be of vital, perhaps historic, importance. Yesterday, the House listened to one of the most powerful and overwhelming of the many orations which it has heard from the greatest figure in public life today. The Minister for Economic Affairs, save in his elevated peroration, never deviated from a cold and dispassionate but relentless presentation of the case. My right hon. Friend the Member for Woodford (Mr. Churchill) displayed all the variety of talent and genius which have made him one of the greatest orators in history.

Yet these two speeches, for all their contrast, had one thing in common. Both were formidable indictments of the policy which His Majesty's Government have followed over the last two years. Indeed, in some respects, having regard to the occasion and the position of the speaker, of the two perhaps the former was almost the more damning. This Amendment accuses Ministers in respect both of their past actions, or inactions, and of their future intentions. Two years ago the Socialist Party was in a strong and apparently inexpugnable position. A large majority in the House of Commons, even if not based upon a majority of votes cast, gave them an overwhelming advantage. The Government contained a number of tried Ministers who had learned experience in the testing days of war. This superiority was reflected by a general attitude of members of the triumphant party in the early Debates of the Parliament. We were treated with a mixture of arrogance and condescension which we might have resented had we not realised it would be so fleeting.

I remember that the Leader of the House used humorously to chaff us on our inability to conduct the functions of Opposition with sufficient vigour. He offered to give us lessons; but that was before he and his friends became so sensitive to criticism. Indeed, never have a Government started a Parliament with such a fund of good will. Apart from the convinced Socialists whose suffrages they had obtained, they had with them a large part of the middle classes as well as the general body of organised labour. They had a substantial support from that most important body of the electorate which has little or no party affiliations They had a friendly Press—[Interruption']. They had not started to muzzle the Press then. That came later. Indeed, in all sections of the public, Parliament, Press, and the people, the general feeling was one of good will. Even among formal opponents the mood was one of "Give them a chance."

But there was one fatal worm in the bud, one lurking disease which, like a poison, began to eat into them from the very start. This Government ever since they took office have been haunted by their promises. Of course, I know that the Leader of the House, astute politician as he is, has been able—as he did last night—to quote a few saving phrases, a few warning sentences, which were put into the pronunciamentos of his party and which he was able to call in aid. Of course, that it why he put them there. It is an operation which, if I have been properly informed, is known in another connection as "hedging"—£50 each way on Utopia and £5 on that likely outsider Austerity. Let each hon. Member opposite remember and honestly search his heart and mind. Let him ask himself this question—Is it not a fact that the general impression created on the public mind two years ago was that a Labour Government would bring into being—I do not say a universal millennium in a fortnight—I think it was housing that was to be done in a fortnight—but at least a good long step towards it? Abroad, a Socialist Foreign Minister would automatically achieve a deep and sympathetic friendship with the rulers of the Soviet Union. At home, after all the sufferings of the war, conditions of clothing, transport, housing, food and leisure—in a word, all general comfort would rise to standards hitherto undreamed of,

I will not weary the House with the quotations from the speeches of 1945. Ministers must be almost as sick of them by this time as we are. How far away it all seems now. These dreams have melted like the snows of yester-year, and now comes the inevitable judgment upon them. The Minister for Economic Affairs will recognise these words, for he wrote them himself many years ago: Continual professions without performance are the most damaging form of advocacy. It drives away people to bitter disillusionment. And yet, so skilfully was this propaganda conducted through the later years of the war, with increasing assiduity, that not only the congregations but the preachers themselves became victims of their own heresies; for they persisted in this false mood of optimism, in spite of the warnings, for over two years, and some of them, to judge from yesterday's Debate, are not convinced yet. They were remarkable for their blindness. Perhaps the most farcical example, which I cannot refrain from quoting, is to be found in a splendid piece of oratory delivered at Liverpool on 6th October, 1946, by the Attorney-General, and for which I understand he has not yet apologised. On that day he delivered himself of the following rhapsody: The dawn is here. We are marching towards the sunshine of a greater liberty than our people have ever known. To make the people happy, to let the people sing is certainly the object of the Labour Government. Well, I do not know what song they are singing now, unless it be to their former Prime Minister—" Will ye no come back again? "

What a record of two years work! First, the fuel crisis. Does anyone seriously maintain today, except the Secretary of State for War, that the fuel crisis was well handled last year? Even he must be a little dizzy by his sudden transition to the Horse Guards. All this sad story is so well known that I need not tell it once again. The wounds of the last winter upon our economy are still unhealed. Then the food crisis comes along, and once more, conflicting statements, confusion, uncertainty and disorder. I am not myself what is called "calorie-minded," but since it is the accepted standard of measurement, let us remember that the Minister for Economic Affairs told us that we are to be reduced from 2,870 calories to "just below 2,700." It is, perhaps, worth remembering that a careful and scientific investigation has shown that, at the worst moment of the slump in 1932, in Stockton-on-Tees, then my constituency, the unemployed man consumed 2,910 calories; and, in Newcastle in 1933, the same scientific inquiry showed a total consumption of 2,837 as the average intake of the unemployed man. Now, the average for the whole country is to be under 2,700.

Next, the housing fiasco. The right hon. Gentleman the Leader of the House last night made a spirited if rather stale attempt to refute the charge against his own administration by a comparison between the period after this war and the period two years immediately following the first war. It is easy to be wise after the event and, indeed, as somebody wittily said, it is wise to be wise after the event. The purpose of looking back to the past is to learn its lessons and apply them. That is what the National Government did in the very throes of war. The Leader of the House did not tell us that. He did not tell us of the plans made by that Government, of which he and some of us on this side of the House were Members—plans to build up the labour force to a very high figure, and that force has, in fact, been available to Ministers. At the same time, plans were made to manufacture various types of prefabricated houses. [An HON. MEMBER:" Give the figures."] If the hon. Member will wait a minute, we will come to the figures. The right hon. Gentleman did not analyse the figures—

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

If the right hon. Gentleman will forgive me, I was talking about houses, not paper.

Mr. Macmillan

So are we. The Conservative Party did not claim that a great output of permanent houses could be achieved in the first two years, but we said that we would undertake to build 220,000 permanent houses in the first two years after the end of the German war. Of course, that was laughed out of court as hopelessly inadequate, and even the right hon. Gentleman the Member for Wakefield (Mr. Arthur Greenwood) called it chicken feed. Now, with great pride, the Leader of the House tells us that his Government have built 226,000 houses in the same two years, but he did not tell us—he carefully refrained from telling us—that nearly half that number—103,000 out of 226,000–were the "paper" to which he has just referred—prefabs. It is true that, in the two years from the end of the last war, housing was not conspicuously well handled. Indeed, it could not have been; it was handled by Dr. Addison. After two years had been wasted, he was summarily dismissed by Mr. Lloyd George for being incompetent. What did he do then? He did what all incompetent Liberals always do: he became a Socialist.

In his valedictory letter to one of his old retiring colleagues, the Prime Minister used the words that "age must give way to youth." Age, in the form of the right hon. Member for Wakefield, goes out, and youth, in the form of Lord Addison, comes in. The truth is that if the second world war had not come about, the immense strides to settle the housing problem would have led to a rapid solution. Let us give honour where it was due; it was due, above all, to the efforts and tireless labours of two men, Mr. Neville Chamberlain and Sir Kingsley Wood.

Then came the financial crisis. I hesitate to tread upon the ground of finance where even an Agag might prove too clumsy. I fear I am not competent to join issue with an expert knowledge in the more intricate parts of the Chancellor of the Exchequer's apologia. Since he made his speech last Friday, I have read it several times over carefully, slowly, and aloud to myself. But I am still—and that is the experience of other hon. Members on all sides of the House—somewhat befogged and confused. Perhaps I was meant to be. The Chancellor would have made a perfect conjuror. He has all the patter, all the quickness, and the rather dramatic personality that is required. But, all the same, dazed as one is by the flood of talk, and mesmerised by the rapidity of the sleight of hand, one yet has an uneasy feeling all the time that one's gold watch could not really have been turned first into a rabbit, and then into a glass of water. And one's dismay is all the greater when one gets to one's seat and finds that the conjuror has kept your watch.

Nor do I wish to enter into the battle of the economists. I thought, considering his doctorship, that the Chancellor was a little hard on the professors. Of course, Professor Robbins and Mr. Harrod are not so well informed as the Chancellor. They have only the sources of information which the Government choose to reveal. But I think "old wives' tales" was a trifle severe. Perhaps, I might put it this way. The Chancellor is better informed, but the professors are more objective. The Chancellor is counsel for the defence and the professors are expert witnesses, to be duly browbeaten, of course, by counsel. But, nevertheless, expert and impartial witnesses.

The truth is that the Chancellor, so it seemed to me, proved too much in his speech. First, like the magistrate in "Albert and the Lion' he gave the opinion that" no one was really to blame." He said that he had always been against convertibility, which he accepted" with very great reluctance." Then, on 8th July, he clearly thought that he had made arrangements to avoid any substantial dangers which convertibility might hold for us, because he told my right hon. Friend the Member for Warwick and Leamington (Mr. Eden): In a large measure, 15th July has already been discounted, and the additional burden of assuming these new obligations … will be noticeably less than many people may suppose."—[OFFICIAL REPORT, 8th July, 1947; Vol. 439, c. 2150.] Than who supposed? The Chancellor? The professors? The Opposition? The facts prove that the critics were right, and that the Chancellor was wrong, for the rate of drawings, which were running at 75 million dollars a week in June, rose to 115 million dollars a week in July, and 150 million dollars a week in August—twice the rate. By mid-August the game Was up. Surely, a rise of from 75 million dollars a week to 150 million dollars a week was a noticeable effect. It was a devastating effect. It has involved the blocking of the last 400 million dollars of the loan, and, which is not at all a pleasant thing even under duress, it has involved the breach of a solemn treaty obligation by His Majesty's Government.

Nevertheless, the Chancellor tells us that there has been no leakage, voluntary or involuntary. I observe, as Professor Robbins points out very accurately, that some £230 million of the dollar credit was, in effect, used for the repayment of capital or of block sterling, not upon current account at all. This was a voluntary leakage, but was it wise, or was it well timed? Why at this particular moment was it necessary to make these payments to India and elsewhere? If there was no other leakage, and everything else happened according to the plan, why did the drawings double? It was not because the planned expenditure of the Loan, about which I will have a word to say later, had arranged for twice the amount to be spent on dollar purchases during those particular weeks. Perhaps the answer is to be found in the Prime Minister's statement in the Debate on the first day of this Session. He said: The problem was very fully discussed … before we parted for the summer Adjournment. Since that Debate the world situation has deteriorated. Our own position has necessarily got worse with it. Indeed, the immediate effect of that Debate was to accentuate the dollar drain,"—[OFFICIAL REPORT, 21st October, 1947; Vol.443, c. 39.] I am not surprised. I remember the speeches that were made in that Debate by the Government side and I remember the Prime Minister's own speech. It seems that, by the Prime Minister's own admission, his observations caused an immediate flight from sterling.

There used to be a Defence Regulation against the spreading of alarm and despondency. I do not know whether it still stands, but the Prime Minister's speech calls it a dollar drain. Once we had a Prime Minister with whose every speech the prestige and glory of Britain rose like a star. But, however low the Government have brought the national prestige, this leakage ought not to have been possible. Convertibility was not supposed to apply except to current transactions. The rate of legitimate current transactions ought not to have been very different after 15th July–15th August from what it was immediately before or after. Why, then, did the rate of loss double within a month?' Clearly, the Chancellor did not expect that it would, hence his reply. He would not have given an untruthful reply, and on 8th July he clearly believed that watertight arrangements had been made by the nationalised Bank of England. By the way, there will be no bankers ramp for Ministers to climb out on this time.

I repeat, why did the rate rise from 75 million dollars to 150 million dollars? Either there was a fatal flaw in the so-called "gentlemen's agreements," or they were broken. Perhaps it was that foreigners were allowed to convert gross sterling earnings, instead of net sterling earnings, which was obviously intended. Was it, perhaps, because of that, or was it that they were allowed artificially to increase their sales and to decrease their purchases so that they were able to take advantage of the golden opportunity of getting out of sterling into dollars? In any case, the very words "dollar drain," which the Prime Minister used, and which Mr. Snyder, the Secretary of the United States Treasury, also used, assumes a free movement of funds such as used to exist in the old days. I repeat that in theory there can be no drain on capital account. There can only be a transfer of legitimate current earnings.

Therefore, I think the House and the nation are entitled to a clear and simple explanation. The facts are admitted. There is no doubt at all about the character of the transaction, and I say that we are entitled to a clear and simple balance sheet which would give us the answer in an understandable form. No one can say that such a balance sheet was presented in such a form in the Chancellor's speech last Friday. Apart from the issue as to how much of the dollar loan has been allowed to disappear without direct benefit to ourselves, the Chancellor defended at considerable length the use of the loan. He denied indignantly the statement that the loan had been squandered, and he tried to prove this by explaining the percentages of the different commodities that we had bought such as food, machinery, raw materials, tobacco, films and all the rest of it.

Of course, the dollars were not squandered in the sense that nothing was obtained for them. Nobody ever suggested that. They were used to purchase commodities, as the right hon. Gentleman described them. Nevertheless, they were not spent according to any proper plan. If a man with a certain income purchases to a far greater extent than his income a large number of things which are desirable in themselves, such as motor cars, books, pictures and so on, the mere fact that those things have a value does not acquit him of the charge of having misused and, in this sense, squandered his resources. He, as an individual, has committed the mistake which we, as a nation, have committed, of living beyond his means.

None of the agility of the Chancellor can explain two simple facts; first, why the loan, which was confidently expected to last five years, has run out in little more than one year; and, secondly, why at the end of the Chancellor's second year of administration of our finances, our position is so infinitely worse than it was at the end of the first year. There is another vital point, for these are very serious issues. Apart from dollar shortages and our unfavourable position in terms of cash transactions, what about stocks? What is our inventory position? Is there more or less in the industrial pipeline? To what extent have we been de-stocking? Moreover, what is the new position to be? Even now that we have got rid of convertibility, or it no longer runs, it appears that the adverse balance still runs at a devastating rate. It is apparently the policy of the Government to budget for a position in 14 months' time, when the total reserves of the whole sterling area will be reduced to £270 million. As "The Times" rightly observed: Such a figure might be contemplated as the outcome of an unforeseen emergency; as the calculated aim of a fourteen months' policy, it leaves no margin for miscalculations. We have had some experience of miscalculations. The truth is that the Chancellor's policy has been wrong throughout. His internal inflation and his unbalanced Budget have produced an unjustifiable complacency and a false sense of prosperity at home. The first stages of inflation are always more agreeable, like the first stage of any rake's progress. Experts disagree as to what should be the precise figure of capital investment. The Government have now decided to reduce the amount by £200 million per annum. But the totality of the amount directed to capital investment is not the only test. The chief test is its effectiveness, its qualitative value. It is selection, priority, allocation and a central plan which are required. In spite of all the talk about planning, there has been no central strategic plan at the centre. There has been continual tactical interference at the circumference with the whole of industry and commerce. The Government have spent two years at the wrong job. They have neglected their own job in order to interfere with everybody else's.

Before I leave the Chancellor's speech, I must make one observation about his attack upon Lord Woolton. With great and sensational emotion, the right hon. Gentleman brought all his heavy guns to bear upon the statement which Lord Woolton made at Stoke-on-Trent, in which he used the words, "days of over-full employment." This was answered in Monday's "Times" with his usual skill by my hon. and learned Friend the Member for the Combined English Universities (Mr. H. Strauss) who pointed out that the true and only begetter of these words was the Leader of the House of Commons, who used them at his Press conference on 20th August. If the Chancellor of the Exchequer had not been so anxious to convict my noble Friend, he would have been a little more cautious about his attack.

Of course, what both Lord Woolton and the right hon. Gentleman meant was this: While we all want to see a job for every man, We do not want to see such an inflationary state of affairs that there are three jobs waiting for every man. Indeed, the Government's own policy is to create artificial unemployment by withholding raw materials from certain non-vital industries. In that way, by the deliberate creation of unemployment, by making a pool of temporarily unemployed persons, it is hoped to man the more vital industries. Indeed, the old pressure of unemployment is going to be used to secure re-employment and re-deployment of the manpower and womanpower of the country.

In all these spheres of administration—and in these times administration is vastly more important than legislation—Ministers have failed, first as regards food, then fuel, then finance, and then the almost cynical mishandling of our Defence Services, on this side of the House we have always had an affection for the bluff and genial Minister of Defence, which has not been wholly dissipated even by the "piffle and poppycock" speech. Up to that day, or at any rate up to a certain day last spring, our affection was combined with respect. But we have not forgotten how the Socialist back-benchers called his bluff. He struck his flag within a few hours, in a most unsailorlike manner. As my right hon. Friend the Member for Woodford has just observed to me, he is more "Co-operative" than sailorlike.

The question of agriculture has also been discussed in this Debate, and I will only say a word or two upon it. As the Minister for Economic Affairs has told us, it is the most vital sphere of our national economy. He made a great appeal for increased agricultural output, but what has been happening during these last two years? Why is this appeal so delayed? Why is the target for 1950 for agriculture only equal to the achievement of 1944? The National Government produced results. The Socialist Government produce only targets. What has happened to the agricultural machinery? The allocation is to be increased for next year, but what happened last year and the year before? Why is it so late? Why has so much been shipped abroad? Certainly it has not gone to dollar countries. Do not tell me that we have been selling tractors to the United States. I cannot believe that. As the Minister points out in his speech: We must not waste our exports by sending them in large volume to markets from which we can get no immediate useful return. We cannot afford …to use them to pay off old debts or to accumulate inconvertible foreign currency."—[OFFICIAL REPORT, 23rd October, 1947; Vol. 443, c. 285.]

Is not that exactly what we have been doing with some of this agricultural machinery?

What about houses for the agricultural workers? What a scandal this story is. New houses for agricultural workers—not 2,000 in two years; only 1,800 new houses made available to agricultural workers. And as for the reconditioning of old houses, it has been stopped by pure political spite. Of all the melancholy stories, the story of the Hobhouse Report is, perhaps, one of the worst. Two years of procrastination and delay and nothing done. The truth is that, rather than see some possible value accrue—that is said to accrue—to a landlord, the Minister of Health would see the agricultural labourer go without his cottage. As for the Bill which we were promised in the King's Speech—oh, there is no time for that. There is not time for a Bill for the reconditioning of agricultural houses, but only time for a Bill for remodelling the House of Lords.

I turn to another question, that of the administration of Germany. Anybody who was present during the speech of the hon. Member for Attercliffe (Mr. J. Hynd) the other day witnessed one of the most extraordinary scenes that I have ever witnessed in this House. His speech was a condemnation both of his own administration for nearly two years and, by implication, of the Government to which he showed such unrequited loyalty.

In the legislative field, perhaps the fairest thing to say is that certain great experiments have been launched. The National Coal Board has a great, an enormous, an almost superhuman task. In my view, success will require a great deal of devolution and decentralisation, which seems not yet forthcoming. The psychological weaknesses of State capitalist monopoly are just as great as, if not greater than those of private monopoly. In the field of transport, as the right hon. Gentleman the Lord President of the Council reminded us yesterday, the experiment has not yet begun. The railways have a fine staff in all ranks; and I believe that, in spite of much heartburning, their sense of loyalty and tradition will be at the service of their new masters. But on the road side we cannot but feel that the new system is handicapped by a sense of deep injustice. The road hauliers feel that they have been beaten down and destroyed. They look for freedom in the future—and they will not look in vain.

What of future legislation? Apart from a large number of useful and largely un-controversial Bills, there are only two Bills which matter in the King's Speech—one of them because it is in, and the other because it is out. I refer to the Bill to amend the Parliament Act and to the Bill to secure the nationalisation of steel. Of course, the Prime Minister in his speech on the first day of the Debate did not exactly relate the two. He was much too high-minded for that. He told us in general terms—and I quote his words— There is ample justification therefore for taking precautions and not waiting until the trouble has actually arisen."—[OFFICIAL REPORT, 21st October, 1947; Vol. 443, c. 35.]

By the way, I wish he would follow his own advice on the great problems of the day. I am bound to say that I find this question of the House of Lords very confusing. What is the accusation against them? There is, it is agreed, no complaint against what they have done up till now. On the contrary, they have earned universal praise, both from Members of the House of Commons on the Socialist side and, more particularly, from the newly created Socialist peers. It is against what they may do. It is said that they may suddenly go berserk, or that Lord Salisbury may die. It is said they may delay the Bill to nationalise the steel industry; and, therefore, their delaying power must be reduced from two years to one. But the Bill to nationalise the steel industry has not yet been introduced. It will not be introduced in 1947. It will not be introduced in 1948. It may not even be introduced in 1949.

Who, then, is delaying the steel Bill? The House of Lords? Or certain members of the Government? And why do they delay it? Why have they vetoed this Bill a year themselves? Well, of course, for the very good reason that they know, and the new Minister of Supply knows, and the Minister for Economic Affairs knows, that the industry is operating at the highest degree of efficiency.

It is not the fault of the industry if a gross miscalculation as to allocations has been made of 2,000,000 tons. That is not the industry's fault, but the fault of the people who are running the allocations. In spite of the coal hold up it has reached an output at the rate of 14,200,000 tons per annum; which is a record, or practically a record. As to prices—because prices are a good mark of efficiency—where coal has risen from an index figure of 100 in 1938 to 216 today, and general manufactured commodities to 202, in the case of steel the rise has been to a figure of only 158. The Government, therefore, know that to nationalise steel would be an act of criminal folly. It would be too much even for them—except, of course, for the Minister of Health, who differs from his colleagues, and accuses the managers of the steel industry of having betrayed the nation's interests.

The Minister of Health (Mr. Aneurin Bevan)

When?

Mr. Macmillan

At Hull. "Betrayed the nation's need." I have the quotation.

Mr. Bevan

The right hon. Gentleman is as inaccurate as usual. Will he quote the words in which I said "the managers in the industry"?

Mr. Macmillan

Of course, if the right hon. Gentleman withdraws them—

Hon. Members

No.

Mr. Bevan

It is altogether too disingenuous. Will the right hon. Gentleman quote the words in which I said "managers of the steel industry"?

Mr. Macmillan

I understand that in the quotation of a speech—[HON. MEMBERS:" Withdraw."] The right hon. Gentleman was reported in the Press [HON. MEMBERS: "Ah!"]—I regret I have not the cutting—as having said that the people who have been running the steel industry had betrayed the nation's needs. Is that right? "The people who have been running the industry have betrayed the needs of the nation."

Mr. Bevan

The right hon. Gentleman in a few minutes has already changed the original quotation. His first statement was that I said—

Mr. Churchill (Woodford)

What did the Minister of Health say?

Mr. Bevan

I know the right hon. Gentleman wants me to make his speech for him.

Mr. Quintin Hogg (Oxford)

Why does not the Minister of Health tell us?

Mr. Speaker

There is so much noise on both sides of the House that I do not know what anybody is trying to say.

Mr. Bevan

I merely wish the right hon. Gentleman—which is customary in this House—to quote his authority. Why should I make the right hon. Gentleman's speech for him? Let the right hon. Gentleman give his quotation.

Mr. Hogg

Let the Minister of Health tell us what he said.

Mr. Macmillan

Both the right hon. Gentleman and myself have some experience of this House. Since he challenges me I must frankly admit I am not armed with the precise words. I, therefore, withdraw the remark. But I shall look up carefully the quotation from which I had drawn only a few phrases—I have not the whole thing with me now—and in a proper way I shall certainly publish again what he did say—and I do not think that there will be very much difference in the broad meaning.

Suppose the Government do finally introduce a steel Bill. Why, what then? Why then, it is argued, the most terrible tragedy may happen, because the House of Lords, it is said, may so delay the Bill that it may not be passed before a General Election. But would this be very bad? "Oh yes, very bad," it is said. But why? "Why? Because the Socialists might lose the Election, and then steel would not be nationalised." But would not that be the will of the people? "Oh no," reply the Socialists. "You do not understand how the thing works. When the people vote Socialist, that is the will of the people prevailing and triumphing; but when they vote Conservative, it is the triumph of the forces of reaction." What hypocrisy! What absurdity! The truth of the matter is, hon. Members opposite know that the House of Lords controversy has been revived for reasons of pure political tactics. In the first place, it is a convenient, if rather stale, red herring to distract public attention from the Government's mishandling of affairs. Secondly, as my right hon. Friend said yesterday, it is an act of appeasement towards the Minister of Health. It is a squalid deal between Ministers whose relations with each other remain consistently unfriendly. For all these reasons I confidently ask the House to support this Amendment.

I notice that some observations which I permitted myself to make outside have incurred the censure of the "Daily Herald." Fortunately, I am in good company, because I shared the pillory with the Primate of All England. Continuing this line of criticism, I was challenged in Debate the other day by an hon. Member for whom I have a great respect, since he defeated me at Stockton-on-Tees, who asked me last Friday—and it was a very fair question—whether I really wanted to see us surmount this crisis or to see the Government go down. The answer is that I passionately want to see both, and I firmly believe that the first is impossible without the second. The right hon. and learned Gentleman the Minister for Economic Affairs made a fine appeal on Thursday. What did he say? He said: … let no man stand in our way."—[OFFICIAL REPORT, 23rd October, 1947; Vol. 443, c. 293.] In all sincerity, I make him this reply: Alas! His friends and colleagues stand in his way by their feeble and faulty administration, by their persistent preaching of the class war, by their malicious attacks on ownership and management, and by their ceaseless taunts against those very industries upon which they know we must depend; and now, most foolish and reprehensible of all, when, to use the right hon. and learned Gentleman's own moving words, democracy and Western civilisation are at stake, by their decision, for purely partisan reasons—and the Prime Minister knows it—to prepare the lists, unprovoked as he admits, and unchallenged as he admits, for a bitter and useless constitutional struggle which cannot unite but which must divide our people. I say to him in all seriousness, and I say to hon. and right hon. Members opposite in all seriousness: Let the Government no longer stand in the way of the people.

several non. Members

rose——

Mr. Speaker

Mr. Arthur Greenwood.

Mr. H. Macmillan

Perhaps I might interrupt, Mr. Speaker, in order to make myself perfectly clear, to the Minister of Health. I have just obtained his exact words as quoted in the "Yorkshire Post" on 18th October, in a report of a speech he made at Hull. He said: We will not leave the industry in the hands of those who have betrayed the nations needs and cannot be trusted to develop the industry to the extent required by our necessities.

Mr. Bevan

That is not the managers.

Mr. Churchill

In view of the disturbance which arose in the House just now, will the right hon. Gentleman say whether that is an accurate quotation or not?

Mr. Bevan

Certainly, but it is the owners, not the managers.

Mr. Macmillan

I cannot allow the right hon. Gentleman to ride out on that. If he says the words "the hands of those" does not include management as well as ownership, then I do not know what it does mean.

4.37 p.m.

Mr. Arthur Greenwood (Wakefield)

If the altercation has now come to an end perhaps I might begin what I was about to say. I cannot, of course, emulate the polished oratory of the right hon. Member for Bromley (Mr. H. Macmillan), or his carefully chosen words, and I do not propose to do so. Nor do I propose to deal with this situation in that spirit of levity which he showed during various parts of his speech. The more I listen to Conservative back-benchers and Front Benchers the more bewildered I become. The complaint of the right hon. Member the Leader of the Opposition—whose speech yesterday interested and amused me—was that we had a plan. The Leader of the Opposition does not like plans. He likes a nice, juicy freedom going back to the Middle Ages, when every man worked his own will and the devil took the hindmost. What does his master's voice say today? The right hon. Member for Bromley complained that there was "no central strategic plan at the centre." Well, I never knew where else a central plan could be. I never thought it could be at the periphery. Central strategic plan at the centre! That is high-powered planning, that is; that is super-planning.

Who speaks the voice of the Tory Party? Its leader or those apostles of his who speak their own gospels? At one time the right hon. Member for Bromley was himself a planner. This afternoon he went out of his way to pour balm on his leader by describing him as one of the greatest men in the world. That was certainly implied, and in some respects I would admit the claims of the right hon. Gentleman.

Mr. Osborne (Louth)

In all respects.

Mr. Greenwood

This afternoon what I shall challenge is the right of the present Leader of the Opposition to any place in the making of the future, because I do not think he understands what it is all about. We had from the Leader of the Opposition yesterday, and again today, anathema upon anathema. We have had nothing from the intellectual forces opposite—such as they are—of any constructive kind whatever. I shall revert to that in a moment.

Here, I should like to say something about the programme for this third Session of Parliament. The first two Sessions have been hard; and I take my responsibility for some of the hardnesses that there were during those two Sessions. I think it is right, if we can, to lighten the burden somewhat in the third Session. I am not a reformed character in this matter. I held this view during the second Session. When one looks at the programme for this Session—and the right hon. Gentleman the Member for Bromley admitted that most of it was non-controversial, which is broadly true—one sees elements in it which could not be opposed by either side of the House. It might have been thought, six or eight months ago, that one of the most hotly contested and bitterly fought Bills would have been a Bill about India. Thank God that Bill is no longer necessary. The India Act was passed in the second Session, and if there is honesty of purpose and real patriotism on the other side of the House, then the Burma and Ceylon Bills will follow the same course. [Interruption.] Had the Leader of the Opposition been Prime Minister, he would have avoided bloodshed at the cannon's mouth. Instead of one little corner in the North of India being disturbed and troublesome, the whole of India would today have been in flames. The argument I am putting is that the India Act having reached the Statute Book without any serious challenge from the other side, the Burma and Ceylon Bills should follow the same course.

On the home front we shall see, after 40 years of propaganda and toil on the part of some of us, the end of the Poor Law system. I was very glad that my hon. Friend the Member for Houghton-le-Spring (Mr. Blyton), in moving the Address in reply to the King's Speech, paid attention to the great changes which have taken place. I, personally, shall feel a very proud man, because I have been interested in this question for a long time, as some of my Northern colleagues know. I shall welcome the obliteration from the Statute Book of the horrors of the Poor Law system. Are the Opposition going to oppose that? No, they dare not do that. They cannot oppose the rectification of the charges between the local authorities and the State, although there may be certain things which will cause a serious difference of opinion.

I am sure I shall not make a speech which will receive universal approval from all quarters. There is a nationalisation Bill included in the programme to deal with gas. I was in favour of that earlier in the year, but I changed my mind later in the Session. I would have preferred to see iron and steel in the programme, for reasons which hon. Members opposite will not appreciate. The right hon. Gentleman has no right to say, as he said today, that it is not going to be done. My right hon. Friend the Prime Minister, in his opening speech this Session, pledged this Parliament to deal with iron and steel in accordance with the policy of my party, and that undertaking I accept without reservation. I say, however, that in my view now—and I admit I have changed my opinion; it is not a crime if a man sincerely and honestly changes his opinion—it would have been wiser to have taken iron and steel.

The right hon. Gentleman has said that output is high, and there was a rumour that if we started playing with this industry there would be great perturbation of mind, unsettlement and so on, but I would point out that this policy has been known since the last General Election. We have raised hopes among hon. Members on this side, and fears in the minds of hon. Members opposite, but this year doubts have arisen on this side because it was felt that our undertakings were not going to be fulfilled. I came to the conclusion—and I am speaking for myself—that the wiser course would have been to have faced the problem this Session and to have got the row over. I do not believe that the House of Lords will turn down the gas Bill. But, there is to be another Measure. I am no lover of the House of Lords. I can see no place for hereditary peers in the middle of the 20th century. Had the steel Bill been introduced this Session, the need for the use of the Parliament Act-as it was passed might have arisen, but no need would have arisen for tinkering with it. I am expressing a purely personal view, and my right hon. Friends on the Government Front Bench will, of course, disagree with me. I regard this as a very doubtful political expedient on which we are entering this Session, for reasons entirely different from those of right hon. Gentlemen opposite.

We heard statements about the economic crisis made yesterday and today by Members opposite. They have to make up their minds whether or not there is an economic crisis. Their speeches vary. Sometimes it is a grave economic crisis, sometimes it is a manufactured thing, and sometimes it is supposed to have been created almost deliberately by the Prime Minister and his colleagues. I wish they would make up their minds. There is a Member of the House of Lords who used to be a Member of the House of Commons of whom it was said he had one foot in the Middle Ages and the other in the League of Nations, but the speech of the Leader of the Opposition showed that he had one foot in the United States and the other in the Dark Ages. Although his right hon. Friend has tried today to impress on the House that the Government lack plans, he still in his heart of hearts sticks to his plan, while his great warrior and great leader does not want anything of the kind. After the speech of the Leader of the Opposition yesterday, the real slogan of the Tory Party is "Back to Orpingtonism", whether they are to be Buff Orpingtons, I do not know, not being a poultry expert. I heard it said yesterday that the hon. Member for Orpington (Sir W. Smithers) was the master of the Tories, and someone said in my hearing that there were now two because the Leader of the Opposition had joined him. It is a sad end to a party which claims to have been a great factor in our national life.

I remember sitting in this Chamber, on the opposite side of the House, when the present Leader of the Opposition was Prime Minister, and we were discussing a Motion about the rebuilding of our old Chamber. The right hon. Gentleman spoke passionately in favour of the rectangular Chamber. I can see him now as he described how, in semi-circular Chambers, men went from loyalty to loyalty day by day; how he himself had gone across the Floor more often than any other Member of the House. I agreed with the rectangular Chamber because of the advantage to the two-party system. I earned the deep and almost undying hatred of what was left of the Liberal Party. My old friend, Sir Percy Harris, almost died of a bleeding heart. I still stand by what I said then, that when there is a thunderstorm, a crisis, men and women in this House must make up their minds as to which umbrella they are sheltering under. If the Liberal Party want a little parasol of their own they can have it, but I am talking by and large. This defence of the rectangular Chamber is a serious part of my argument. It supports my view that the strength of democracy in this country is based on the two-party system. I admit that we were usurpers at that time. What is left of the other party can be discarded; I can apply to them that tragic phrase, "displaced persons." The truth is that in this country we have, in the active life of the nation, whether national or local, whether it be in industry, commerce, or anything else, two types of character—the adventurous, who will march and take chances, and the cautious who will say, "Thus far and no farther." At that time I did not call them reactionaries, but now that the war is over, and we can speak more freely, I can say that that is what I meant.

What have the Opposition, those cautious, timid, cowardly men, to offer this country and the world? Nothing, except a return to the dark, bad, and bitter past. I have never heard any constructive proposals from them. On the contrary, I have seen peeping out from speech after speech the old Tory remedy for every economic crisis—economies at the expense of the poor. It has always been, Economise." If that is a constructive proposal then God forgive them. The right hon. Member for Woodford, in a speech, he made at Brighton, said he had no policy at that moment, but that when the time came for him to put one forward—if he ever does—he will have something. He has a jack in the box. Why not release the spring? Let us have a look at it. The box is empty or the jack in the box has lost its spring. The Opposition cannot have a policy; their roots are so deep in the past that they cannot now see the sunlight in the air. Every speech they have made has hinted at economies in our social expenditure in all directions. They cannot offer anything else. They do not understand that they are living in a changing world. This is a changing world. The world is going through bitterness and trial now. This country has been going through a social revolution during the past two years, a revolution not yet completed, and one which must still be pursued. The one constructive line of activity today is that of social democracy. There is no other. The old system is outworn; it is dead. It cannot be revived. The only thing that could possibly take its place would be something infinitely worse, something Fascist inspired.

We are marching now towards social democracy. As many of my hon. Friends know, these two words mean a great deal to me. This is to be the justification for victory in the war. The second world war was not fought against totalitarianism. It was fought by our enemies against social democracy on the Continent, and if we are to justify victory now, if we are to vindicate ourselves for the sacrifices we made, then we must for ever extirpate from our economic and political life every vestige of totalitarianism. That we can only do by this approach to social democracy. We have travelled, in a generation, a very long way and we shall travel a good deal further yet. Social democracy, deepened in its purpose because of our victory against hell during the war, fortified by a richer experience, will, I am certain, march forward. I say to the House that we must choose between chaos or social democracy. Either way will be hard; one way will be ruin. Social democracy will be the final victory.

4.58 p.m.

Lady Megan Lloyd George (Anglesey)

The House has just listened to a characteristic speech from the right hon. Gentleman the Member for Wakefield (Mr. Arthur Greenwood), for whom Members of all parties have a high regard and respect. The right hon. Gentleman the Member for Bromley (Mr. H. Macmillan) began his speech by saying that no Government had started off, with a greater amount of good will than the present Government. I think that is true, but I would like to remind the right hon. Gentleman that the measure of the good will of his party was shown by the fact that they moved a Vote of Censure within a short time of the Government coming into Office. They expected the Government to solve the immense postwar problems not in two years but in a few months.

Twice in the last six months this House has been asked to give a Vote of Confidence in the Government, and twice we have been assured by the Government and their supporters that their policy was adequate to meet the economic emergency. Yet each time that Vote of Confidence has been followed by a further and graver crisis. Each time the Government have been forced to acknowledge the inadequacy of their policy by producing another one. Tonight we shall be asked to vote once again, to express our confidence in the Government. Unfortunately, we can only judge them by their record. It is true that the Minister for Economic Affairs made a courageous and impressive speech in the Debate last week, and that it received a considerable measure of approval from men and women of good will in all parts of the House and in the country. But the right hon. and learned Gentleman has made many good speeches before. Indeed, he has been making good speeches all through this Parliament. I wish one could say the same about all his colleagues all the time.

But up to now there has been a wide gap, a gap as wide as our balance of payments, between the speeches of Ministers and the policy carried out by the Government. I will only quote two instances, among a great many. Two years ago, barely three months after the Election, the Chancellor of the Exchequer said that we must save dollars to the utmost. He was quite right. He also said that we must cut down, without any delay, all imports which required dollar expenditure, and yet, in the two years following that speech, the Government allowed the tillage acreage of this country to fall by approximately one million acres. Here is another instance which I would like to quote. The Chancellor has never ceased, quite rightly, to point to the dangers of inflationary tendencies, and the right hon. Gentleman the Minister for Economic Affairs said in his speech on the White Paper in March: We cannot afford increases in wage levels-or shorter hours unless they increase productivity per man year."—[OFFICIAL REPORT, 10th March, 1947; Vol. 434, c. 994.] Yet shorter hours have been introduced. In the five months following that speech. wage increases had been granted to 21 industries, affecting over two million workers; many of them, no doubt, thoroughly justified, many of them, no doubt, overdue, and many of them, no doubt, remedying genuine grievances, but as the right hon. and learned Member for Montgomery (Mr. C. Davies) has pointed out again and again in this House, this is not the way to stop the inflationary tendency, it is another example of the vast gap which exists between the speeches of the Government and their policy.

It will be said that everything is changed now. The right. hon and learned Gentleman the Minister for Economic Affairs is in a very much stronger position. He has greater powers. The test of the new Ministerial set-up will still be whether he is to be allowed to carry out the purpose and intentions of the speech which he made last week. That is the acid test. The right hon. and learned Gentleman pins his faith, and has always pinned his faith, to increasing exports at the temporary expense of the home market. He has always put his shirt on the export market, and, as far as I can see, he is going to put everyone else's as well. The Government have set a very high export target. They are asking industry, employers and workers to work harder and export more, but are they creating the conditions in which they can achieve that target? We are going to be faced with great difficulty in achieving that target. Every country in the world is doing, or trying to do, what we are trying to do—that is to export a great deal more and import a great deal less.

The British exporters are meeting very great difficulties. Are they to get assistance from the Government? I would like to quote some of the difficulties they are meeting. They may be successful in securing orders but their actual shipments are limited to a fragment of those orders because they are unable to obtain import licences. I have an instance here of an engineering firm, and there are many other instances, where their orders are halved, for this reason. We hope that the Government will press on with multilateral and bilateral—[Interruption.] I mean import licences from other countries. My argument is that I hope that the Government will press on with multilateral, certainly, but with bilateral agreements as well, on currency and trade so as to facilitate the position of the exporters. May I say that we on these benches welcomed the statement made at Question time today by the President of the Board of Trade in which he announced a reduction of tariffs between a number of countries. We only hope when the details are made known that the agreement will thoroughly justify our expectations. We also hope it is only a first instalment and will be followed up vigorously by the Government.

I would like to say a word about the other side of the Government's policy, the cut in imports, and, particularly, about the greatest single item of our dollar bill—food. The Government have announced a programme, a very large programme, which is designed to bring about a saving of food imports up to £100 million. That is a long-term programme, but as the Government have made it clear, this is a long-term depression. I would ask the same question here: Are the Government going to provide the farmers and agriculturalists of this country with the means to carry out that policy or is it to remain only a paper policy? The farmers, as my right hon. Friend the Member for Bromley pointed out earlier in his speech, need tractors, and yet last year the Government allowed £4 million worth of tractors to be exported from this country. I am informed that tractors are still being exported, not in such large numbers, but they are still being exported while the home market is unsatisfied. There is also a shortage of spare parts, which means that many tractors already in the possession of farmers are completely immobilised and useless for lack of these spare parts, and have been immobilised for months. There is a need for fertilisers, particularly potash. I am informed that factories in Germany processing potash are to be dismantled. I hope that this is not the case. I should be grateful before the end of the Debate for an assurance on that point, because it is very important.

Are the farmers to have priority for the essential equipment of their industry? They need labour and they will not be able to carry out this policy unless they get it. A hundred and thirty thousand prisoners of war are to be repatriated, and we are very glad about it, but they are to be repatriated by the next harvest. Who is to replace them, and where are they to live? They are not going to be housed in camps as the prisoners of war were. Twenty-three thousand houses have been completed in the rural areas and yet, as the right hon. Gentleman pointed out, only about 1,800 have been let so far to agricultural workers. I would like to know, and I hope that we shall get information on this point, how many of the 350,000 houses now being built will, in fact, be let to agricultural workers and, in addition, what is to be the programme of special priority houses for letting to agricultural workers?

Mr. Bevan

Does the hon. Lady mean agricultural workers in the agricultural industry or the mechanics as well?

Lady Megan Lloyd George

I mean the agricultural worker or the worker in any trade ancillary or essential to agriculture.

Mr. Bevan

Then the figures which the hon. Lady has given are false figures because they only relate to agricultural workers working on the land.

Lady Megan Lloyd George

I am glad to hear that, but they are all absolutely essential to agriculture. I am only anxious to find out whether these people who are essential to the working of this great plan which is put forward by the Government are to be given houses. These are really not trivial details. All these things make the difference between the failure or success of this vital policy for the cutting down of imports. After all, we are dealing with the most effective way of saving dollar imports.

I should like to say a word about the proposal of the Government with regard to the House of Lords. Great indignation has been expressed in many quarters that the Government should choose this moment to amend the Parliament Act of 1911. It is said that it is not necessary, I think the Leader of the Opposition called it an act of social aggression. If I may so so, that description would be far more justly applied to the proposals of 1911 of which the right hon. Gentleman himself was a sponsor. This is a milk and water, an anaemic proposal by the Government, and I should have thought its very tameness would have been shocking to such a full-blooded revolutionary as was the right hon. Gentleman the Leader of the Opposition. The truth is that the right hon. Gentleman is looking at this question from the other side of the barricades this time, and his judgment is naturally influenced by that. We have been asked why do this thing now? There has been no conflict for 30 years. There has been no cause for a conflict. With the exception of two short periods and the Coalition Governments of the two wars, there have been Conservative Governments in this country, and the House of Lords has only been asked to pass Conservative legislation. There was no virtue in that. The truth is that for 30 years we have had in this country two Houses with a single reactionary purpose. That is the real truth of the matter.

But hon. and right hon. Gentlemen above the Gangway say, "Look how exemplary has been the behaviour of the House of Lords in the last two trying years; they have passed the Transport Bill and the Coal Nationalisation Bill with hardly a groan. Of course, because they knew perfectly well that whatever they did, those two Bills would become law by the automatic working of the Parliament Act and their only power, therefore, was to delay the operation of those two Acts over two sessions. But what is going to happen next year when their veto becomes operative? That is the question. What guarantee has the Government that they will not use their veto? Of course nobody can guarantee such immunity, not even the Leader of the Opposition. I believe myself that no Government, placed as the present Government are placed, would be wise to take that risk. If the good behaviour of the Lords is going to continue as hon. and right hon. Gentlemen have implied, why then this opposition to the extension of the Parliament Act? Why stir up all this trouble? Why foster disunity if the Lords are going to behave in the exemplary manner they have already done? To me—and I may say that this is not an hereditary view although it would be all the better if it were—it is not a question of whether one agrees with the nationalisation of iron and steel. To my mind that has nothing to do with it. The issue today is the same as the issue was in 1911, whether a totally unrepresentative Chamber is going to be permitted to frustrate the will of the elected representatives of the people.

Finally there are some who say that this is a political irrelevancy at this time. Perhaps in this connection I may be permitted to make one quotation from a speech made in 1911 by the Chancellor of the Exchequer of the day. He was referring to the Liberal Government, but it applies equally in my mind to a Socialist Government. He said: If the peers rejected their Measures or mutilated them, they were not fighting the Liberal Party, they were making a mockery of free institutions. I believe that that is equally true today, and I believe that such a thing cannot be called political irrelevancy at any time in a democratic country. If I may say so, there is a very much deeper and more potent cause of disunity in this country, and that is the class antagonism which sometimes unfortunately is fostered by members on both sides of the House, and particularly unfortunately by some Ministers. The worst of the offenders has now been confined to barracks. Yesterday it was clear that war had been declared also from the benches above the Gangway. Yesterday Marlborough went to war—the party war—and although the Leader of the Opposition ended up with a stirring appeal for national unity, yet he spent the greater part of his speech in beating the Tory drum as only he can beat the drum. I think that here are far more potent causes of national disunity. I regret it, because I myself believe that the people of this country, exhausted though they are by six years of war, discouraged by rationing and by the prospect of long austerity, if they are united, can show the world that they are still capable of doing what they did during the war, and of showing that endurance and that courage that alone will bring us through the economic crisis.

5.18 p.m.

Mr. Parkin (Stroud)

It has been a great pleasure to listen to the speech by the hon. Lady the Member for Anglesey (Lady Megan Lloyd George). It is indeed refreshing to listen to a speech from the benches opposite which is really concerned with present-day policies and with the job we have to do now and in the future. After all, we are supposed to be discussing the problems indicated in the Gracious Speech for the next 12 months, and up to now, from the benches "opposite above the Gangway, we have listened to a series of petulant criticisms of what went on last year or the year before or just before the Election. One has the impression that hon. Members opposite enjoyed themselves during the Recess working up a speech which got better and better each time they delivered it and they really must make it now in the House before it is too late. At the same time, they have lost touch with the situation in the country, because, although the economic situation is so grave and although the people of this country will suffer worse things in the material sense before this winter is out, yet there is amongst the workers of the country the beginning of a feeling that they are understanding what is required of them and can beat the difficulties ahead because now they see the way out. It is only now that the Government have got somewhere, in an overall project for industry, which can be understood by the country as a whole in relation to our export needs, so that we can get down to the details and put a target ahead of the ordinary workers in the country.

It is about one aspect of the improvement in the situation that I wish to speak. I wish to refer to the prospects of improved trade relations with Eastern Europe, with those countries of Socialist reconstruction who are beginning to see the results of their efforts in the last two years, the benefits of getting their devastated lands back into cultivation, and the benefits of their own planning systems. The importance to the future of this Government of improved relations, particularly improved trade relations, with those countries is very clearly understood by the Opposition. In fact, the right hon. Gentleman the Member for Warwick and Leamington (Mr. Eden) paid a delicate tribute to their importance by introducing into the early part of his speech an attack on those hon. Members of our party who went to Eastern Europe. I thought it was a gentlemanly thing on his part to rush in to the defence of the Government in spite of the fact that his own reputation still bears the scars of the attacks made by members of the present Government on him as Foreign Secretary when they were in Spain. In spite of this recollection, he rushes in to invent an entirely new constitutional doctrine—that no one must criticise the Government from outside the country. He need not have troubled himself.

I am sure that my colleagues and Friends on this side of the House do not need to be reassured that the party which travelled around Eastern Europe did not spend its time attacking the Government. It is a monstrous suggestion to imply that anything of the kind was done. On the contrary, we had the opportunity to explain to the people there a good many things which have been left unexplained in the last two years. We explained a few things about the nature and structure of the Labour Movement which seemed in some cases to put us in a rather different light to them, an explanation which might well be studied by the Opposition were it not that it would have a very depressing effect on them. We had to explain that the Labour Movement is not like many Social Democratic parties on the Continent, a tightly-disciplined party with a political philosophy within narrow limits, but a movement containing all elements in the working classes, Marxist and non-Marxists, right-wing and left-wing, Co-operatives, vegetarians and trade unionists. We even have a few members who present Tory criticism in a purposeful and cogent way because of the inadequacies of the Opposition when it comes to a Debate like this. We represent something similar to the National Front which the countries in Eastern Europe have formed to carry out their own plan.

For the same reason, the Labour movement will never split. It is necessary sometimes to explain that, although we have differences of opinion, we never carry them to the length of splitting because it is understood before we start that there are differences of opinion. If high hopes are sometimes entertained by the Opposition that a word of criticism here and there is the beginning of disaster to the Labour movement, one can only remind them of the words of King Charles II to his brother: They will never get rid of me to make you King, James. That was a comforting explanation to some of our friends in Eastern Europe.

Of the trade treaties which are in course of negotiation, I propose to say very little because one does not wish to make any remarks which might upset negotiations while they are in progress, but one or two things need to be said. First, with regard to the agreement with the Soviet Union which is the largest and most important of the agreements at which we ought to aim and which we ought very shortly to secure. It is obvious that both Governments seriously and earnestly wanted a trade agreement. Therefore, when examining the reasons why the negotiations were broken, one is driven to the conclusion that one side doubted the ability or the goodwill of the other really to carry an agreement to its conclusion. Therefore if the negotiations are to be reopened, one side must not merely indicate willingness to reopen negotiations but must lay down specific proposals upon which they can be reopened.

The second point is that there is no doubt that we have not been able to convince the other side that we could deliver the goods they want in return for food and raw materials. That is unfortunate. They have a wrong view of the situation, and it requires re-presenting to them. Not only the Soviet Union but also Yugoslavia have had unfortunate experiences over the question of guarantees. In view of the way things are run in this country, we have obviously not a State bulk buying and selling organisation for the export trade, and therefore we need to assure the negotiators on the other side that commitments will be fulfilled. I should have thought it would have helped the Government in their industrial policy at home to take on certain obligations as targets to present to the trade unions and industries. I should have thought that it would have helped a good deal on a subject such as steel rails or timber-cutting machinery—some of which is made in my constituency, and the Russians would be very glad to receive it—if one could say to the industry concerned, "It is up to you to reach a certain target. We have committed ourselves on your behalf to reach it. If you can reach it or exceed it, so much the better because there is more to be bought with the produce of your labour." It would have helped a good deal in carrying out what I referred to as the implementation in detail of the overall plans now set out by the Government if one could quote specific trade treaties of this kind.

It is a little unfortunate that when negotiators come to this country to inquire what they may buy in exchange for what they sell, they are sometimes turned loose in the countryside, and told "You can go round the factories and look for yourselves." Today industrialists have very full order books. They all think they are made for life and that if only the Government were to disappear they could get enormous quantities of raw materials and carry out the orders they have on their books. In fact those order books are largely bogus because they are duplicated. At the first breath of a depression, the whole thing will collapse and they will be searching for orders. At the moment they are liable to take a weary line with people knocking at the door and suggesting further business. It would be better if the Government played a more vigorous role in arranging co-ordinated deliveries of certain articles.

I want to say no more about negotiations for trade treaties which may be in progress, but I suggest that as a result of what our little group has been seeing and hearing in the last few weeks these targets to be held up in front of our people as incentives can be progressive and augmented. For instance, in Yugoslavia my hon. Friend the Member for Horn-church (Mr. Bing) has suddenly made himself an expert on the statistics of tobacco growing and smoking, and he made a large number of inquiries about Yugoslav tobacco which proved quite an attractive proposition to the Ministers who talked to us about it. Indeed, Marshal Tito himself expressed a special interest in our suggestion that there would be a great future for Yugoslav tobacco, if it could be grown from the type of plant which people in this country like to smoke. I do not want to talk about that as an element in the existing negotiations, for I have no means of knowing whether tobacco is one of the subjects now being discussed, but I think it can be held before the people of this country as a possible extra.

It could be explained that if certain industries produce more than the target, there is an immediate and attractive reward in the way of a fresh import that we can afford. Going to the northern part of the Continent one had similar discussion with Mr. Hilary Mine, the Minister for Industry in Poland, who was talking about the great improvement in agricultural production in his country. He talked rather proudly of the rapid increase in the pig and poultry population. We know we want maize from somewhere else to increase our own pig and poultry population, and I am sure the Government will do all in their power to get that maize which we know now to be surplus. At the same time we can get still more from Poland in addition to the trade agreement which has already been made, for it is clear that, if they are offered deliveries of machinery and of the equipment they need, the Poles are prepared to forego the consumption themselves of this agricultural surplus and will sell it to us.

If we can hold up in front of the people in this country these targets—so much we have now got for bare existence; the next 10 per cent. means bacon and eggs back on the breakfast table; the next 5 per cent. tobacco and other attractive luxuries from overseas—I am sure it would help the Government in the implementation of these enormous tasks which the Minister for Economic Affairs was expounding to us the other day. He has had the duty in the last 12 months of talking again and again in vast global figures which are practically incomprehensible to ordinary people. They do not in themselves provide an incentive; in fact, sometimes he said, "This is not even a target. It is a statement of what we should have to do if we were to meet our obligations." Broken down into targets, industry by industry, that begins to make sense. Broken down into targets, industry by industry, the Minister for Economic Affairs can get over that unfortunate attitude which I detected the other day that this was democracy on the defence, and get back into the enthusiasm which he himself engendered and observed when he used to go round the factories as Minister of Aircraft Production during the war.

Of course the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) who is so amused by that remark, just would not know what it meant. That is where the real barrier lies in the House. It is a sort of emotional barrier which is quite insurmountable from that side, and I do not think that hon. Members opposite are capable of understanding that the Minister for Economic Affairs can go into a factory canteen at lunch time, address the workers as "comrades," and get an emotional response which brings that increase in production, energy and devotion which will solve our problems. I know it is a thing which, with their point of view, they will never understand but, at the same time, it is so easy from our point of view to get this extra 10 per cent. of enthusiasm and energy from the workers if they know what the target is, and how to go to it.

The Minister for Economic Affairs said that these targets and projects had to be understood right the way down to the factory and workshop level. He has put a lot of time into getting the rather intellectual acceptance of managements on the other side of the cold facts of the situation. Now that has to be translated into an emotional acceptance and enthusiasm on the part of the only people who can produce the goods, those who get their hands dirty. He has spoken several times also about the importance of works councils, joint production committees and so on. That is not democracy on the defence; that is, as the Lord President said, democracy on the march, and that is why, in spite of the meagre material prospects before us in the next few months the Labour movement, as a whole, is gaining courage rather than losing it, and gaining enthusiasm rather than losing it, because we can begin to see our way through.

There is one thing I will touch on before I sit down—these curious rumours about food subsidies. It has been suggested that the Government have been considering removing the subsidies on food. That has not been confirmed or denied, but it is important to point out that if we are really to get this democracy of workshop level working towards targets which can be understood; if we are really to get an enthusiasm for working overtime, for removing restrictive practices, for exceeding norms of output, breaking targets, and so on, we must start with stability at the bottom, we must start with stability of the wage structure. If we are to have a wages policy, we must have a profits policy, we must have some willingness from the other side to enter into an agreement that if there is stability on the one hand, there will be stability on the other. It would be more attractive to us if works councils and joint production committees could have, by law, the right of access to all the information about the accounts of the projects and plans of the firms for which they work.

With good will, however, the same results can very frequently be obtained. I have known them obtained by managements declaring at annual shareholders meetings that they do not intend to pay more than a certain percentage on the shares, so that people who want to speculate in them can take that as a tip and leave them alone; by saying that it is their intention over the next period of years to pay everything above that into re-equipment, expansion and improvement. That helps the morale of the workers a great deal. I have known firms who have explained the balance-sheets honestly to their works councils. That helped a great deal. If there can be assurance, there is no objection to high earnings on the part of technicians or managements. We in this movement have no objection to high earnings; what we object to is that the extra efforts of workers and of managements should be dissipated in inflationary payments to people who merely own shares and have not been near the factory for years. Let the high earnings be paid to managements for good results by all means, and let incentives be given to the workers. However this basic stability of wage structure, if the worker is to accept it, cannot be monkeyed about with by the Chancellor of the Exchequer by the sudden imposition of a poll tax.

If the Government are thinking that the standard of life cannot be maintained over the next six months or so, they ought to say so frankly. If they are going to "do a 1931" they ought to do it properly, and not in an underhand way. If they have not the courage to go ahead and get this extra production, which will fill this gap by the methods I have suggested, and if they really feel there must be a deflationary Measure, let them be honest and not suddenly impose this poll tax on the people, this sudden abolition of the same amount for all classes through the food subsidy. It must be remembered that there are many industries in this country where the average wage is less than £6 a week. There are some where it is less than £5, but I do not want to take extreme cases. It is a very serious matter to cut off 10s., 12s., or 15s. a week from a family income of that size in that way. [An HON. MEMBER: "It is intended to do it."] It may be intended to do it, but, I warn the Government that if it is done there are all sorts of ways in which workers can upset stability. They can go slow, and object to all sorts of existing agreements which have been come to in their particular industry. There are all sorts of ways of defeating a move of this kind. The Government must have the absolute confidence of the workers at workshop level that their basic standard is guaranteed, and that it is not going to be fooled about with.

The ideal on which we fought the Election was to implement our duty following on the war. It was a war against the forces of progress, and against the workers of. Europe. The workers in Europe have won the war and have to carry out their duty of consolidating those gains. Our duty in this democratic country is that of enabling democracy to grow and go forward towards controlling material things, and on that this whole movement is based. That is why we are not in the least deterred by the scoldings of hon. Members opposite at this stage. The Labour movement will take fresh enthusiasm at this point and carry on with its programme undismayed.

5.43 p.m.

Major Guy Lloyd (Renfrew, Eastern)

It is always interesting to hon. Members to have the opportunity of listening for a while to anyone who has been visiting the other side of the "iron curtain" and to get his reactions to what he learned there. But the hon. Member for Stroud (Mr. Parkin) will forgive me, I hope, if I do not pursue some of the arguments he put forward, or dispute with him some of the economics he learned there. Before passing on, however, I would like to say that I can never understand why individuals who come back from the other side of the iron curtain—

Mr. Gallacher (Fife, West)

There is no iron curtain at all.

Major Lloyd

—never tell us the answers to the questions so many people in this country want to know. There are such questions as: What do the Russians do with those who continuously absent themselves from work? What do the Russians do in regard to unofficial strikes? What do tire Russians do to insist upon increased production, and what do the Russians do to discipline those who will not obey the orders of their leaders in the unions? Those are the kind of questions we ask and it would be nice if the hon. Member who has had such an interesting visit with his happy little group of comrades, had been able to answer them.

Today I have the opportunity, as a representative of Scotland, to express the views of the great majority of the Scottish people on this Amendment we have put forward. [Laughter.] Certainly, because in fact Scotland was never led away up the garden path anything like so badly in July, 1945, as were England and Wales. Scotland had not entirely forgotten, as had so many other parts of the country, the lamentable experiences Scotland and the whole country had during those two disastrous years of Socialist Government between 1929 and 1931. Public memory is always very short, and those years are always slurred over by hon. Members opposite. Were they not the years between the wars, which are supposed to have been years of Tory misrule? Scotland has not forgotten the bitter lesson learned as to the true meaning of Socialist promises at the General Election in 1929 and the bitter disillusionment which followed those promises, and the result of the General Election of 1931 when the Labour Government was swept away from power by, I believe, the biggest majority returned against any Government that has ever been booted out by the electors of this country. Exactly the same thing has happened already, within two years or a little more, as happened then, except that the consequences are worse, and likely to be more lasting because, unfortunately, it is not possible now, in view of the tame majority opposite, to get rid of our new masters, as we did then.

So Scotland goes on, as other parts of the country go on, suffering from the consequences of that disastrous decision, that period of midsummer madness, in July, 1945. On the other hand, the Scottish people are not surprised at what has happened, because so many of them expected it, and a great many of us on these benches, in speech after speech during the Election campaign, predicted that it would happen, if the people were so foolish as to believe the promises of the Labour Party. Where have those promises gone? They have gone with the wind, and are repudiated everywhere. Now, in spite of the brave new world, and the Socialist Utopia, we are reduced to a state of affairs which even Ministers opposite have to describe as disastrous in the extreme, and as a situation of unprecedented gravity.

At last the wheel comes full circle and the Minister for Economic Affairs tells us the truth, that the promises have gone into the limbo of forgotten things. But the majority is still there, and they have betrayed the nation. It was not because they were not warned. As has been emphasised in speech after speech during the last few days, the Government have had every warning of the way things were going and what would happen if they did not listen to advice. In every single instance those warnings, which came from this side of the House, or from responsible newspapers, have been laughed at and despised. Every time we have warned the Government what would happen we have been mocked at, and told that it was just Tory propaganda. They even suggested that we manufactured the fuel crisis, or had something to do with the cold weather of last winter.

Can it be denied by hon. Members opposite, who make cheap jokes to cover up their failure, that every one of our warnings was laughed at, and that the Minister of Fuel and Power himself denied our suggestions? He told the country there was nothing in it, that it was, in fact, just Tory propaganda. It was the same story about our warnings in regard to the possibility of grave inconvenience through cuts in electricity supplies. The Scottish people were told again and again by Scottish Members of Parliament on this side of the House that that was inevitable. The great leaders of private enterprise in Scottish distribution of electricity warned Scotland that they would have to go desperately short. We warned the Minister of Fuel and Power in the House of Commons, and he was warned by leaders of the industry. His answer was "nothing of the kind. It is Tory propaganda. I should know, and it is not true." Within a few weeks Scotland and the nation suffered because those warnings were ignored. We warned the Government and the people that the American Loan would not last for five years; we said that it would not last for more than a year or two. I said that at many meetings in Scotland, and I was laughed at by the ignorant hecklers at the back of the hall, who said that it was Tory propaganda, and that the Loan would last five years; had not the leaders of the Labour Party always told them so? Where is the Loan today? Again, gone with the promises of the Labour Party.

My second indictment against this Government and against those who sit behind them, tamely earning their thousand a year—which they never put before the people of Scotland as one of those reasons why they should vote them into power at the last Election—is that they have not only broken the promises they gave to the people of Scotland, but have refused to accept any warnings which might have been of great value had they been acted upon in time. My third indictment—and this is a matter which angers the people of Scotland more than any other—is that they have plainly pursued theories, dogmas and doctrines which the majority of the people of Scotland believe are fallacious, and which they now know are fallacious. They have ignored the needs of the nation. Above all, they have ignored the needs of Scotland, and of all parts of the British Isles.

Scotland has received a raw deal from this Government. No part of Britain had more promises given ad lib from every Labour platform throughout Scotland—" We will look after the interests of Scotland, we will see that Scotland has this, that and the other." What has Scotland got that she wanted as a result of the Labour Government? Invariably Labour Party Members from Scotland put the party whip before the needs of Scotland. That is known throughout the length and breadth of Scotland, and there is no honest Labour Member who represents a Scottish seat who does not know that it is true. Hon.; Gentlemen have definitely put the party whip before the interests of Scotland, in spite of the fact that some of them had hopes of promotion which I understand have not been fulfilled.

I have just returned from an enthusiastic campaign in Scotland, where I spoke two and three times a night, and the overwhelming enthusiasm of the audiences, many people being turned away in some cases, show what Scotland thinks. One of the things which irritates the people of Scotland more than another is the propaganda untruth that we on this side of the House have no policy That follows the typical Socialist propaganda in other parts of Europe, based upon the belief that if they tell a big enough lie and go on telling it, it may be believed. That assertion is not true, and the reason why the party opposite continue to make this gross misstatement of fact is because the policy which we follow and have been pressing, and the faith and philosophy in which we believe, are fundamentally different from their own.

We are not a class party. Neither would we form a Government, and never have formed one, as a class party. There is the class party—on the other side of the House. There are those who for years have preached class hatred in the industrial areas of Scotland and who in most cases, owe their seats and salaries in Parliament solely to the fact that they have preached class hatred and endeavoured to arouse class envy and to divide the people of this nation when unity was the most vital essential of all. It is because this is known in the industrial areas of Scotland that they are despised for their broken promises. Now that they have obtained power they are despised because they have betrayed the interests of Scotland, and have put out the propaganda untruth that we have not a policy which can still save the nation from disaster in spite of His Majesty's Government.

5.55 p.m.

Mr. Beswick (Uxbridge)

I was surprised at the modesty of the hon. and gallant Member for East Renfrew (Major Lloyd) who got up to speak in the name of the majority of the people of Scotland. I was even more surprised that he should say that the whole position of Scotland depended upon two years of minority Labour Government between 1929 and 1931, I am sure that the majority of proud Scottish people, for whom he pretends to speak, would not say that their entire history depended upon those two years.

Major Lloyd

May I interrupt, for the sake of accuracy, to say that I said no such thing? I said that the people of Scotland had not forgotten those two years.

Mr. Beswick

But the hon. and gallant Member went on to say that their position has been ruined by the Government of those two years. What surprises me even more is why, if the hon. and gallant Gentleman has all this ability and prescience, of which he so freely boasts, he and his party did not do something about the gap in our overseas trade in the years before the war. If these business people are able to tackle these things in such a splendid fashion, how is it that even before the war this country was heading rapidly for bankruptcy? [Interruption.] I would refer the hon. Member to the figures in the Bulletin of the Oxford University Institute of Statistics which were quoted yesterday by my hon. Friend the Member for Devonport (Mr. Foot), when he pointed out that, taking account of the rise in prices, the adverse trade balance in 1938 was almost the same as in 1946.

I am a little disappointed that the right hon. Gentleman the Member for Bromley (Mr. H. Macmillan) is not in his place. When I asked if he would give way when he was speaking this afternoon, I wanted to ask him if the term "hedging," which he used today, would have applied equally to the operations of the right hon. Gentleman the Member for Woodford (Mr. Churchill) in relation to India. When things appeared to be going well, when India and Pakistan were coming into the Commonwealth of Nations, the right hon. Member for Woodford offered his congratulations. The speeches of the right hon. Gentleman on the Front Bench beside him were also congratulatory in respect of the services which the Prime Minister had rendered. Then the right hon. Gentleman comes along and makes the sort of remarks which he made yesterday. The attitude which the Opposition have taken up over India is completely dishonest, and does no credit to our political life.

The Opposition have derived a considerable amount of satisfaction from the speech made yesterday from these benches about the delays and the restrictions resulting from an economy which is dependent upon certain permits and controls. I would say two things about these controls. First, I appreciate the frustrations to which industry at the moment is subject, but I believe that those frustrations would be as nothing to the kind of embitterment which would follow if the controls were taken off and, in the words of the Leader of the Opposition, the unbridled horses charged hither and thither. The monopolists would take the greatest share of what raw materials were going, irrespective of justice to the smaller man, and quite without regard to the needs of the community as a whole.

But also, if we are considering the inefficiency to which my hon. Friend referred in relation to these delays, we must consider the kind of inefficiency which resulted from the system before the war. I remember very well as a boy going into the woods with my father and my brothers to gather sticks to drag back home in order to have a fire. We did that in the company of men who were skilled miners who would have been only too glad to go down the pits to get coal, if they had been permitted to do so for a fair remuneration. It was a common sight to see men, women and children at the dirt heap in the pit yard scratching about among the dirt and bind for a little bit of combustible material with which to make a fire, and yet the men were skilled miners denied the opportunity to mine coal.

That is the kind of inefficiency we must bear in mind when considering the frustrations and delays of the present day. However, we must be constructive. I would support the suggestion that a committee be set up, probably representative of both sides of the House, consisting of men who have had experience in these matters, with the object of seeing what could be done to streamline the controls and to ensure that the system of giving permits to industry is modelled in such a way as to be as efficient as possible. Something could be done, and I think that the Government would be well advised if they took advice from the many hon. Members experienced in these things.

The hon. Member for Orpington (Sir W. Smithers) is much abused these days, both at Brighton and in this House, but it seems to me that amongst all the chaff he strews about there is one little grain of truth to which I would like to call attention. I refer to the steadfast fight he has put up for a stabilisation of the currency. Something should be done in this matter. Very often remarks which my right hon. Friend the Member for Wakefield '(Mr. Arthur Greenwood) made some years ago about "Pounds, shillings and pence being meaningless symbols" are distorted by spokesmen opposite. What my right hon. Friend meant was that the real criterion of the wealth of the country was the amount of goods and services it is capable of producing. It is not true that we on this side of the House do not pay proper attention to the virtue of thrift. Indeed, I would say that the Cooperative movement and the trade unions which gave birth to the political parties that made this Government possible, were pioneers in teaching the virtue of thrift. An hon. Members laughs, but let me say that my memory takes me back to the time when as a very tiny child my first connection with the Co-operative movement was to be given a bank book by the local Coop. Penny Bank. On Saturday afternoon I would go along and pay my penny or twopence into the bank. I was encouraged to do that and I will always remember the inscription over the door of the premises which said: Take care of the pennies and the pounds will take care of themselves. I think of that very often when hon. Members opposite say that the £2 million or £3 million of dollars saved on newsprint, or the £7,500,000 saved by the abolition of the basic petrol ration, are small items not worth bothering about.

Major Peter Roberts (Sheffield, Ecclesall)

What about the £50 million in Germany?

Mr. Beswick

I criticised that as much as anyone in this House, speaking against my own Government. I think something should have been done about it earlier that was the case. However, the criticism is that on this side of the House we have no regard to the virtue of thrift. I am trying to prove that it was bred and born in the movement for which we stand. If I may be allowed another little reminiscence, on Friday evenings with my father, the treasurer of the local miners federation, I would go to the Sunday school room of the Nonconformist chapel where the trade union used to meet, and he would collect the subscriptions for the field club and the sick club. That was encouraging miners in the virtue of thrift. Today in this country, owing to the gradually increasing cost of living, thrift is being discouraged. I agree with those Members in all parts of the House who would like to see this increase in the cost of living halted, because it is eating into our improved social services and our wage advances.

Mr. Sidney Shephard (Newark)

Would the hon. Gentleman agree that in those days the greatest incentive to thrift was the desire to build a house, and since that possibility has been removed the incentive is no longer there?

Mr. Beswick

As a matter of fact, in those days there was no possibility, even if one worked hard and long, of getting enough money with which to buy a house.

Sir William Darling (Edinburgh, South)

Hundreds of thousands of people bought houses.

Mr. Beswick

We saved for the rainy day. In those days we had no hope of getting a house of our own. I am wholly in agreement with what Lord Keynes wrote some time ago about the necessity for a gradual increase in the price level in order to lessen the burdens of the rentier. But I feel that that movement has now gone far enough and that the technique of pumping new credit into the economic system should be reserved for the time when production has caught up with the demand. Then we could pump in this new credit by way of increased old age pensions, better social services, and so on. I emphasise that I am firmly convinced that if the national savings campaign is to be a success then the Chancellor of the Exchequer in his Budget must ensure that the value of a £ sterling should remain as high in a year's time as it is today. Only yesterday I saw a letter from a correspondent who said, "They are asking me to save. My feeling is that I want to blue what I have got now." We ought to do something about this.

I also take the opportunity of adding my voice to those of others from both sides of the House in expressing the hope that the Chancellor will not again give way to this business of pumping credit into the City of London in order to satisfy himself about the price of certain bonds and, incidentally, give bloated profits to the speculators by way of capital appreciation on the Stock Exchange. I have not time to go into details or to make any suggestions about what I think the autumn Budget should contain. I hope that it will be an instrument of progressive social policy. I hope that it will concentrate on giving incentives to the honest and productive worker in our midst, and more extreme discouragement to the mere speculator and usurer.

In that connection, I would like to emphasise a plea which was made earlier in the Debate about food subsidies. It would be a tragic mistake if the Chancellor tried to remove the food subsidies, and all those hon. Gentlemen opposite, whoa short time ago were agreeing with me that we have to stabilise the purchasing power of the £ ought to be with me now on this question of food subsidies. If the Chancellor is going to use this autumn Budget as an instrument of progressive social policy, might I address one or two words to the Minister for Economic Affairs, whom I would ask for two things especially?

First, I would ask that more should be done, if we are going to increase production, to bring those reluctant employers into line over this question of joint production committees. If necessary, let us have compulsion, and, if we are going to have these joint production committees, it is essential that they should be made worth while, and that the workers representatives on them should have all the facts and figures given to them so that they may know what is the policy of the firm and how the rewards of their industry are being allocated.

Secondly, I would say to the right hon. and learned Gentleman that, now that we have got targets for our different industries, something more should be done to break down these targets and bring them home to the individual workers and firms. We are told that, in some cases, the whole of the present output is to go abroad, as, for example, with poplins. That fact has been widely advertised, but what is even more important, and what should have been even widely advertised is the other statement of the Minister that everything over and above present production shall be sent to the home market. What I would like to see is some kind of chart outside the factory or the town hall showing what progress is being made towards that point beyond which all production will be for the home market. I think that would be an incentive both to the individual worker engaged in the industry and an encouragement to the general working population also making their contribution, and who will want to know what their chances are of being able to buy poplin or china or whatever it is.

My last point is this. We must emphasise that part of the Minister's speech in which he said that the only goods to go abroad should be those which bring us back something definite in return. We cannot afford unrequited exports. In this connection I wondered why the right hon. and learned Gentleman said that when we have balanced our over-all overseas payments from the beginning of 1949, we would still have an adverse balance with the dollar area of £250 million. If that is so, it would seem to me that we are sending £250 million worth of goods somewhere without getting anything in return. I suggest that this should be explained as clearly as possible, because we cannot afford, and our workers will be right if they object to it, to send outside this country clothing or other essential consumer goods and get back in return nothing at all for the time being or only wine, grapes, peaches or luxury articles of that kind.

I would like to say something about the South African Loan. I understand that the £80 million which the South African Government have made available to us, and for which we are extremely grateful, is conditional upon our taking a certain amount of luxury fruits, like grapes and peaches. I think the figure which we had to accept was £12 million worth of goods, mostly luxuries—

Mr. Oliver Lyttelton (Aldershot)

Dried fruit.

Mr. Beswick

Yes, dried fruit but also grapes, peaches and wine. Whatever are the goods that are to come in, I think it should be made clear to the workers of this country that they are only coming in because they give us the opportunity of purchasing another £70 million worth of other essential goods. We have to explain these matters to the workers.

May I make one more reference to the speech of the Minister for Economic Affairs? I would have liked to catch your eye, Mr. Speaker, on Thursday, because I wished to pay my tribute to that speech. I think it was a fine speech and that it embodied a fine spirit, and I have been greatly disappointed by a great deal of the confused and unfair criticism that has since been made.

It will be interesting, and I think history will be able to form a proper opinion about it, to find out who is chiefly responsible for the admittedly confused and disappointed feeling which so many young people experience in this country after the war. It is my honest opinion that the one chiefly responsible for this confusion and embitterment is the right hon. Member for Woodford. In the intemperate, intolerant and vicious speeches which he has made, he has done more than anyone. If anyone tells me that the reason is only because of the policy pursued by this Government, I should reply that those speeches were made even before this Government was formed. I hope the Prime Minister will fulfil the wish of many people to ignore these stupid utterances of the right hon. Member for Woodford in this House. Let my right hon. Friend make his appeal to the people who put him in power; I am sure they will not let him down.

6.17 p.m.

Mr. J. H. Hare (Woodbridge)

I think we have all been most interested in the youthful reminiscences of the hon. Member for Uxbridge (Mr. Beswick) who, we are delighted to hear, is a great believer in thrift. One of the difficulties of getting people to save is that one has to give them confidence in the Government of the day and, until we have a stable Government, in which the people can have confidence, it is not going to be easy to try to urge them to be thrifty. The hon. Member also appears to be somewhat anxious about the future intentions of his own Front Bench. He has given a great deal of advice to the Minister for Economic Affairs and to the Chancellor of the Exchequer, and doubtless the Minister of National Insurance," who is the senior Minister now on the Front Bench, will have taken note of those recommendations; but, if he has not, I hope the hon. Gentleman opposite may perhaps be less firm in his belief in the efficiency of his Front Bench if his wise words are ignored. As to the concluding remarks of the hon. Member's speech, I think I might say that the majority of hon. Members must have felt they were in rather bad taste. I think that few hon. Members would deny that the right hon. Gentleman the Member for Woodford (Mr. Churchill), irrespective of party, is a national figure and I think the hon. Member would have done well to have been a Member of this House rather longer before he used such rash and intemperate words about my right hon. Friend.

I wish to confine myself to one subject of very great importance, upon which great stress has been laid by Members on both sides of the House. It is the subject of housing. We have had various mentions of it so far, but there are three important points which I wish to put before the House. First of all, I feel that the position of the Minister of Health, with regard to his past achievements and his likely future intentions, should be examined fairly closely. Secondly, I feel that the actual effect of the proposals put forward by the Minister for Economic Affairs should be made very clear so that the nation understands what is to be the likely trend of the housing programme in the next two and a half years. Thirdly, as we are going to suffer a drastic curtailment in housing, and as it is the intention to give certain priorities to rural areas, I would like to say a word or two as to how the Government might most efficiently pursue a policy of providing additional homes in rural areas for the new labour force which they wish to attract to farming.

My first point is the position of the right hon. Gentleman the Minister of Health. When this Debate was opened, my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) referred to housing, and pointed out the inadequacy, and the grave disappointment that the Government's housing record has proved to the nation as a whole. He referred, in particular, to a speech which the Minister of Health made on 21st July, 1946, in which he said: But I can give this promise. When the next Election occurs there will be no housing problem in Great Britain for the British working man. Maybe the right hon. Gentleman genuinely thought that at the time, but, even if he did, he should have realised that he was a responsible Minister, and that there are many unfortunate families in this country today who genuinely believed him and who are now grossly and tragically disappointed.

That was a year and three months ago. I will now tell the House what the right hon. Gentleman the Minister of Health said in this House only three months ago. He said: There is no single problem from which more heartaching arises than from this lack of housing accommodation, and I resist the suggestion that has been made in some quarters that it is necessary for us to reduce our housing programme. I believe that if we did that, we would gravely jeopardise national progress. There is nothing which creates a sense of alarm and despondence more than not to see new houses springing up all over the country. How can we expect the nation to reinvigorate itself if it throws its hands in the air and says it cannot provide decent homes for its own people? I reject that suggestion."—[OFFICIAL REPORT, 28th July, 1947; Vol. 441, c. 89, 90.] That is what the right hon. Gentleman said three months ago. Maybe he is right; I am not arguing whether he is right or wrong. It may be that the Government have made a real error in deciding to cut down their housing programme, but where does the right hon. Gentleman stand? If he disapproves of what the Minister for Economic Affairs has decided to do, surely, he ought not to stay for one moment longer in his present position. So much for the Minister of Health. I hope that he will not remain in his present position, and I think that, if he has a sense of integrity and really believes in what he says, he would not wish to remain in his present office.

Let us examine the actual effect of the announcement made by the Minister for Economic Affairs. He said that out of the 260,000 houses which we have in the course of construction, and of the 90,000 houses which are under contract, but not yet begun, we are to press forward and complete those houses as soon as possible. I hope that it will be as soon as possible. He then went on to say that by June, 1949, we hoped to have 140,000 houses in course of construction, and that in the year 1949 we could hope to complete 140,000 houses. I think it is important that we should try and work out what actual progress is likely to be made in housing between the period September, 1947, to June, 1949. Roughly, it seems to work out like this. During this year, including the four months from September to December, we should complete about 120,000 houses—I am talking about new permanent houses. It is hoped to complete a larger number than that next year, and I suggest that the figure will be in the neighbourhood of 140,000. That leaves 70,000 to be completed in the first half of 1949, making 260,000 in all to be completed up to June, 1949.

If 140,000 houses are to be in course of construction by June, 1949, in addition to the existing contracts, it means that it will only be possible to allow licences for 50,000 additional new houses during the whole of the period up to June, 1949, and that covers the nation as a whole. That is a very serious and alarming position in which to find ourselves. To give the House some idea of rates of completion and starting, I would point out that it means, roughly, that, in July, which is the best month we have had this year, we completed 12,426 houses, and we commenced, during that month, 19,000 new houses. Working it out on the basis of the figures which I have given, it will mean that we should be completing during the next 22 months an average of 11,800 houses a month, and only starting slightly more than 6,000 houses.

If possible, I would like some confirmation of those figures, because I believe that local authorities, as well as hundreds of thousands of families waiting for houses, would like to have some idea of what actual effect the Government's new housing policy is going to have on them. I also feel that some guidance and information should be given to the building industry as to how they are to organise themselves during these coming 22 months. If we merely cut down on the commencement of new houses, it will mean that we shall seriously reduce our labour force engaged on the clearance of sites and on the laying of foundations and services; it will mean also that the rest of our labour force will still be employed in completing houses already started.

Thus, by the end of the period for which the Government have planned, June, 1949, we shall have the greatest possible difficulty in restarting the housing machine, because the labour which we have so carefully accumulated in order to start houses will have been dissipated, and will have gone to other industries. It will have a very serious effect on any Government which hopes to make a start on properly fulfilling the housing needs of the nation. Those are all points on which I think the industry should receive some guidance. They are still left in the dark, and the sooner some help is given to them, the better it will be for the nation as a whole.

My final point is on the proportion of the new housing effort that the Government are prepared to give to the rural areas. Rural housing has a sad history. I am afraid that the Minister of Health and his deputy, the Parliamentary Secretary, come in for really serious blame. They have done all they conceivably can to sabotage the efforts of the Minister of Agriculture to provide an increased labour force on the land by repealing the Rural Workers Housing Act and by their refusal to grant licences to landlords and farmers who are prepared to build cottages for their workers. They have concealed the truth that rural district councils were not, in fact, making a big enough contribution towards the housing of agricultural workers. By maintaining this fallacy for at least nine months, they have done immeasurable harm to those who were really genuinely interested in housing the agricultural workers.

We have the figures. Out of 23,000 houses produced by rural district councils and private enterprise, only 1,819 houses have actually been allotted to agricultural workers, 1,000 of which have been provided by the private enterprise builder. What can be done by the Minister of Health to accelerate the provision of houses for rural workers, and what can be done to improve the conditions of existing houses? I would like to make three suggestions. First, let us forget prejudice against reconditioning. Let us go ahead with modernising those 100,000 houses which, as long ago as October, 1946, the Minister was informed by the Hobhouse Report were suitable for such a purpose. Secondly, let us insist that rural district councils and local authorities in rural areas are compelled to give at least 80 per cent. of their new houses to agricultural workers.

Having done that, let us also insist that those houses which are allotted to agricultural workers are tied to the industry, so that the worker who has a house in, let us say, the neighbourhood of Ipswich is not allowed to change his occupation and work in a factory in Ipswich itself and still retain that house. My third point is that it would not be too much to ask the Minister of Health to forget, for a period at any rate, his prejudice against the landowner and the farmer who are prepared to erect houses at their own expense for their farmworkers without any assistance from the Minister of Health. We should then create a greatly increased number of houses. It is so pitiful at this time to maintain these party political prejudices.

I hope the Minister of Health will agree to the suggestion that the agricultural areas can expect a very fair share of the available prefabricated temporary houses which are in the general Ministry of Works pool. By doing these things, so far as the rural areas are concerned, the Minister of Health can undo some of the untold harm which he has inflicted on the rest of the community.

6.32 p.m.

Mrs. Middleton (Plymouth, Sutton)

I share the concern of the hon. Member for Woodbridge (Mr. Hare) about the housing programme announced in the Government's policy. But, before speaking on that subject, I wish to say a few words about the remarks of the right hon. Member for Bromley (Mr. H. Macmillan) on food. I understood him to refer to his former constituency, Stockton-on-Tees, and he appeared to indicate—I hope I understood him correctly—that at the time when unemployment was rife in this country, in the 1930's, the unemployed in Stockton-on-Tees and in Newcastle-on-Tyne, were getting a calorie intake greater than our calorie intake today, averaged over the whole community—indeed, a calorie intake of 2,900 units.

Mr. Lyttelton

If the hon. Lady will forgive me, I think my right hon. Friend was referring to the average number of calories which the Minister of Economic Affairs foreshadowed will represent the national diet, and not 2,900 calories.

Mrs. Middleton

That is true, and I am grateful to the right hon. Gentleman for making the point. At the same time, the point to which I am referring is one which I understood him to make, namely that the calorie intake of the unemployed man at that time was in the region of 2,900 calories per day. I would like to remind him—and I wish he was in his place at this moment—of the experience of the medical officer of health for Stockton-on-Tees at that time, the late Dr. McGonigle, who, when he removed a certain proportion of the population from overcrowded areas in the centre of that town to a new housing estate on the outskirts, found that because of the increased cost incurred by living on the estate the death rate among that section of the population, instead of going down, was actually increasing. He attributed this state of affairs to the fact that the workers were living on so low an income that the extra cost of living on the outskirts had such an effect on their diet as to cause the increased death rate which took place.

In this connection, may I also remind the House of the researches which were carried out by other people at that time? For instance, there was the minimum diet which was put forward by the British Medical Association. It. was not a very high diet, but, nevertheless, it was a diet to which many millions of the people could not conform because their incomes were so low. Then there was the work done at that time by Sir John Boyd Orr, now head of the Food and Agricultural Organisation of the United Nations. He found that the incomes of, I believe, at least 20 million people were so low during those years that, do what the housewives would, they could not provide for their families a diet which would safeguard them from the dangers of ill-health through food shortages.

Mr. Osborne

In view of the facts which the hon. Lady is quoting, may I point out that it was as a result of the British Medical Association's research that that figure of 2,900 calories was given for Stockton-on-Tees?

Mrs. Middleton

I cannot answer the hon. Gentleman on that point. He may be right. I will look into the matter. What I do know, from my contact with working class people, is that the average diet, particularly of the larger families, was nothing like the calorie intake of 2,900 units per day.

I now wish to refer to the question of housing. No man or woman of patriotic spirit, or who is concerned about national survival, will fail to support this Government to the utmost of their capacity in the measures which the Government have found necessary to take, and which were outlined in the Gracious Speech, in order to get our country out of her present difficulties. I would emphasise that they are difficulties which have not been caused by this country or by the actions of this Government; they are the result of world factors over which this Government and this country have had very little, if any, control. Nothing in this Debate has staggered me more than the way in which hon. Members opposite, including their Leader, despite protestations of concern for the national interest, have been willing to put a spanner in the wheel of national recovery by making speeches calculated in some instances entirely to mislead people in other countries and to produce the very maximum misunderstanding abroad.

Among all the items of retrenchment which the Government have announced, that which worries me most is that which foreshadows a cut in housing programmes. It is a blow to our community—and particularly to the women of our community—at our most vulnerable spot. I hope that when the Prime Minister replies tonight we shall hear something about the question of alternative materials, and of research which is being done in order to find ways of overcoming the difficulties—for instance, the difficulty of not being able to import all the soft wood we should like for housing purposes; and I hope we shall hear about experiments which are going on to produce from plastics, or from other sources, the substitute materials which will enable our housing programmes speedily to make headway.

I think every one of us in this House must agree that the Minister of Health and the Government are quite right in giving priority in housing in this particular situation to the mining villages. There, are terrible conditions of housing in our mining areas, conditions created by capitalism—capitalism red in tooth and claw—and by the poverty which capitalism has imposed on the mining communities for many decades past. No one will question for a moment the wisdom of the Government in giving priority in housing to those engaged in this most basic of all our industries. Indeed, national recovery depends upon that priority. The men we are hoping to recruit to the mining industry will not tolerate conditions for their wives and for their families in their homes hardly one whit better than the conditions they themselves have to tolerate in some of the more obsolete of the mines in which they are called upon to work underground. Nor, I think, will any one disagree with the Government in giving priority in housing to those engaged in the great service of agriculture. Here again—I know this from personal experience—housing conditions in rural areas are sometimes shocking—sometimes more shocking than those in mining villages.

Frankly, however, I cannot understand Members of the party opposite belabouring the Government about conditions of housing in the rural areas. In the countryside the power of the Conservative Party has been unchallenged for decades—the power of landlordism, combined with the power of control of almost every organ of local government. This terrible housing situation in the rural areas could have been obviated by the party opposite, both in the localities and in this House, when they had the power to do so in the years before the war. During the Recess I have had an opportunity of visiting many rural areas in the West Country. I find, I admit to the House, bitterness about housing conditions, certainly; but bitterness not directed against His Majesty's Government, not directed against His Majesty's Minister of Health, but bitterness directed against reactionary local authorities who have failed to use, or who are definitely misusing, the powers the Minister of Health has handed to them.

My plea to the Government tonight is not that these priorities should be scrapped, or that they should be whittled down by one iota. My plea is that, alongside these two inescapable priorities, with which we all agree, a third priority should be recognised, the priority of those areas in this country that were heavily damaged during the period of the war. I am fortified in putting forward this claim to the House for priority for blitzed cities in that the Leader of the House yesterday reminded the Leader of the Opposition, who seemed to have forgotten it, of this problem. Here are his words: A whole lot of building and labour has had to be diverted to putting up these houses"— those destroyed in the war— and to getting them on a care and maintenance basis."—[OFFICIAL REPORT, 28th October, 1947; Vol. 443, c. 730.] That is what the Leader of the House said. I can speak with greater confidence in asking for this priority because of the excellent record of the municipality in which my constituency is situated. This area; after two years of a Labour controlled administration, has a record, I believe, unequalled by any city of its size in any part of the British Isles. That work of reconstruction, of putting the city on its feet again after the havoc of war, has been signally honoured today by a visit from Their Majesties to commemorate the first step in the physical reconstruction of our Civic Centre on the lines of the Plymouth Plan, which, through the film, "The Way We Live," and by other means, has now become world famous. If he will allow me, I should like to pay my personal tribute to the excellent work that has been done by my colleague, the hon. Member for the Drake Division (Mr. Medland), who is also an alderman of the Plymouth City Council, in. forwarding that work of reconstruction, and in all that he has done in getting it so far advanced as it is at the present time.

The work of reconstruction of our Civic Centre, opened by the King today, is only part of the job that has been done in the City of Plymouth in the last two years. The House may be interested to know that during that period 23 miles of new concrete roads have been made in the city, and that 49 miles of sewers and drains have also been made to serve our new housing estates. The housing committee of the local authority have erected no less than 3,237 houses, and of those, 1,002 houses are permanent houses.

In connection with the question of road making may I draw the attention of the House to what has so often happened under private enterprise development in years past, when that enterprise was engaged on the job of building houses for lower middle class and working class tenants or buyers. No proper roads were made. In many of our cities, including parts of my constituency, people who have bought houses, or people who are tenants of houses, are still waiting—have been waiting for years from before the war—in order to get the roads made up. In this connection, indeed, only this week it was my duty as Member for the Sutton Division to send to the Minister of Health a petition that I have received from one such area in my own constituency, an area of particularly steep gradients. I would challenge any hon. Gentleman opposite to wheel a perambulator 20 yards along the road in question without toppling the baby out head foremost. There are roads where some doctors refuse to call, especially after dark, because the roads are so dangerous.

This is an area for the development of which the present Minister of Health is not responsible, nor for which the Labour controlled administration of the City of Plymouth is responsible, but one that was developed by private enterprise for profit making in the years before the war. Houses were put up in this fashion, and no one cared whether the services or roads were ever provided. Under our Labour controlled administration, an end has been put to all that, but the work of making up the leeway left over by the Tories when they were in office in the City of Plymouth is still very great.

The House may ask, "Why, in view of the fact that Plymouth has, as you say, so excellent a record in the last two years"—as indeed have many other of our war damaged cities—" do you still ask for priority treatment for blitzed areas? "The answer is that, in spite of our efforts the problem which we face in the blitzed areas of this country is very great indeed. In spite of 12,500 people being rehoused in my city we still have 12,548 families on our housing lists waiting for accommodation; and I am assured by those in charge of housing in the City of Plymouth that 9,246 of those cases can be classed as desperately urgent needing, if we could give it, immediate rehousing.

In addition to that we have nearly 1,000 of our families still evacuated, some as far afield as Penzance, Torquay, Polperro, Mevagissey and other parts of Cornwall, with their menfolk having to travel long distances to and from work, or else having to face the almost impossible task of maintaining their families some miles away while maintaining themselves and getting lodgings in the areas where their work is located. In view of the accelerated programme for demobilisation this problem which confronts us in Plymouth, as it confronts those in control of the affairs of many other cities, will be greatly worsened.

I want the Government and the House to realise that these figures which I have given are for only one of our cities. I want them to realise also what all this means in frustration, in loss of physical efficiency, in risks to health and life, to the very morality of our young people, and in danger to that greatest of all our national assets—the family circle. I do not look upon the housing problem as one that can be postponed until better times are with us, but as one which concerns the most essential of all our national raw materials—a happy and contented working population. Yesterday evening the hon. and not so gallant Member for Holderness (Lieut.-Commander Braithwaite) made a disparaging remark about my right hon. Friends on the Government Front Bench. He referred contemptuously to "old women of both sexes."

Mr. Austin (Stretford)

He is one himself.

Mrs. Middleton

I think it is beneath contempt for an hon. Member of this House to speak in that way of our older womenfolk today, oblivious of the very great services they are rendering to this nation. Has the hon. and gallant Member forgotten the services rendered by the older women of this country during the war, the services they rendered in the factories, in Civil Defence, in voluntary associations and in the home?

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

I do not quite follow the argument of the hon. Lady. Is she claiming that it is a very grave insult to compare the women of this country with the present occupants of the Government Front Bench?

Mrs. Middleton

I am claiming that it is a very grave insult to talk of the older women of our community with the contempt which was in the voice of the hon. and gallant Member for Holderness when he made that reference last night. I am defending the womanhood of this country, and particularly the older womanhood, from insulting remarks of that kind. I am doing so because of the record which the women of this country established for themselves in the years before the war and during the war, and which they are continuing to establish for themselves today. Our older women are going back to the factories and to cotton and woollen mills in their leisure time to work, in order to get the country out of the difficulties which face us. I was tempted to refer to the hon. Member's interjection because of the fact that, in this question of housing our womenfolk, and especially, in some cases, the older women, are bearing a more grievous burden than any other.

I should like to quote from a letter which I received only yesterday from the housing manager of the Corporation of Plymouth. This is the situation as he, describes it: In a very large number of ordinary three bedroom houses in Plymouth it is customary to find three families, each with children, usually consisting of the tenant, his grown family, and two of the married sons, or daughters who now have their own families I see, Mr. Speaker, you are indicating that I have exceeded my time. However, I did feel that in the Debate this evening I ought to say something about the burdens which the women of this country are bearing with regard to housing. It is for that reason in particular that I regard the question of housing as one which cannot be postponed; it involves the very raw materials upon which our national recovery depends; it is one which in our war damaged cities presents a situation demanding the very highest priority. I ask the Government in determining priorities, not to overlook this fact, and to see to it that those who are living under conditions imposed by bombs and blitz are given the earliest opportunity of recreating their homes and lives on a satisfactory basis.

6.58 p.m.

Mr. Sidney Shephard (Newark)

I hope the hon. Lady the Member for the Sutton Division of Plymouth (Mrs. Middleton) will forgive me if I do not follow her speech altogether. I can, however, promise her that I shall not put a spanner in the work of national recovery. I promise to speak for a very short time, and my observations will be limited to the tremendous task that industry is called upon to face from now on. It is, after all, to industry that we shall have to look to get us out of our troubles, and no amount of talking here, and no amount of legislation, will make a scrap of difference.

Up and down the country producers of every conceivable kind of goods that can be exported are getting ready to "go to it," just as they did during the war. My first impression of the workers is that over the broad sphere of industry they are working hard. I do not know why. It may be because of the marvellous summer we have had; it may be because of the recent holidays; it may be that they have got over the reaction which set in after the war. What is worrying me is whether there will be any reaction when the full force of the new austerity measures come into force. Even in the "Evening Standard" tonight there is the statement—it may not be true— A Board of Trade Official said that manufacturers have been warned that most, if not all, worsted cloth for men's suits and women's cloths, both utility and non-utility, will be switched over to the export markets. Well, it may be we shall reach a point when no amount of exhortation and no amount of promises will prevent a slackening of personal effort.

Next year, if the people are cold and hungry and have to do without clothes, and if the shops are empty of household necessities, it will require a great deal of self-discipline to stick it out. I hope that the Minister for Economic Affairs will bear that in mind when he makes the allocations between the home and export markets. The export targets have been set high, and it will be no easy task to reach them. Industry will want a great deal of help, because many of the problems of industry to-day are quite outside their own control. An employer must go to the employment exchange if he wants labour, and he must go to some Government Department if he wants raw materials. He needs an export licence even to export goods. The Government must accept a great responsibility today both for production and distribution. It will be no use blaming the employers if the new plan goes wrong, because the employers hands are tied; they are no longer free agents. If the volume of production is the only problem, provided always that we have sufficient raw materials and coal, I believe we can reach our export targets at the end of 1948. Our major problem will be not to produce, but to find markets. Even now, with exports running at only 111 per cent. of 1938–

Major Bruce (Portsmouth, North)

Only?

Mr. Shephard

At only 111 per cent. compared with what we have to achieve. Even now, with exports running at this percentage, country after country is closing its market to our goods. If we continue to apply the closed-shop principle to imports, we cannot expect anything else but retaliation. I hope the Treasury will give the greatest encouragement to our business people to go abroad and get orders. It is no good sitting at home waiting for buyers to come to us. I hope I am wrong, but I understand that at the moment, if a businessman has been overseas on business, he cannot get a permit or the money to go abroad again until three months have expired. If that is so, it seems very niggardly that we are prepared for the sake of a few pounds to sacrifice thousands of pounds worth of export business.

I wish now to turn to the appeal made by the Minister for Economic Affairs for joint consultation in industry. A lot has been said on this subject by hon. Members opposite. We on this side are just as anxious that there shall be joint consultations at all levels from the factory up. I thought it all the more deplorable after that speech that three days later the Secretary of State for War should have sown a few more seeds of discord in the speech he made in Scotland. He has only just been appointed Secretary of State for War; it seems to me that he is far more qualified to be the "Minister for class-war." If we are to overcome our economic difficulties, we must have peace in industry, and anyone who preaches class-war today is doing his country a disservice. We cannot afford bitterness, suspicion and recriminations between the two sides of industry. We have to bury the hatchet and forget the past. I do not want to slur over the evils of the industrial revolution, or the misery of large-scale unemployment. Every decent man must deplore them, and all hope that these days have gone for ever; but no amount of going back into past industrial history will solve our present problems. It is vital for employers and workers to pull together.

The Minister of Labour and I sit on the Council of the Industrial Welfare Society, which has done immense work in bettering industrial relations, and also in educating employers in many fields of industrial welfare. If a tribute has not been paid by this House to that society and to its director, Mr. Hyde, it is long overdue. I know that there has been a certain amount of opposition by some employers to joint consultation, but it is no secret that Communist shop stewards have used it to disrupt and worsen, instead of bettering, working relations. I remember that Mr. Mundella, when he set up his boards of conciliation many years ago, had the same sort of troubles and suspicions on both sides. I believe in joint consultation. I practise it, and my workers like it. It brings them into the picture, and it short-circuits grievances. It gives status to the workers, and it makes them feel they are part of the show. I do not care how modern a factory may be, how up to date its machinery or administration, if it has not good industrial relations, which presupposes joint consultation, it cannot achieve maximum production.

We have progressed a long way in our industrial evolution since the 19th century. Today, thousands of firms practise the best methods of industrial welfare. We want to see that system adopted by every firm. Co-partnerships and profit-sharing schemes are increasing yearly, and it may well be that we shall ultimately resolve our long-standing antagonism between capital and labour, not only in private enterprise but also in nationalised industries, through a universal extension of that system. My final words are these. They were written by Toynbee many years ago, and they are as true today as they were then. History will grow dim, faith will die and we shall see before us, not the fellow-citizen, but the obstinate suspicious workman, and the hard-grasping employer. Yet, let us remember, even in these moments of depression, that there never has been a time when such union between classes has been so possible as it is today.

7.9 p.m.

Mr. Sydney Silverman (Nelson and Colne)

The hon. Member for Newark (Mr. S. Shephard) has made a very moderate, restrained and constructive speech. I would not pretend that I agree with every word of it, but no one can fail to note that he was addressing himself earnestly, sincerely and constructively to the problem with which the House is faced today, and that he was practising his own doctrine that recriminations would not take us very much further. I take it, therefore, that he is not going to vote for this Amendment, which is quite a different affair.

Mr. S. Shephard

Wait and see.

Mr. Silverman

No doubt the crack of the whip will make him, in spite of his speech, vote for the Amendment. He has not said a word to show that he believes the Government are pursuing a partisan policy and not addressing themselves to the matter in hand. I have intervened in this Debate only because the Leader of the Opposition did me the honour yesterday of quoting a speech I made in this House in the last week of last Session. He did not hear me make that part of my speech to which he referred, although he heard the previous part of it. No doubt he felt he had exhausted the points on which he could interrupt me, and that was why he left at that stage.

I would like to deal for a minute or two with the criticisms he made of it. He said correctly that I had described American behaviour as the behaviour of shabby moneylenders. I have been to America since, and I think I ought to withdraw part of that statement. At least they are not shabby. They are the only people in the world who can afford to wear good English broadcloth. But I hope nobody in the House will believe that the speech I delivered was made in order to worsen relations between this country and America. The Americans themselves are not nearly so squeamish as their would-be friends who sit on the Opposition Benches in this House. They like a man to say what he believes; they do not believe, any more than I believe, that friendship between nations is cemented by a few pious benedictions. Surely, the right thing to do, if there are points in dispute, or points which lead to misunderstanding, is to bring them out into the open, say honestly what is thought about them, and then listen patiently to any reply that may be forthcoming.

Is there anybody who denies that the economic troubles of this country and Europe are directly attributable to American financial and economic policy? What was that policy? It is necessary that we should understand it, because Members opposite would like this Government to follow a similar policy here. Let us see what the policy was. In the first 12 or 18 months of the war, America had a Neutrality Act. Under that Act we could buy in America any munitions that we could pay for in advance, in dollars, and which we could carry away ourselves. In the very midst of the Battle of Britain we had to hand-haul aeroplanes, bought in the United States, across the Canadian border before we could fly them to this country. To pay for them we had to sell, in a forced market, every cent of our accumulated capital reserves and capital investments in America. Does anyone say now that that was a thing we ought to admire, and for which we ought to thank America? There is nobody now in America who does not regret that policy. I can understand exactly why they felt compelled to adopt that policy, exactly the difficulties of American statesmen in leading the American public out of that atmosphere into a more intelligible and intelligent atmosphere. I think that President Roosevelt will stand out, in future ages, as one of the really great statesmen in world history. He had a colossal task. The first thing he had to do was to lead American public and policy out of the cash-and-carry atmosphere to which the right hon. Gentleman the Member for Woodford (Mr. Churchill) studiously and prudently did not refer yesterday.

What was the second stage? It was Lend-Lease. What effect did that have on our economy? It meant that while we converted the whole of our industrial machine to war purposes, the American industrial economy was left virtually untouched and unimpaired by war. I am not complaining about that. We agreed to it; it was an agreement which we freely entered into, but it was not an agreement very favourable to this country if there was in mind the postwar situation which everybody ought to have envisaged.

I cannot understand why the right hon. Gentleman the Member for Woodford never included in the agreements which he then negotiated an agreement to continue Lend-Lease for three or four years after the end of the war. He could have got it. The then American President, in the situation prevailing at that time, would certainly have agreed to it. Everybody knows that if it had been continued for three or four years after the war the situation today would have been easier. I do not say that we would have been out of our troubles, but we would have been out of them quicker, and Europe's economy would have been more quickly and effectively reconstructed. The right hon. Gentleman the Member for Woodford did not include that in his speech, because he does not understand these problems—

Mr. Marlowe (Brighton)

Does the hon. Gentleman then agree that our financial settlement with America would have been better handled by my right hon. Friend the Member for Woodford?

Mr. Silverman

I have just proved that he was incapable of understanding it. After the situation, which his own lack of foresight had produced, had come into being, how could he have been trusted to handle it? I think this country showed its usual good sense when the right hon. Gentleman was rejected in July, 1945. But let me come back to the point. No such thing was in the agreement. What was in the agreement was that Lend-Lease should continue until the end of the war. I do not know what, under American law, is the date which determines that, but under our own law we have not yet reached the end of the war. What did the Americans do? Having had and operated an agreement which preserved their own industrial machine intact, while ours was transposed entirely to war purposes—and, before it could function in peacetime, had to be transferred back again—they cut off Lend-Lease the moment the last shot was fired at the end of the war.

Mr. Lyttelton

In accordance with the Act.

Mr. Silverman

I am not so sure. I do not think that Congress in the United States has declared the end of the war any more than we have.

Mr. Lyttelton

I think the hon. Member will find that the Lend-Lease Act was based on the defence of the United States. Therefore, he could not expect Lend-Lease to continue when there was no fighting.

Mr. Silverman

I feel sure that the right hon. Gentleman will agree that neither he nor I, uninstructed, are really qualified to talk about American law. If it is true that, under American law, the end of the war had been formally and legally proclaimed, then the Americans were within their legal rights in doing what they did. If that is not so, they were not. But let us assume that they were within their legal rights. Would it not have been an act of wise statesmanship to have taken the view that what was necessary in the common interest to prosecute the war to a successful conclusion was equally necessary, in the common interest, to be continued until Europe's shattered economy could be reconstructed? Law or no law, they did not do it.

They may have been entitled not to do that, but they did something to fill the gap created by the cessation of Lend-Lease. They came together with our negotiators and said, "We will have to do something during the transition period. What shall the transition period be?" They agreed that it should be four years, and they said, "What will you need during those four years?" It was agreed what would be needed, and they said, "What will it cost you?" The answer was, "x dollars," and in that way the amount of the Loan was arrived at. As soon as that was done, and the document was signed, sealed, and delivered, there started an uncontrolled rise in American prices that invalidated the whole of the negotiations. So the amount of money we had, instead of purchasing on the American market the amount of goods agreed to be necessary for four years, bought only the amount on the same basis, measured by the same yardstick, necessary for two-and-a-half years. That is why we came to the end of the Loan. [HON. MEMBERS: "No."] Hon. Members may say "No," but, in fact, on the figures of the Leader of the Opposition of a rise of 60 per cent. in prices, it is a simple sum to work out the date which I have arrived at.

Mr. Lyttelton

The hon. Gentleman must try and check up his facts. The rise in prices of raw materials was 28 per cent.

Mr. Silverman

The right hon. Gentleman is an important business magnate and I am not, but the rise was not 28 per cent. but 50 or 60 per cent. There is no reason why I should accept this figure in preference to those given by the Chancellor of the Exchequer. The figure given by the Leader of the Opposition yesterday was 60 per cent.

Mr. Lyttelton

They are not comparable with the same thing.

Mr. Silverman

Does the right hon. Gentleman mean that they sold us their food cheaper than they sold it to the Americans? I do not believe that. Nor do I believe that they sold us their raw materials cheaper than they sold them to the Americans, nor that they sold us their capital goods cheaper than they sold them to American consumers and industry; and we and Europe were caught in this general uncontrolled rise in prices. Having put us in a position in which we had to borrow, and produced a situation in which we had to spend the money in their shops, they then raised the prices against us. That is the situation.

What effect has it had on America? We are all involved in this because economically, at any rate, we are one world. The right hon. Gentleman the Leader of the Opposition said yesterday that, of course, the prices rose, and that when one takes off controls, of course, prices will rise. The right hon. Gentleman has got that far in his economic education. They did rise. I have just returned from America and the rise is not 60 per cent. so far as the basic things are concerned, but no or 120 per cent. in 12 months. Meat is 5s. a lb; butter 5s. a lb. They can only get it if they have the 5s. [HON. MEMBERS: "We cannot get it at all."] There are a great many Americans who can go into restaurants and buy steaks at 2½ dollars a time, but the vast mass of the American people cannot do it. With all the abundance that there is in the United States of America, with all their rising production, with their lack of all those scarcity conditions from which we suffer, there are more hungry and ill-nourished Americans than there are hungry and ill-nourished Englishmen; and that is the position in a country where there is no need for it. I thought there would be doubt expressed on the other side of the House as to that statement, but apparently they accept it.

Mr. Spearman (Scarborough and Whitby)

The rise in prices in the United States and the scarcity there is due to the fact that they are sending to Europe far more goods than ever before.

Mr. Silverman

That is just the sort Of thing that those who have misled America into this situation are saying in America, but it is sheer unadulterated bunkum. It is absolute nonsense. They are sending out of America far less now than they sent out during the war. My figures are taken from Americans. There is no public man in America who does not know these facts. There is no public man in America who does not admit today that the taking off of controls in America was all wrong, and there is no public man in America today who does not know that the controls will have to come back. I say that within six months there will be all over America a clamour for the re-imposition of control of prices. The right hon. Gentleman said that the remedy for rising prices is increased production, and the Leader of the House, replying to him, said with great force that if the remedy for high prices is increased production and they have got the increased production, why do the prices remain high? I know the answer. The answer is that the increased production remains in the warehouses and is not being sold to the people. The producers are holding off in order to keep up prices; the consumers are holding back in an endeavour to bring prices down, and one gets a complete stagnation of American industry as a consequence.

What will happen? It is quite easy to see. I know a lady in New York who went into a shoe shop and could not buy a pair of leather shoes. There was not a pair of leather shoes to be had in a leading shoe firm in New York. She asked, "Are you short of leather?" "No," said the shopman, "We are not short of leather. The Chicago warehouses are bursting with skins, but they are holding off, and we are holding off. There is a big war going on, but we do not know yet who is going to win. Come back in a few weeks, and we will be able to sell you a pair of leather shoes and tell you what they will cost." One day someone in Chicago will lose his nerve and will begin to sell. He will sell at any price, and then all the other holders of skins will do the same. They will all flood the market together, and prices will certainly come down but in as uncontrolled a way as they went up. They will come down below the cost of production, so that people will no longer produce them, and the factories will close down. The workers will be discharged and the old bitter struggle will go on quicker and quicker, as it did in 1920, 1930 and 1931.

Unless these controls in America are re-imposed in time, America is heading for the biggest and most sensational economic disaster in all history, and I hope to God that when it comes they will not start throwing their atom bombs about the world in an endeavour to, hide the cause. [HON. MEMBERS: "Shame."] It would be a great shame, but if there came again 15 million unemployed in the United States—if that does happen—I hope that this country is not going to dragged at the heels of it, and will be able to insulate itself from it. It is true that the world is passing through a social revolution. The right hon. Gentleman the Member for Bromley (Mr. H. Macmillan) said today—I do not know for whom he was talking, but certainly not for the Leader of the Opposition—that there ought to be a central strategic plan. One cannot have a central strategic plan without controls. One cannot have a central strategic plan unless one owns the thing one proposes to plan or, at any rate, the basic ones.

The Conservative Party conference came to that conclusion at Brighton. It decided that all the partisan policies that are complained of in this Amendment would not be reversed if they came to power—coal, the railways, and the Bank of England. Would they withdraw price controls and rationing? They know perfectly well they would not. Do they really think that the workers of this country are not putting their backs into things and working properly? Do they believe that the Loan was deliberately wasted by the Government? Those Tory businessmen who go to America are going round America crying "stinking fish" about their country, allowing the Americans to believe that the workers of this country are not doing their job and not putting their backs into it; allowing them to believe that the Loan was virtually wasted, and that if we get any more that will be wasted, too. Is that what is called rendering a service to this country and keeping partisan politics out of it? No, Sir. We in this country made up our minds in July, 1945, and the more I saw of America the more I thought, "Thank God for the practical good sense of the British people in 1945." We took our step in time instead of learning the hard way, as the Americans have to do.

I hope that there will be true friendship between this country and America. I hope it will not be an exclusive friendship, because I do not think exclusive friendships are possible. I believe in friendship with them and with other countries in the world, and I believe that out of their hard experience they will see that our way was not quite as it was represented to them by the Tory businessmen who toured their cities, that they will see that we are engaged in a great endeavour to stand on our own feet and earn our own living in our own way. We welcome such assistance as we are given, not as charity but as a bargain between two countries equally beneficial to both, and we are determined to lead Europe at any rate along the path of economic liberty in place of economic anarchy or dictatorship. Along that path, a middle course between the two, lies the progress of humanity and the preservation of civilisation in the world. I believe this Government, with all their faults, inadequacies and mistakes, are leading mankind along that path, and more rapidly than any other Government in any other country.

7.34 p.m.

Mr. Marlowe (Brighton)

When some months ago the hon. Gentleman the Member for Nelson and Colne (Mr. S. Silverman) made the speech in which he referred to shabby moneylenders, I confess that at the time I thought he had used merely the language of hyperbole and had gone a little further than he meant to but now he has come here this evening apparently for the special purpose of justifying what he said on that occasion. In a speech which sank to the lowest depths of shabbiness—

Mr. Stokes (Ipswich)

Rubbish!

Mr. Marlowe

The hon. Gentleman shows himself a judge of what is shabby, but if the hon. Gentleman, as he said, is intent upon better relations between this country and America he could not have done a worse disservice than he has just done. If that is the way he chooses to speak to the Americans I think the hon. Gentleman would do better to concentrate on using such language and talking in that manner to Ben Hecht. What the hon. Gentleman's speech has to do with the Amendment with which we are now concerned I confess I am at a loss to understand. I want to bring this Debate back to the Amendment, because we are not debating the conditions in America. We are debating the conditions here. Perhaps the only object which the hon. Gentleman had in mind was to divert attention to the other side of the Atlantic.

Mr. S. Silverman

The only object I had in mind was to reply to the attack made upon me by the right hon. Gentleman the Leader of the Opposition.

Mr. Marlowe

I do not want to pursue that matter any further, but the hon. Gentleman has completely failed to answer the attack which was made upon him. I think he deliberately evaded the point, and he did so in the same manner as every speaker from the other side of the House in this Debate has done. Although I have sat through the two days of this Debate I have scarcely heard one single speech from hon. Gentlemen on the opposite side which has been directed towards the Amendment which stands on the Order Paper and is the matter now before the House. Hon. Gentlemen opposite have complained of the absence of constructive ideas from this side, but every speech that I have heard coming from hon. Gentlemen opposite has been directed apparently towards solving our present problem by going over what happened between the years 1805 and 1945. How that is going to contribute to a solution of the present crisis I do not know.

I only heard one speech from the opposite side which even purported to be constructive, and it was from the hon. Gentleman the Member for Devonport (Mr. Foot) last night. He said he wanted to put forward constructive ideas, and I listened eagerly for them. What was his solution for the present crisis? He had three proposals. The first was to appoint a Royal Commission to examine the Civil Service, which presumably would report in about five years time and which would not be a great help in the present situation. The second proposal was to comb out the greengrocery trade which I do not believe would be very helpful at the moment. His third was that, having travelled abroad, he discovered foreign sellers like Government bulk purchasing. I bet they do. The whole of our objection to bulk purchasing is that it is favourable to the seller, and I am not surprised that the hon. Gentleman fortified our criticism of bulk purchasing by pointing out that the sellers want to retain it.

Mr. Stokes

Did the hon. and learned Member for Brighton (Mr. Marlowe) listen to the speeches of my hon. Friends the Member for North-West Hull (Mr. Mackay) and the hon. Member for East Middlesbrough (Mr. A. Edwards)?

Mr. Marlowe

I certainly did.

Mr. Stokes

The hon. Member did not understand them then.

Mr. Marlowe

The hon. Gentleman is quite right, I did not understand them. They did not appear to me to have much to do with what we are discussing. I want to go back to the Amendment which is divided into three parts. The charge set out in this Amendment against the Government is one of administrative incompetence, partisanship and lack of leadership. Those are the three components of this Amendment. I am not going to take up any time with the question of incompetence, because apparently we do not have to do that. Every right hon. Gentleman who sits on that Front Bench and makes a public speech advertises his incompetence and it is not necessary for us to labour the point. I just want to refer for a moment to the two other heads—partisanship and lack of leadership.

Let us consider in relation to the King's Speech the question of the Parliament Act of 1911. That, as we know, has been much debated during the course of the Address and I am not going over the ground again, but I was a little interested to notice that when the right hon. Gentleman the Lord President of the Council was speaking in his constituency on Monday night he dealt with this question. What was the only reason which I saw reported for this action? The right hon. Gentleman said that the House of Lords met in the Recess. That was his complaint against the House of Lords, and I suppose retaliatory action has to be taken.

Then there is a reference to steel in the King's Speech. The Government have shown themselves to be in a dilemma over this matter because, being faced with a crisis, they have postponed the nationalisation of steel. What does that mean? It means that they know that at this time they dare not put any industry into a state of inefficiency, and therefore the only logical conclusion is that hon. and right hon. Gentlemen opposite recognise that inefficiency follows nationalisation. It must be one way or the other. They cannot have it that they believe nationalisation makes for efficiency, otherwise at a moment like this they would nationalise the industry and get as much efficiency as they could.

Mr. Shurmer (Birmingham, Sparkbrook)

The hon. and learned Member is quoting hon. and right hon. Members on this side of the House. May I ask him during the course of his speech to quote correctly. He spoke of the hon. Member for Devonport (Mr. Foot) and what he said about bulk purchase. The hon. and learned Member said—

Mr. E. P. Smith (Ashford)

On a point of Order, Mr. Speaker. Is it in Order for the hon. Member to make a speech?

Mr. Marlowe

I have gone a long way past that.

Mr. Shurmer

Read HANSARD and see what it says.

Mr. Marlowe

I realise that the hon. Gentleman's mind does not travel very quickly and that he was unable to follow me.

I want very shortly to refer to the matter of leadership. During the Recess there have been some changes in leadership. I found them very interesting. Why they have been made I do not know. They certainly do not present to me any improvement on what we saw before we went away for the Recess. There is an important political aspect to this. Four right hon. Gentlemen have been dismissed, the Secretary of State for War, the Minister of Supply, the Under-Secretary of State for the Colonies and the Lord Privy Seal. It is very curious that none of those gentlemen had any private army behind him to keep him in office. I believe that this Government is not fully in the hands of the Leader of the party opposite. The position is that certain appointments have to be made whether the Prime Minister likes it or not, and I regard that as a very serious defect in the leadership of this country at the present time. [HON. MEMBERS: "It is not true."] If it is not true, why are the Minister of Defence and the Minister of Transport, both with a Co-operative army behind them, still there? We know them to be incompetent and inefficient, yet they are still there because they have the power of the Co-operatives behind them. There has been a change at the War Office—

Major Bruce

Would the hon. and learned Gentleman say when he is coming to the constructive part of his speech?

Mr. Marlowe

I said that I was dealing with the Amendment. I reminded hon. Gentlemen that the Amendment refers to incompetence, leadership and partisanship, and those are the matters with which I am dealing. There has been another change at the War Office. The right hon. Gentleman who is now the Secretary of State for War is obviously there because he had to be kept in some office. He had to be got rid of from the Ministry of Fuel and Power and had to be retained where he could not say why he had been dismissed from the Ministry of Fuel and Power. I understand that his first action as Secretary of State for War on the morning when he was appointed was, when the War Office car was sent for him, to order the pennant in front to be taken down. The right hon. Gentleman is quite entitled to do that if he so wishes, but I do not think he showed such sensitiveness when dealing with the flag of the National Coal Board. That was always going up, unlike coal production, but the pennant of the War Office is pulled down by the Secretary of State for War. I understand that the next action of the right hon. Gentleman was to have his telephone at the War Office taken off the War Office switchboard and put on the Whitehall Exchange, presumably because he did not want anybody at the War Office to hear what he was talking about on the telephone. I do not know what secrets the right hon. Gentleman has, but it does not seem to me that that is the proper way for a right hon. Gentleman to begin his office.

On the question of leadership, there is in the forefront the right hon. Gentleman the Prime Minister. I did not notice any enormous enthusiasm from hon. Gentlemen opposite when the Prime Minister addressed the House for the first time this Session, but I feel bound to record what is certainly my view and what I believe to be the view of many hon. and right hon. Gentlemen on this side of the House, that it was the most lamentable performance that has ever been given by a Prime Minister. This country, in a state such as it is now, cannot afford the luxury of being led by such an incompetent Prime Minister.

Another matter to which I wish to refer on the question of leadership deals with the right hon. Gentleman the Chancellor of the Exchequer. I am quite unable to understand why we leave the nation's finances in the hands of the right hon. Gentleman. I shall put before the House what I consider to be a serious charge against him. On Friday last he made his speech dealing with what had happened to the American Loan. He did not really explain why it had happened but gave a number of figures which I do not believe were intended to enlighten the House or the country. The right hon. Gentleman said: I take … the blame and … the credit."—[OFFICIAL REPORT, 24th October, 1947; Vol. 443, c. 400.]

That is the cry of every tipster on every racecourse. The right hon. Gentleman proceeded to put forward an explanation of his negotiations over the American Loan which can only have confused those to whom it was addressed. The point is important, and I shall refer hon. Gentlemen opposite to what the Chancellor of the Exchequer said on that occasion. Having found the disaster into which convertibility led him, the Chancellor of the Exchequer endeavoured, in column 399 of HANSARD of that date, to convince the country that he had always been against convertibility. He said that he had warned the House in the Loan Debate on 12th December, 1945, about convertibility. The right hon. Gentleman gave certain quotations from HANSARD to support what he called his warning. I am bound to say that those statements were misleading. Whether they were intended to be or not it is not for me to say, but the right hon. Gentleman referred to convertibility and then went on to give the quotations which anyone can see in column 399. It is important to see what the right hon. Gentleman said on 12th December, 1945, in this connection. It is necessary to remember that the speech of the Chancellor of the Exchequer on that occasion dealt with three quite different but closely related matters.

There was, of course, the American Loan Agreement, Bretton Woods and the International Monetary Fund. The right hon. Gentleman carefully divided his speech into three parts and, dealing first with the Loan Agreement, he said: As hon. Members will see from the Financial Agreement, it is proposed that this arrangement, in the form in which it has existed during the war, shall shortly come to an end, and that we shall revert to the prewar convertibility of sterling for current transactions. Later, I shall indicate how shortly it is to come to an end; but here I wish to emphasise that what we are doing is reverting, in this respect, to the prewar situation. We are not doing something which is fresh and new.

Then he went on to say: But the Agreement does help us to take the first step towards the much desired restoration of the convertibility of sterling. And there is considerable desire for this within the sterling area—let not the House be mistaken on this point. The restrictions on convertibility are not popular with our friends in the sterling area. They desire to see them loosened up. Their relaxation is not something demanded by the Americans only, it is also much desired by our friends in the sterling area. It is important, therefore, that we are enabled, under this Agreement, to take the first steps in that direction, through being helped to balance our current trading account at an earlier stage than would otherwise be possible."—[OFFICIAL REPORT, 12th December, 1945; Vol. 417, cc. 425 and 429.]

Those are the only remarks which the right hon. Gentleman made about convertibility while he was dealing with the Loan Agreement. In. the next column he turned to the second part of his speech, which is an entirely different matter. Then he said he would turn to the Bretton Woods Agreements, which he dealt with and then, ten columns further, towards the end of Bretton Woods, is the right hon. Gentleman's quotation which appears in last Friday's HANSARD.

If the right hon. Gentleman was ill-disposed towards convertibility, if he regarded it as a danger when he was dealing with the Loan Agreement in that part of his speech, that was the time to warn the country if he really believed that we ought not to make it a condition of the loan. I say that in what the right hon. Gentleman said on Friday, in dealing with this matter and in extracting, with great cunning, those quotations, he misled the House and did not give a true picture. I feel I can speak freely on this matter as one who was against the loan and who voted against it at the time. In spite of what the right hon. Gentleman said I was not misled, but I cannot help believing that many hon. Gentlemen may have believed it. I have taken a little longer than I meant because I believe it is important that what the right hon. Gentleman said on that occasion should be set on record.

Finally I want to know this: two right hon. Gentlemen in this Government, the Foreign Secretary and the present Minister for Economic Affairs, have declared themselves in favour of an Empire Customs Union. We heard today that there are probably to be serious inroads into Imperial Preference. Now where do those two right hon. Gentlemen stand? Do they believe in fostering trade within the Empire or not? If they do, it is their duty to say so frankly and not to be parties to whittling down Imperial Preferences. I warn this House that unless we stand solid with the Empire in our trade, we will do ourselves and the Empire great damage. The right hon. Gentleman the Leader of the House said yesterday that he thought this was a useful Parliament. Of course I cannot agree with that statement in all its aspects but I will agree with him to this extent, that this Parliament will certainly be a useful Parliament if it shows the follies and ineptitudes of Socialism and the utter incompetence of its leaders.

7.55 p.m.

Mr. Pargiter (Spelthorne)

I am sure that the hon. and learned Member for Brighton (Mr. Marlowe) will forgive me if I do not follow him closely. I understood that he was addressing himself to the Amendment but, so far as I was able to follow, he had little to say about finance. Therefore I may be excused if I try to get back to the problems with which we are faced today. I will come back to one point touched upon frequently, the question of houses. First, I think we must accept that if we cannot afford to buy timber, we can only have houses in proportion to the amount of timber that we can buy as long as timber is necessary for the construction of houses. It is important, therefore, that the programme of housing shall be so arranged that we construct houses where they are most needed. In that respect I hope the problems of the Greater London area will not be forgotten, for a housing problem has existed there since long before the war, and it has become more acute than that in many other districts. I hope also that in considering the priorities for the future, whilst recognising the importance of mining and agriculture, these areas which have been so long a problem will be considered also.

Next I would mention the problem of the road transport services of this country in relation to what one might term the rationing of material. We know how important it is that heavy commercial vehicles shall be exported, that they form a large proportion of the exportable surplus of this country, and very valuable exports they are. At the same time, it is also known that during the current year a large number of heavy commercial vehicles have been diverted to luxury coaches which ought properly to have been used for public service vehicles. I hope that in considering the problem of the allocation of materials and, indeed, of the allocation of the vehicles themselves, the great need of the public service transport vehicles of this country, equally goods and passengers, will be borne in mind, and care taken to see that the remainder are properly allocated to the needs of the country.

Whilst on the problem of exports, it seems to me that we want some knowledge in the White Paper of how the problem of exports in total in each industry is to be dealt with. I believe that in some industries they have been told that their quota of raw materials for home production will be governed by the amount that they send for export. Are we to have each individual firm or group of firms competing with each other in foreign markets, or are we to have a system of marketing which will provide that there is a single system for export marketing for each industry, rather than that one employer or industrialist should be cutting the throat of another in endeavouring to get a single market? It is highly important that we have to get the best price we can for the goods we send abroad. Therefore there must be some rationalisation so far as the export side of any goods from this country is concerned.

One of the problems with which I am mostly concerned, which is of the greatest importance, and which was not clearly brought out in the Gracious Speech, is that the difficulties with which we are faced are not merely that we have to work harder for a short time but that we have to work harder permanently everywhere to maintain the population of this country at the same standard of living. Perhaps not sufficient attention has yet been paid to that aspect of the problem. It is important to remember that we cannot hope that the vacuum in the markets will remain for ever unfilled. We shall arrive at the stage when we shall be in competition with other countries for existing markets and, when we reach that stage, it may well be that our standard of living will suffer considerably unless we find some means of overcoming it.

I want to know whether or not we are really getting down to the problem with which we are faced. If we cannot get any system of world control and some reasonable system of world government to deal with economic affairs as well as the problems that may lead to war, we ought to begin where we can. In beginning where we can, I would suggest that we want to consider the sterling area and, in particular, the Commonwealth, consisting of the Dominions and our Colonies, to see just how closely we can get together.

Just as it was necessary in one stage of our evolution and development that the children of the Empire should be released from their mother's apron strings, and the Dominions formed, so it is important that they should now be brought back into the fold more closely. We must recognise that, in the Commonwealth particularly, countries which were the producers of primary products are now endeavouring with all their energies to establish secondary industries, and those secondary industries are precisely the type with which we are concerned, and have been concerned over the last century. How this is to be balanced up as between members of the Commonwealth, I do not know, but at least some effort must be made in order that we may clearly understand what each can produce, in order that each may play its part for the general wellbeing. It is understandable that they should have adopted this policy of endeavouring to establish secondary industries, because of the disastrous fall in pre-war years in the prices of primary products. It is understandable that they could not afford to be left in the precarious position in which they found themselves. That was not the fault of this Government, but largely of hon. Members opposite, who called themselves savers of the Empire, but did nothing to make people Empire conscious, nor to maintain prices which could be sustained.

If we cannot get a world government, we ought to get some sort of government for the Empire more or less constantly in session studying, the problems with which we are faced in order to meet the inevitable competition from the dollar countries. If we can do that, we can begin to show the world the way to ordered progress. It is not a matter of whether or not it is capitalism or Socialism. It would be Socialism in practice, all countries working together to an economic plan. We want an economic plan, not only in this country, but for the whole of the Commonwealth, and we want a permanent body in force to see that the plan is carried into effect. I hope we shall get something of that kind. I believe the Empire can contribute very largely towards the well-being and safety of the world of the future, but we have to begin to do it now, and in the absence of dollar countries or other countries wanting to come in on a good economic basis with us, we have to do it ourselves. From this I believe we can build something to which other nations will be gradually attracted, and in spite of the failure of the League of Nations, and what appears at the moment to be the road to failure of the United Nations, we may really build something worthwhile for the future. These are times of great adversity, but times of great adversity are equally times of great opportunity. I am quite sure that this country will take the opportunities which are presented, and that we shall weather the storm with which we are faced, and show the way to the world of the future, and from those opportunities bring out the inherent courage of our people.

8.4 p.m.

Lieut-Colonel Sir Thomas Moore (Ayr Burghs)

Although I have listened to practically every speech that has been made in this Debate, I realise that my time is very limited, and I will, therefore, only comment on two of them. The first is that which was made by the Prime Minister on Tuesday last week, and the second is the speech made by the Minister for Economic Affairs. Although my regard for the Prime Minister, and my respect for him, is very definite and very sincere, at the same time I think his speech last week was woefully inadequate to deal with the urgency and gravity of our affairs. He probably has another opportunity tonight, and he may take it in order to give us some further light and further guidance as to what really is his intention to implement the best parts of the Gracious Speech. I suppose the right hon. Gentleman was, possibly, somewhat handicapped by the prospectus he issued at the General Election, and now finds he cannot carry out. He remembers those various promises he made, and, as an honoured and distinguished figure in the Coalition Government, he must have known that those promises were incapable of fulfilment.

Mr. Shurmer

What promises does the hon. and gallant Member mean?

Sir T. Moore

I am not going to harass the House with the cries of "Labour will get you that house," "Labour will get things done "—[An HON. MEMBER: "We are getting them done."]—" Vote Labour and all the world lies open."

The Prime Minister (Mr. Attlee)

May I ask the hon. and gallant Member to give chapter and verse for that? In every speech, or broadcast, I made, in every instance I stressed the difficulties and dangers of the postwar period, and I never suggested for one moment that things would be easy.

Sir T. Moore

Of course I accept what the right hon. Gentleman says. At the same time, he must accept some responsibility for the posters that were plastered all over the country, and which entirely deluded the people who voted for him. I do not want to make any personal attack on the Prime Minister, because, as I say, I have a personal regard and personal respect for him, but he cannot be allowed to forget the promises under which he induced the public to vote for himself, his party and his programme.

Mr. Shurmer

rose—

Sir T. Moore

I am not going to give way. Now I come to the Minister for Economic Affairs. In many respects his speech was a notable one, and in some respects a noble one. For the first time for two years the real truth was revealed, and it was also revealed in the language of leadership. My only criticism of that speech was that it was made exactly two years too late, and also that it was made by him, instead of by the Prime Minister. Again I wish to say that I hold the Minister for Economic Affairs in high respect. I believe him to be an honourable man of a high, even chaste integrity, but he suffers from many disabilities, his past, his colleagues and his misguided loyalties, and however much we may appreciate his sentiments and admire his exhortations, one's mind inevitably travels back to ill-considered statements, lost opportunities and unwarranted assumptions.

But to come to the immediate present, and that is more important, I cannot understand how the Minister for Economic Affairs can possibly approve the terms of the Gracious Speech, if, indeed, his speech of last Thursday meant anything. They are irreconcilable. If the Minister meant what he said in that appeal, that co-operation and working together was the only way in which we could solve our difficulties, he could not have given his wholehearted support to certain parts of the Gracious Speech. If the Government, of which he is now the chief pillar, agree with my analysis, and desire to ensure the success of the Minister's appeal, there are certain steps which they must take. The first of course is to call in the false prospectus and apologise for it. Secondly, they must withdraw any further nationalisation proposals, since otherwise their appeal for the co-operation of all parties is purely cynical sophistry. The third thing they should do is to withdraw then-intention to alter the Parliament Act, 1911, since even the Archbishop of Canterbury has stated that it will split the country if they pursue that Measure.

Next, they must withdraw all those pamphlets such as the "A.B.C. of the Crisis," which is a deliberate attempt to pass the blame for all our affairs on to the wicked Tories, who incidentally have not been in office for 18 years but of course hon. Members forget that—[An HON. MEMBER: "Oh"]. The hon. Member must really inform his ill-judgment or ignorance, and find out what are the facts before he shrieks "Boo" or "Oh." The next thing is to issue instructions to the Socialist propaganda department to cease their continued lies about the three million unemployed and the homeless population who wandered about under Tory administration in the inter-war years, when they know full well that the Tories built houses while the Socialists merely lay foundations, and that the only time unemployment ever rose to nearly three million was under the Socialist Government of 1929. Finally, if indeed we are to obey the instructions of the right hon. and learned Gentleman and try to save the country by our efforts, then both the Government in general, and his colleagues in particular, must be restrained from making these constant and vicious attacks, both by speech and by legislation, against every one who does not belong to organised labour.

I turn briefly to the question of leadership, which is referred to in the Amendment. It is rather unfortunate that the Prime Minister, with that tidy mind of his, seems to think that every problem can be solved by an Act of Parliament, that every shortage can be met by fixing a target, that every obstacle can be overcome by making a plan. We all know that it just does not work like that. Acts of Parliament do not make saints out of criminals, or vice-versa, that targets for coal, houses or steel do not produce themselves, but that skilled artificers, skilled masons and skilled mine-workers are required to do that, that plans must be reinforced by knowledge, capacity and experience, instead of being filed in Whitehall, as most of them seem to be.

There are two or three points with which I must deal in regard to the right hon. Gentleman's Ministers. I think that they and the Government are guilty of three main defects. One is muddled thinking, another is lack of foresight and the third is general incompetence.

Mr. Rankin (Glasgow, Tradeston)

Is that all?

Sir T. Moore

Yes, that is pretty comprehensive. Muddled thinking lay behind their action in introducing nationalisation before they had put the country on its feet and restored it to the prosperity in which it could have afforded to make such experiments. I do not complain about the Government for introducing nationalisation. They promised that in their Election addresses, the country were warned, the country voted for it, and the country, therefore, must suffer. What I do blame them for is their introduction of nationalisation at the wrong time, before they had got the country prosperous. As for lack of foresight, we heard from my right hon. Friend the Member for Bromley (Mr. H. Macmillan) how a year and a half ago they were warned about the wheat shortage, they denied it but suddenly the shortage was upon them, and then there was panic and bread rationing. A year ago they were warned of a fuel shortage, but it was denied. Suddenly it was upon them, and again there was panic. Coal was denied to factories, 2,000,000 people were thrown out of employment and the public were left shivering and shuddering before cold and empty grates. Then there was the dollar shortage, denied by the Chancellor. Suddenly it was upon them, and milk was cut, meat was cut, bread was cut, petrol was cut off, all in a panic. Then came the final panic of the Prime Minister himself about six weeks ago, when he realised that the patience of the country was exhausted, and he began his panic shuffling of his incompetent team. Leopards retain then-spots whether they stay in the same lair or not, and the incompetence of the Ministers of the present Government remains constant.

I am now going to draw to an untimely close—[HON. MEMBERS: "Hear, hear."]—but if I get many more cheers from hon. Members opposite I shall be strongly tempted to go on. There are only two Ministers really responsible, by their polices, for getting us out of our difficulty. They are the Chancellor of the Exchequer, on finance, and the Minister for Economic Affairs, on production. In regard to finance, of course, we know that we are dollar bankrupt. The Chancellor told us that over the radio a few weeks ago. We have nothing except the £600 million gold reserve and even that is being rapidly eaten into. The Government have no solution except general want and general misery. Therefore, we come to the question of production. Owing to the conditions the Socialist Government and Party have created themselves, the position is very difficult. For 15 years they have conducted a vicious and unscrupulous propaganda tying up the wicked employer with the wicked Tory. If there was an accident in a mine it was due to a wicked employer; if there was a drought on the farm it was due to the wicked employing farmer.

The result is they entirely bemused the country, and now the boomerang has come back and the miner cannot understand that there is any essential difference between the incompetent and distant National Coal Board and the wicked employer. It is all very confusing to the mineworker just now but, no doubt, a way out will be found. The way needs to be found soon. Otherwise, there will be no money left in the kitty to pay the National Coal Board and its many employees.

My hon. Friend the Member for Devizes (Mr. Hollis), in his notable book, stated that owing to the acts of the Government and owing to the situation they created, there were now only two methods by which production could be increased. The book was, "The Rise and Fall of the Socialist Government." It is an excellent book. I recommend it for the study of hon. Members opposite. They will see their future demise set out very clearly. There are two alternatives—the carrot or the stick; that is the incentive or the whip. We Tories believe in incentives. We believe in every individual getting a fair reward for his work whether it is by brain or brawn. We believe in more goods in the shops for the housewife. We believe in better and more substantial food with less points for the family. We believe in prettier clothes for the women with fewer coupons. All these are the things which will increase production. I admit that it will take every dollar of that £100 million—if we can get it. It will take all the help we can get under the Marshall Plan—if we can get it. I am not so sure, however, that we can persuade the American worker to work six days a week to enable our chaps to work five days a week.

I would suggest that we should apply one coercion, if I may call it that, or one compulsion, to our general incentive policy. It is that people shall only be paid when they work and that they shall not be paid for doing nothing, beyond, of course, the basic standard of living. That reminds me of the statement made by the Foreign Secretary when he said that if he had 40 million more tons of coal annually all his problems, diplomatic and economic, would be solved. I am all for paying the miner well. It is a hard and isolated task. But what I have said applies to all industries. Give the people good salaries, wages and amenities, so far as we can afford, but make sure that those benefits are denied to them when they strike or refuse their labour without negotiation and without proper reason. I believe that there is still a chance for this country—[HON. MEMBERS: "Hear, hear."] Yes, but success will depend on hard work, constant hard work, and upon the co-operation of all concerned. It will not be achieved under the policy of the present Government unless they decide now, immediately, to change their whole philosophy and put country before party. If they will do that, I believe that we can still bring back prosperity and happiness and make our Britain mightier yet.

8.20 p.m.

Major Vernon (Dulwich)

I hope the hon. and gallant Gentleman the Member for Ayr Burghs (Sir T. Moore) will forgive me if I follow him only on one of the subjects which he raised, and that is the subject of co-operation. I was very interested in his lively and entertaining speech, especially when he dealt with cooperation. The Minister for Economic Affairs has asked for the co-operation of the whole nation, but the hon. and gallant Gentleman says, "Co-operation? All right, but on these conditions—that the Labour Party policy shall be withdrawn, that the principles of Socialism shall be dropped, or postponed, and that everything with which I disagree shall be removed." On those conditions, we may have his co-operation. I am afraid that the hon. and gallant Gentleman is really asking for too much, and that we shall have to get along, regretfully, without his assistance.

Sir T. Moore

The Minister appealed for it.

Major Vernon

On this question of cooperation, I want to offer the co-operation of a section of the community which has hardly been mentioned in this Debate—the scientists and technicians. My association—the Association of Scientific Workers—has 17,000 members, and a great many more people share their views, although they are not actually members, and this large membership, in general, feels a sense of frustration in that its energies and abilities are not being used and the potentiality of this reserve of energy and intelligence seems hardly to be recognised. All the emphasis is on harder work, longer hours, and even putting women back into industry. It is all on the quantity of work which is deemed to be necessary to help us through the crisis. But I believe that the real emphasis should be placed on the quality of the work. It was not the number of navvies whom we had building the railway embankments and cuttings that made Britain great in this direction, but the high quality work of engineers like Watt and Stephenson and the rest, who increased the efficiency of the labour force. I believe that our efforts should be directed towards increasing our efficiency and so increasing our labour force without necessarily adding to the toil, labour and distress of hard work.

I am not asking for additional money to be spent on research. That is a long-term programme, and our problems are immediate. I am not asking for gadgets that might be lying around and might usefully be adopted. That is a slow sort of progress. What I am asking for is that scientific methods should be applied wherever they can be applied and wherever the result which can be produced will be most rapid and most immediate. Perhaps I had better give a few examples. In the matter of coal, the efficiency of the coal used in the domestic grate is somewhere between 21 and 23 per cent. A great deal of the coal which is burned reaches an efficiency rate of only 15 per cent., but in industry we sometimes get 30 per cent. But there is plenty of knowledge about the means of using coal and increasing its efficiency which might be applied. Various calculations have been made about methods of conversion, and some of them, I know, require capital expenditure, while other calculations work out at very little capital expenditure indeed. We can raise the efficiency of coal by 10 per cent., thus making 90 tons of coal do what 100 tons did before. We should get 20 million tons a year for nothing. If we get the same output with a reduced quantity of coal, we not only save labour and transport, but we leave coal lying in the ground for future use.

Food is another commodity in which great economies can be made. During the Recess, I went round a farm in my village with a young farmer who had no academic education, but who had taken very seriously the advice of the county agricultural committee. By drying young grass and by ploughing his meadow land and reseeding it, he was able to feed the same quantity of cattle and get a greater quantity of milk and meat on half the area of his farm, and to use the other fields for work. I am not saying that this can be done everywhere, but this knowledge is available for us if we care to use it. What, in fact, do we do with grass? We use the same treatment in regard to it as was used in 6,000 B.C. The grass is allowed to grow up past its nutritional stage, and past the stage where it can be stored through the winter. We know how to store the nutritive qualities of grass, by fermentation or by drying when younger, and so to improve the output from a given area of land. That is one example.

Herrings are another example. The research station in Scotland says that the herrings are in the sea, and that we could get twice the quantity out if we took the trouble. We could preserve them by freezing and by the extraction of the various products, and it is estimated that a food value equal to the whole of the nutrition which we derive from meat, in fat and protein, could be derived from them. What we want is a complete survey from outside of the chemical industry as a whole, for the elimination of waste, and for the introduction of new processes which will be more efficient than the old one.

Our trouble is that we have not people free from administrative duties who can give their whole mind to thinking. Our Government Departments are overworked. The individuals responsible for this kind of work have an enormous number of other things to do, and the really important thinking which needs to be done can only be done by people who can give their whole time to the job. A practical example of this is the operational research in wartime. I am not talking about the great inventions—Fido, Pluto, Radar, and those things—which were simple inventions of themselves; I am referring to the co-operation between eminent scientists and certain high officers in the Forces whereby consultation took place, and the scientists were asked to solve, or make suggestions about, particular operational problems. The results obtained in Bomber Command and Coastal Command are very well known, and were extremely important. That mechanism of national research—scientists being available for consultation on the really fundamental problems of the day—has broken down since that time.

With regard to the chemical industry and the production of iron, the blast furnace of today is the lineal descendant of the mud-oven and the bellows which were used by the first people who made iron in early days. It may be—I do not know—that some other process might be more profitable nowadays. To find out, we need a certain amount of concentrated thinking by the ablest people over a period of time. I learned recently that the chemistry of iron ore was unknown until about six months ago. Again, it may be that large changes in the production of iron may be possible if only we can set people aside, and give them the opportunity to carry out investigations.

So much for physical science. I am not only anxious that science, which is already well established, should be used, but I am also anxious that scientific knowledge should be applied to regions where it has not been applied very extensively before. I refer to the social sciences. The same orderly methods of thought which have been applied to physics for 300 years and to biology for about 100 years will produce important results if applied to the social sciences, as they are called today. Human beings and the way they think are just as much a suitable subject for science as atoms or other living creatures. Human organisations can also be treated in this same orderly fashion with excellent results.

Some work has been done on administration, and, from the accumulation of a vast experience of big organisations, a few simple generalities can be extracted which can be used for testing the efficiency of other organisations which exist. This again is work for which opportunities should be given to the people who can examine these matters with complete detachment. One instance of social science which I noticed a little while ago was obtained by reading the biography of Lord Haldane. In the logo's, coal strikes were prevalent and the country was concentrating much attention on the problem. There were the Sankey Report and the Samuel Report, and, although it was not Lord Haldane's particular province, he writes in his biography what he thinks should be done about the problem.

His reforms in the War Office are well known. Characteristic of those reforms was the training of the junior officers to take care of the welfare of the men. He said that in the coal industry the training of the junior command to make its object in life the welfare of the miners, would be the clue to the solution of the coal problem, whether under nationalisation or private ownership. It is that kind of thinking and approach which would produce excellent results in very many fields of our activities. In these times of great difficulty, when increased production is so essential, our hidden reserve is the intelligence, the scientific training and knowledge of our people. Hard work will carry us a certain way, but it is the quality of work rather than the quantity which needs so much more attention.

8.33 p.m.

Mr. Douglas Marshall (Bodmin)

I have six minutes in which to make the case which I wish to put to the House tonight. My right hon. Friends the Members for Woodford (Mr. Churchill) and Bromley (Mr. H. Macmillan) have already covered the broad aspect. Therefore, tonight I do not wish to go into the question of broad policy. No doubt hon. Members will have noticed in the Gracious Speech that when mention is made of agriculture, the following words appear: My Ministers will give all possible help to those who work on the land. No one agrees more fully with that object than I, but is there any reason why there should not have been added the words," and who fish in the seas "? There is no hon. Member in this House who is not concerned with the production of food. A great contribution to our food production can be obtained from our seas. What I wish to emphasise tonight is a matter which is causing great anxiety in the fishing industry and those concerned with the production of sea food—namely, the over-fishing in both the North Sea and off our West Coast.

A short time ago there were meetings upon this very matter, and the nations concerned cat down together and discussed it. Prior to 1939, two thirds of this fishing was, in fact, done by ourselves and the Netherlands, and one third by Germany. The war has altered that. We are no longer that size; we have lost a large part of our fishing fleet. Denmark has taken the place of Germany, and, indeed, we must get an agreement that these seas will not be over-fished. At the present moment small fish are being landed and catches have dropped considerably, and on that account great anxiety is felt. I appeal to the Foreign Secretary, although he is not here tonight—I readily understand why he is not here—but I appeal to him to do everything he possibly can to get ratification of the Convention.

Now, as to the West Coast. In this House in the last Session I asked a question about the "Spanish Armada" that has come to fish off the West Coast. There has been over-fishing off the West Coast, and that is causing grave anxiety. The Spaniards came originally to the conference. When, however, at a later date a standing advisory committee was set up, the Spaniards, on that occasion, were not invited. Surely, it was a frantically stupid thing not to include them. We must get an agreement that we are not going to over-fish those seas. I do hope the Prime Minister is taking notice of this, because this is a matter which affects our food supplies, and food is of vital importance. Every form of food that can be got is needed. Also, it so happens that our nation, by its very geography, from time to time survives because of the skill of the men who man our small ships.

Therefore, we have these two points that all should always bear in mind—first that the ports of the United Kingdom must be alive, throbbing with the work that they perform; and secondly, that we must have skilled men to man the ships sailing from those ports, who save us in times of danger. We can keep the ports alive and maintain the number of our fishermen only by maintaining the strength of our fishing fleet—and we cannot maintain the strength of our fishing fleet unless the fish are there in the sea to be caught. I do hope the Prime Minister will take due notice of that. I feel quite satisfied that, if the Foreign Secretary will apply his mind to this point, it will be in the interests of the nations that fish those seas. Surely, a reasonable agreement can be made in the interests of all nations.

In the few moments that are left to me I want to raise one other point, and that is "headless" cod. Hon. Members may know that the Ministry of Food insist that the cod is landed headless. The heads that are cast away could make good fertilisers. The fact that the men have to fish for a longer period means that the fish, when they are landed, are not so fresh. Thirdly—and it is a very important matter, the details of which I have not time to go into tonight—this practice of casting away the heads does mean polluting the sea bed. The hon. and gallant Gentleman the Member for Dulwich (Major Vernon) referred to the scientific approach, and I sincerely trust that the scientific approach to these problems of the fishing industry will be considered, particularly to this matter of the pollution of the sea bed, which can lead to very great harm.

I said, Sir, that I should keep within the time that you have so kindly allotted to me, and I will finish upon this note, We are passing through a grave and anxious period, in which it is necessary for all to work as hard as it is possible to work. I have referred to my two right hon. Friends who have covered the wider picture, which I have not time to discuss. The hon. Gentleman the Member for East Middlesbrough (Mr. A. Edwards) yesterday also painted a picture of the very inefficient administration of His Majesty's Government, which is, indeed, worrying. I sincerely trust that this drab affair will not make us even drabber still.

8.40 p.m.

Mr. Austin (Stretford)

I appreciate that in the short time which I have at my disposal I shall have to confine myself to a very few points. I hope, therefore, that the hon. Member for Bodmin (Mr. D. Marshall) will forgive me if I do not follow the line he has taken. I wish to refer to the speech made yesterday by the Leader of the Opposition. I deplore the fact that it was barren and devoid of constructive purpose; and, in fact, as usual, the Leader of the Opposition had to substitute abuse for a policy. I say only this to the Leader of the Opposition and to responsible ex-Ministers sitting on the Opposition Front Bench. Their time would be better occupied in devising and formulating an alternative policy to Socialism—which has been put before the country by ourselves in "Let Us Face The Future" and in our programme—rather than inciting forces in this country and America to war against the Soviet Union. I am certain that there is more to be gained for humanity by thinking in terms of universal peace than in terms of incitement to war. When I went to the Tory Party conference at Brighton, I was tremendously disappointed. In fact, a Manchester newspaper, commenting on my appearance at that conference, did so under the headline "Cuckoo in the Nest." Had there been any semblance of a policy at that conference this particular cuckoo might have laid an, egg. But there was no policy at all, and not the least appearance of one.

I now wish to refer to two points in particular which have been troubling me for some time. The first is that of food subsidies. I want to make an appeal to the Government in regard to this question, and therefore I am very glad to see the Minister of Food in his place. A little while ago in the country I was reported as having said in connection with food subsidies: It is no good talking in terms of academic theory about economics when one does not know the difference between a full and an empty belly. I stand by that remark. I want the Chancellor of the Exchequer and the Minister of Food to go through a household budget" and to see what a difference the removal of food subsidies would make to a working-class housewife. The answer, so far as the Chancellor is concerned, is not to remove the food subsidies but to find taxation elsewhere. In taxing the middle class, the Surtax payer, or those who earn over £1,000 a year—

Mr. Lyttelton

Why not £1,000 a year?

Mr. Austin

There is no significance in the £1,000 If we tax those who can afford to be taxed we may hurt them by denying them certain superficial luxuries; they may not be able to go to the. cinema or theatre so often; they may have to do without fur coats for their wives more than once a year. We may hit them, but we hit them in their pockets. What I want to impress on my right hon. Friends is that if we remove the food subsidies we hit the working-class where it hurts most—in the stomach, and we dare not do that. I make this appeal to the Government Front Bench tonight. If they embark on a policy of reducing the food subsidies, they are asking for a certain amount of opposition from their own ranks. It is all very well for us to be given assurances that this is not taking place, but the Chancellor, in his Budget Speech in April last, gave an indication that he intended to embark on such a policy, or at any rate there seemed to be a threat to food subsidies. Since then many commodities have had subsidies removed. Dried eggs have gone up by 9d. a packet; they have been taken off jams; I understand fish has gone up from 5d. to 7d. a lb., and a little while ago sugar went up by 2d. a lb. That, in fact, is the removal of subsidies. In the field of textiles, blankets went up by 15s. a pair a little while ago, which may not seem very much, but to a working-class couple is a burden they cannot afford. Let it be understood that the function of taxation is to equalise wealth and to lessen the burden on the working-classes. If there is any tampering with food subsidies, then the whole structure of wages and prices will have to be looked into afresh.

Another question which interests me is a question I raised on the Adjournment in May last, namely, that of deserters. Aptly enough, it was raised at Question Time today. I was not permitted to make the point I wanted because it was out of Order. In three or four weeks time, we shall see Princess Elizabeth and Lieutenant Philip Mountbatten married. It is going to be an occasion for joy in the Royal family and in the hearts of many of our people. When we think of the emotion of those in high and exalted families, we ought also to remember the emotions of those at a lesser level. I am referring to the families of those men who are unfortunately classified as deserters. I suggest to the Government that this is the appropriate time and occasion for making some gesture of mercy to those lads who, in many cases through no fault of their own, became deserters. It must be remembered that most of these men went into the Forces just as good, honest, and decent men as Members of this House. They are entitled to be given an opportunity to be rehabilitated again in civilian life, and to rejoin their loved ones.

I ask the Prime Minister whether he will not consider some remission of sentence in the case of those men who are now serving a term of imprisonment, and whether, for those who have not been apprehended, of which there are something like 17,000–and it does not look as if they will ever be apprehended—compelled in many cases to live a life of crime, some relaxation in the conditions of surrender cannot be permitted. It is a small matter affecting something like 17,000 men and their families, but it is symptomatic of a great many other humanities and it should be given our consideration.

8.48 p.m.

Mr. Oliver Lyttelton (Aldershot)

I do not think anyone who has listened to this Debate all through could have failed to notice the great change in tone which two years of their own rule have brought to Government spokesmen and their supporters. Gone are the buoyant phrases, that overweening confidence and cock-sureness, we used to associate with the Chancellor of the Exchequer and the Lord President of the Council. Today is a day of alibis—Europe has recovered much more slowly than we expected; we did not foresee this; somebody would have done much worse; last winter was much too cold for our plans; the economic winter has been much too cold for our policy; the Press have misrepresented and sometimes gone so far as to misreport. These are all the familiar excuses and whinings of people who know that they have failed the country which elected them.

The Minister for Economic Affairs said last week that the unbalance of world trade—that is to say, the increasing American production, as against the non-increase in the power of the rest of the world to absorb it—was beginning to make itself felt before the first world war. It seems to be 1947 before the Government found this out for the first time. The ancients called the insolence of self-satisfaction, the flaunting of human success in the eyes of the gods, Hubris. They thought it was followed by "Nemesis," and unfortunately the present Government have not escaped the operation of this law. Into the Socialist world of make-believe and cloud cuckooland policies, inexorable facts have made their very unwelcome intrusion. It is rather like what happens in "Macbeth." The inmates of the castle are living in an entirely unreal world, divorced from all ordinary standards of life. Suddenly, there comes a knocking at the gate. It is Nemesis coming in—

Mr. Shurmer

Open the door, Richard.

Mr. Lyttelton

The hon. Member, whose principal contributions to our Debates are a series of irrelevant, and very often, rude interruptions, might let me make my own speech. The speech of the Minister for Economic Affairs marks the momentary—I sincerely hope it will be more lasting—victory of realism in the Cabinet. For two years most Ministers, basking in the sunshine of a large Parliamentary majority, and of still larger American and Canadian Loans, extended to them by shabby moneylenders, as the hon. Member for Nelson and Colne (Mr. S. Silverman) described the Americans, have done no more than repeat the old watchman's cry, "All's well." Nobody in the economic field has so far got to grips with the problem. The Chancellor of the Exchequer is, I note, not in his place yet. He will be later, probably. If he is not he will miss something good, because I am going to disinter from their fortunately early grave one or two of his purple passages. At the Lord Mayor's dinner—an excusable moment for expansion—on 16th October, 1946, he said: Two years hence we shall have overcome the worst shortages which vex us now—of food, clothes, coal, and as well, and in large measure I hope, houses. In the calmer atmosphere of Portsmouth, on 19th October, 1946, the right hon. Gentleman said: I have been able, as Chancellor, to meet all demands on the public purse literally with a song in my heart. If we keep going together as we have since V-J Day, the shortages and frustrations which still afflict us will disappear like the snows of winter, and give place to the full promise of springtime. Apart from the somewhat glutinous nature of the oratory, the extreme triteness of the image, does that sound like the speech of a Chancellor who was in charge of a Budget of £3,000 million? That is not all I want to quote. On 25th September, 1946, the right hon. Gentleman said in Ottawa, that the national credit in Britain had never stood higher than it did under the present Labour Government. He stressed that the test of the Government's credit was the low interest rate of 2½ per cent. on long-term loans. He said that it was the lowest rate ever paid by a British Government. Well, there was a 2½ per cent. issue in 1946 which was dealt in at 99⅝, and the price of which today is 88⅛—not a very good testimonial—

Mr. Stokes

Better than the old Consols.

Mr. Lyttelton

I would like now to turn to the Lord President of the Council. He, of course, employs rather less expansive oratory, and puts in a number of contingency clauses which his experience of Socialist mistakes has led him to suppose are necessary in all public statements. He said: It is necessary only "— I am sure this is very distasteful to hon. Members opposite, but I will be quite fair— to glance at the huge queues of necessary demands waiting to be met to realise that 1947–I want to be quite frank and not to mislead you—will also be a year of tight supplies and lack of elbow room in the whole economy. It will, however, be a year in which we are beginning to draw the dividends from our efforts of 1946. There is another passage: 1947 will be the first year in which we shall all be working on something like a peace footing. These statements have rather come home to roost.

Lastly, the Prime Minister, in replying to a speech of mine in February, 1946, said that I was much too gloomy, and when I re-read the speech I felt that it should be criticised for underdoing rather than overdoing the gloom. I think that I am right in saying that the Prime Minister on another occasion said that his Government were not going to be "a one-man show." In that respect, his hopes have certainly been fulfilled. Of course, the implication which he wished to make was that the Coalition Government was a one-man show. That was perhaps a little hard on himself. It was a little hard on the Lord President of the Council, and it was a little hard on the Foreign Secretary. I hope that I am not being indiscreet, but I can tell the House on the very best authority that the Foreign Secretary himself thought that the Coalition Government was at least a two-man show. I trust that this will not be regarded as a breach of confidence. But what is true about the Coalition Government is that it was a one-policy show, and the most fervid supporters of the present Government would hardly claim that.

Mr. Stokes

There was no policy in that Government; it had only an objective.

Mr. Lyttelton

There are many interesting interventions from some one who gave so much help at that time.

I sympathise with this difficulty in discerning the present Government's policy in the new Minister of Supply., He is out of the same market in which I used to be engaged. On the very day on which he was paying a tribute to the record output of steel and proclaiming this record, his friend the Minister of Health was using the words which have been the subject of some controversy this afternoon. I must say that the liaison here, as always with this Government, has been very bad indeed. I sympathise. Perhaps the Minister of Supply had not time to get in touch with his colleagues, but I should have thought that some liaison could have been arranged through the board of the "Tribune" so that those two Ministers could have sung, not in harmony—that would have been too much to ask of the present Government—but in some kind of unison; but that has not come off. The Minister of Supply has backed the right horse early in his Ministerial life because his point of view, and not that of the Minister of Health, has been supported by the right hon. and learned Gentleman who, in a carefully prepared speech in which he did not, quite rightly, leave his notes for very long, paid the very warm tribute which has been quoted today to the magnificent job of production being done in the iron and steel industry.

I cannot help being struck by the irony of the situation in which the Government find themselves. For years they have expatiated on and explained that the economics of scarcity were the root of all evil. I feel pretty sure that they usually said that these economics of scarcity were the invention of the wicked Tories and were promoted for their own benefit. It is a line which the Foreign Secretary in his more expansive and unbriefed moments is very fond of running. Yet what an irony it is that these very men should, largely by their own follies, have compelled themselves to impose economics of scarcity of such severity that it is difficult today to remember that there were ever times of plenty. Another irony is that the Socialist Government proclaim that they are believers in fair shares for all. So am I, to some extent. [Laughter.] Hon. Gentlemen will see what I mean. The extent to which I believe in fair shares for all is fair shares of plenty. What the hon. Gentlemen who laughed mean is fair shares of misery for all.

Mr. Shurmer

You know nothing about misery.

Mr. Lyttelton

Ministers are accustomed to saying that part of their belief is fair shares for all, but how does that work out over the basic petrol ration? Whatever the savings we have to make in this or that commodity—and in our present straits we ought to know that they ought to be considerable—it must always be bad administration to cut one section of the population off some commodity altogether and it is a travesty of the policy of fair shares for all. I notice that there is not quite so much laughter at this moment. The abolition of a thing like the basic petrol ration affects only that part of the population which is unlikely to support the Government.

Mr. Shurmer

It is the working man who is inconvenienced by the abolition of the basic petrol ration.

Mr. Lyttelton

There is a great irony, too, in the multilateralism—now we are getting into technicalities and jargon—of the Minister for Economic Affairs. He believes, as I do, in the expansion of trade and multilateral and multifarious trade, but he is obliged to say in the same breath that we must only buy from abroad—this was a point brought out by the hon. Member for Newark (Mr. S. Shephard)—the absolutely essential imports, that we must have an iron curtain of our own, that no Englishman must travel abroad except on a pittance, and also that we have to increase our exports by £31 million a month above the volume to which they have now attained. I suppose that in modern jargon the right hon. and learned Gentleman's multilateralism might be described as multilateralism on a unilateral basis.

But of course the right hon. and learned Gentleman is not really announcing a plan or a policy. He is merely stating with candour—that candour does him every credit—that His Majesty's Government now propose to do the only thing left to them, which is to bow to the facts. These measures are not part of a voluntary policy which has been thought out. They are involuntary actions which have been imposed by necessity, and these grim necessities are to a great extent of their own making. When the family solicitor goes to the household and says, "You have to sell the furniture and quit the house and take something smaller because you cannot pay the rates," that is not a housing policy, but—

Mr. Stokes

That is a landlord's principle.

Mr. Lyttelton

—that is simply bringing the household face to face with the facts. That was a typical idiotic interruption. The Minister for Economic Affairs is well adapted by training and I think by appearance to play the part of the family solicitor in our national affairs just before the creditors petition.

Let me examine some of the positive measures that are now necessary. The first is the immediate arrest of inflation and the reversal of the present monetary trend. The Minister for Economic Affairs acknowledged this necessity in a notably courageous passage in his speech. He was talking about the curtailment of capital expenditure when he said that it was necessary to bring about a measure of deflation. So, as far as I know, this is the first time that the word "deflation" has found itself in the vocabulary of a Socialist Minister, but we must not be afraid of words. In a time of depression, of falling prices and receding business activity, inflation may be highly beneficial if it is controlled, and equally in a time of scarcity boom such as we are in now deflation may be equally beneficial. The monetary policy is the bloodstream of the economic body, and unless the bloodstream is purified, all the efforts of the Minister for Economic Affairs, the industrialists, entrepreneurs and the workers will be frustrated, and, at the same time, the social services on which every one in this House of all parties pride themselves as Britons will become a mere mockery. I have seen inflation at work at very close hand, and I can remember in the 1920's when the whole capital of the German Government before the war would not have sufficed to buy a man a ticket from Frankfurt to London.

If a man gets drunk every night of his life, it is no good trying to give him pills and purges, Swedish exercises, cutting off his meat ration or even depriving him of his basic petrol. The only way is to cut off the drink, and inflation is the drink of the economic system. The greatest paradox of all is that it is the doctor who gives the patient the liquor. It is the Government in the modern world which creates and controls the volume of money in circulation. The growth of bank deposits and currency notes in circulation has gone like this—in January 1946–I will lump the two together—they amounted to £6,345 million, and in August 1947–the last figure I have—they amounted to £7,311 million, or an increase of about £1,000 million.

Unfortunately, these figures do not by any means tell the whole story. For the last two years, the Chancellor of the Exchequer has had a powerful counter to inflation put into his hands. That is that we have received, without paying for them, 3,150 million dollars worth of goods and services. This is not a controversial point; these figures are beyond controversy. These goods and services have been bought and paid for in sterling in this country by the buyer of machinery or the film goer or the smoker or the consumer of food, and we have received these goods without paying for them. So within this country they have acted as a powerful sponge in mopping up the surplus purchasing power of the individual consumer; in other words, there are such things also as unrequited imports. We have had them in a very large measure and, to the extent that they now have to be paid for, to the extent that the loan is now exhausted, they will no longer be the counter-influence against inflation which they have been during the last two years. The longer inflation continues, the more necessary it is to clamp down controls and regulations and licences, the more necessary it is to invent daily new penalties and new crimes so as to prevent £7,300 million forcing up the price of £6,000 million worth of goods. That inflationary pressure will be greatly increased by the exhaustion of the loan. That is a thing which the country has to face.

I want to turn back again to the speech of the right hon. and learned Gentleman the Minister for Economic Affairs last week. It made a great impression on the House and, except that it made no mention of Work or wages, I must say I thought myself that it was a courageous, explicit and truthful account of our present difficulties, but it was no much more. Boiled down it amounted to this: We cannot buy any longer the things we have not the money to pay for, and we must export everything that the foreign buyer will buy and do without it. He then went on to discuss the export targets which he very fairly said he put forward in an optimistic mood. I must say quite frankly—I trust I shall prove to be wrong—that I believe them to be quite unattainable. That is a thing we must take into all our calculations. In other words, if we were to attain the volume of production we should either not find the markets or, if we found the markets, we should find them at lower prices, which would cancel some of the extent of the volume. It is no good living in this world of make-believe. Those targets are unattainable. Every word of that speech—as other right hon. and hon. Gentlemen have said today, sometimes not always meaning it—was a condemnation by bell, book and candle of the whole economic policy of his colleagues, a condemnation of the last two years of Socialist misrule.

Now let us be fair on the other side. Once having pursued the policy they have pursued up till now, and once having taken the first step in the wrong direction, the Government are compelled by the force of circumstances to take the very measures which they are now proposing. There are some of us who think that we would have done better in the early days to have timed our economic recovery on the Belgian model—I am one of them—and then, by being a little easier in the home market, we might have been able to put greater drive and greater momentum into the export markets later on. That is a conjecture into which it is not worth going; no one will ever know whether that was right or wrong. However, the right hon. and learned Gentleman and his friends are quite at fault if they think that we on this side of the House believe that, having taken this wrong turning, we should now increase the supply of goods to the home consumer. Once having misdirected the whole economic effort, and having gone in for a policy of monetary inflation and the strangulation of enterprise—and the two things go together—they are now faced with a situation in which it is manifestly impossible to increase supplies, to the home market.

And now at last, after two years, some attempt is apparently to be made to start a priority system for our capital commitments. This used to be the function, almost the main function, of the Treasury and the Chancellor of the Excheauer. It was his business to see that the sum or what the Departments wished to spend was within the resources of the country. I think I am right in saying that Lord Randolph Churchill, the father of my right hon. Friend, actually resigned his office as Chancellor of the Exchequer because he could not get his colleagues to trim their expenditure to the point he thought necessary, to match the national resources. I recommend the present Chancellor to read this recent piece of history.

Let us consider for a moment the number of things we are trying to do all at once—to re-equip the coal mines and some of our overworked, more important industries, like cotton and textiles, which had a great deal of unfair competition between the wars. We are trying to maintain, and, I think, waste, the largest Forces we ever had in peace time, trying to build a large number of schools, going in for the largest programme of house building this country has ever seen—only a programme, no houses. We are trying to set on its feet the largest national insurance and national health scheme of any country in the world, spending some hundreds of millions on colonial development, trying to rebuild our Mercantile. Marine, and export more than £31 million worth a month above our present rate, and we are expecting to maintain 600,000 more civil servants, local and central, than we did before the war, and lastly, to take in our stride the nationalisation of a number of industries.

No one with common sense, even with the Treasury behind them, can say that all this can be done at once. Nearly all these projects, except nationalisation and an increase of bureaucracy, are highly desirable, and even urgent. I do not for a moment deny that nearly all the things in that list is desirable, and urgent—they are. But I say that any man of sense knows that they cannot be carried out at once after two of the most exhausting wars in history. So if hon. Members who are seekers after knowledge, like the hon. Member below the Gangway, want to know what positive measures we advocate, I will tell them that the first is to curtail Government expenditure in the capital Budget. [An HON. MEMBER: "How?"] I cannot go into details.

Mr. Shurmer

Like 1929?

Mr. Lyttelton

That is just a childish interruption. I repeat that a team—which I believe the Prime Minister has not got—loyal to one another could trim the national expenditure today by £500–600 million. I admit that a budgetary surplus of that nature might drive up the cost-of-living index, but it is our thought on this side of the House that there must be remissions of taxation, particularly on the lower income scales, and possibly increased social services in order to reduce the incidence on those who earn the least. If there is to be a reversal, and a reduction of inflationary pressure, it is our thought that it may be necessary not only to reduce taxation of the lower income groups, but also to increase the social services.

I must say a word about trade as distinct from industry. Far too little attention has been paid to our invisible exports, which have largely been cancelled by the disastrous policy of His Majesty's Government in relation to overseas expenditure. They have also done everything they can to prevent the recovery of our entrepot trade. If the right hon. Gentleman requires an instance, let him look at the closing of the Liverpool Cotton Exchange, which even on the very niggardly estimate of the Lord President of the Council brought in £1 million of foreign exchange a year. There are many other commodity markets which, partly owing to timidity and partly ignorance, His Majesty's Government are still keeping closed. They should consult the Minister of Supply.

I must say something about the attitude of the Government to the United States of America. The Foreign Secretary, in an extremely ill-judged speech at Southport, began by saying—I suppose this part was on the brief—that it was most necessary for this country to stand upon its own feet and rid itself of the need for American support. All of us in all parts of the House agree with that. He then went on to say that one of the real roads to recovery was that this nation, described by the hon. Member for Nelson and Colne as sordid moneylenders—I beg pardon—" shabby moneylenders "—

Mr. S. Silverman

rose—

Hon. Members

Order.

Mr. Deputy-Speaker (Major Milner)

We cannot have two right hon. or hon. Gentlemen on their feet at once. Unless the right hon. Gentleman gives way, which perhaps he may do, having regard to the fact that he made a personal reference to the hon. Member, the hon. Member is not entitled to speak.

Mr. Silverman

On a point of Order. Is it within the usual custom of the House, and within the Order of the House for a right hon. Gentleman, if he inadvertently misquotes and misrepresents another hon. Member, to give way to allow an interruption to be made?

Mr. Lyttelton

Further to that point of Order. I thought I had corrected, in the same breath, the word I used.

Mr. Deputy-Speaker

In reply to the hon. Member—the matter is entirely one for the right hon. Gentleman or hon. Gentleman making the statement in question.

Mr. Lyttelton

The reason I did not give way is because the hon. Member made a most mischievous speech this afternoon in which he tried to make the damage which he has already done—[Interruption.] Leaving that on one side, the Foreign Secretary said one of the ways out of our present difficulties was for the Americans to redistribute the stock of gold at Fort Knox. May I ask how is this gold to be redistributed unless it is lent or given away, and if either of those courses is taken, how is that consistent with the argument of the Foreign Secretary that the one thing we want to do is to stand upon our own feet? There is a widespread feeling in the United States, which is entirely and absolutely wrong, that the people of this country are work-shy, and His Majesty's Government must get down to it to correct that impression. It is absolutely wrong. We all know that there are black spots. There are black spots, in my own experience—

Mr. Gallacher (Fife, West)

The Dorchester Hotel is a black spot.

Mr. Lyttelton

It may be, but there are certainly black spots where there is not a full day's work being done, though it is not generally so over the industries of this country. That is in my own experience. Shortages of material and fuel are very often holding back the efforts of all in industry, including the workers, to produce more. That is within my own experience. The American public look very largely at the coal figures and they are judging this country very largely on our output of coal. I do not believe that it is beyond the organisation of the Government, if properly applied, or of this country, to raise the coal output very materially. It is no good sitting back expecting that that is going to happen by a very much larger output per man hour. The industry must be manned with still more men.

I want to say a word or two about Bretton Woods, Imperial Preference and discrimination. As I have very little time, I go straight to the matter of Imperial Preference. I heard the statement of the President of the Board of Trade today with very great anxiety. I shall await the announcement of the deal that is being done with very great anxiety because I think, from what he said, that we are going to make a mess of it, as this Government usually do. The statement which he made seems to show that we have surrendered parts of Imperial Preference, or abolisbed it in some cases, on a strictly equivalent basis to the Americans. In other words, the deal appears to be—and I trust it is not—exactly trimmed so that the advantages of any piece of trade are exactly equivalent in both cases. If we have done that we have made a mess of it, because we started the negotiations with the Americans who have between 12,000 million dollars and 13,000 million dollars of favourable balances, and we ourselves have an unfavourable balance of 600 million pounds. As a matter of fact, the doctrine of non-discrimination when the trade balances between these two great trading countries are like this, is absolutely futile, but it is obvious that one of the things required in order to readjust the position is some discrimination. I know that the Minister for Economic Affairs will agree with me upon that. I express the gravest fears that that has been done on too much of an equivalent basis.

I am going to end up with a little very plain speaking. No doubt it is necessary at the moment to do without, but in the long run this is only a mitigation and not a cure of our ills. What is required is an entirely new economic outlook, a new really positive policy, a positive effort to release and not to crib and confine the national genius of invention and ingenuity. None of these measures can be undertaken and none can succeed under the present Government. For example, let me quote one passage from the "Economist "—not a Tory newspaper. This is what the writer says, and it could not be expressed better: Socialism has no contribution to make to the crisis in which the country finds itself. What is obviously needed, is a policy, short-term may be, but all the more urgent on that account, which is the exact opposite of all the Labour Party has ever preached. At the end of it all, we come back to a very simple and understandable issue. The Government have no leader, they have no team, and they have no plan, and we cannot in war win battles without these three, and, in peace, we cannot get out of an economic crisis and set our feet on the way to prosperity without them. In two years, the Government have pulled down into the dust the monuments of our victory, and our prestige, which stood so high on VJ day, has now sunk to nothing, and we have sunk to be a divided mendicant nation, now snarling and now fawning.

I make this last appeal to the Government. Cease the alibis, cease saying that the events are too big to be controlled by little men. Cease to think that we shall win through. Let them repeat to themselves, in great humility: The fault, dear Brutus, is not in our stars, But in ourselves, that we are underlings.

9.31 p.m.

The Prime Minister (Mr. Attlee)

The Debate on the Address has taken a rather unusual course. The early stages were illuminated by the speech of my right hon. and learned Friend the Minister for Economic Affairs, and the whole House was impressed. Now, we have been having two days on an Amendment, an official motion of censure, but the tendency of all hon. Members, except the three right hon. Gentlemen told off to speak to it, has been to keep off the Amendment, and to make, very often quite useful, contributions on topics which were discussed in the earlier part of the King's Speech. Therefore, I am left to deal tonight mainly with three speeches, those of the right hon. Gentleman the Leader of the Opposition, the right hon. Gentleman the Member for Bromley (Mr. H. Macmillan) and the right hon. Gentleman the Member for Aldershot (Mr. Lytfelton).

I would like, first, to look at the phraseology of this Amendment, in which I seem to recognise the hand of the Leader of the Opposition, because it starts off, very characteristically, by denouncing the Government for following a partisan policy, and that is a very revealing phrase. It is generally understood in this country that a Government is returned to carry out the policy of a particular majority party. The Leader of the Opposition always takes the view that he represents not a party view, but a national view. The Conservative policy, whatever it may be, is always the national policy. Of course, many hon. Members are comparatively new to this House, though the noble Lord the Member for Horsham (Earl Winterton) will remember that, 38 years ago, the right hon. Gentleman was just the same, only then it was the Liberal Party.

I have refreshed my mind by looking up a book written in 1909 by the right hon. Gentleman, called "The People's Rights," and I find there that, in the particular pieces of policy advocated by the Liberal Party—Welsh Disestablishment, the Education Bill and so forth—they were all the party of the nation. Indeed, I found the actual phrase, because it is the Conservative Party that is always partisan. When these Liberal Measures came up in another place, the right hon. Gentleman said they were defeated on purely partisan lines. Therefore, we need not take much account of the word partisan. It has done good service, like other partisans, for many years and on both sides. This is an interesting book and I quote it without hesitation, because at the beginning, the right hon. Gentleman said: It is ammunition passed along the firing line. The right hon. Gentleman is on a different side of the firing line, but the ammunition is still in excellent condition.

I shall have occasion to use some of it later on. A partisan policy is simply a policy with which the right hon. Gentleman disagrees. I must say that it comes rather oddly from the right hon. Gentleman, because I have never known a party leader who more consistently followed out the good old maxim that it is the duty of the Opposition to oppose. During the last few years he has seized every opportunity to attack the Government, and I quite regard this Amendment as part of that consistency. He has freely attacked us on the ground that we were not giving the nation enough food; but we were equally at fault in spending too much money on food from abroad, when we ought to have been importing machinery and the Loan should have bought machinery and capital goods. We are accused of having built too few houses, and, equally, we are accused of having a too extensive investment programme. And every time that any particular difficulty has arisen, the right hon. Gentleman has always taken it, and run it for as long as he thought it was useful. There was a great noise about bread rationing—that it was not necessary. That line of attack was very quickly dropped. In the same way, he calls at one time for a reduction of the Armed Forces, and at another demands policies which would require their increase.

Mr. Churchill

I stand absolutely by the figures which I offered to the House two years ago.

The Prime Minister

Certainly, but the right hon. Gentleman talks about our scuttling from Egypt and India. He knows perfectly well that, if we had followed the kind of policies he advocated, we would need many more troops.

Mr. Churchill

The right hon. Gentleman knows that it is untrue to say that I have continually advocated the policy of scuttling from India, Egypt, and Burma.

The Prime Minister

I did not accuse the right hon. Gentleman of that policy; what I said was that he had accused us, on more than one occasion, of scuttling from everywhere.

Mr. Churchill

Ah, yes.

The Prime Minister

Quite; we are all agreed. When an Opposition challenges a Government on the Address, they, of course, offer themselves as an alternative Government, and I imagine that they would offer an alternative policy. The country is entitled to know where they stand. [HON. MEMBERS: "Hear, hear."] I do not know whether that was a cri de cœur from the hon. Member for Orpington (Sir W. Smithers). We are at a loss to know now what is the policy of the Conservative Party. We waited a very long time for it, and we thought that it had all been settled at Brighton, We thought that the views of the right hon. Gentleman the Member for Saffron Walden (Mr. R. A. Butler), and the views of the middle way of the right hon. Member for Bromley (Mr. H. Macmillan) had all been accepted. Then the right hon. Gentleman comes down to the House and makes a speech, and blows it all to smithereens. I am bound to say that I could not help being a little amused when the right hon. Member for Aldershot (Mr. Lyttelton) talked about the need for having only one policy—on the Benches opposite, where we have the pure milk of the word, the great laissez-faire Liberalism of the right hon. Member for Woodford! And then we had the policy all the way down. I do not see the right hon. Member for Saffron Walden; perhaps he did not want to see the death of the child, so to speak.

I must say I thought that the right hon. Gentleman, when he rejoined the Conservative Party, had gone right back to his olden days. Now he has suddenly reverted to a middle period, and he is following John Morley in economics as well as in his views on India. When he expounded these classical theories I very much regretted that he could not enjoy, as we did, the dismay on the faces of many of his supporters. I came to the conclusion that he must have spent much more time on the phraseology than the content of his speech, because I never knew a speech that ignored more entirely the facts of the economic situation. How easy it is to say that the export trade should be only that part of an iceberg that glitters above the surface, and that we ought to have an enormous internal production as well as external. That is very ideal, but how can we have that—

Mr. Churchill

Not with this Government.

The Prime Minister

—with the limitations we have at the present time in raw materials, fuel and the rest of it? It is perfectly impossible. The right hon. Gentleman talked a great deal about this free enterprising society that he wanted. I thought he was admirably corrected by the right hon. Member for Aldershot[...] From the speech of the right hon. Member for Woodford, one would have thought that there was no industrial activity in this country at all, and that everything was smothered and frustrated by the Government. Then we had the right hon. Member for Aldershot, who himself is engaged in industry, and he gave a very different picture indeed. He said, quite rightly, that we should not allow ourselves to be denigrated all over the world, and have it said that the people were not working properly and were work shy. I very much regret that that should be done. We certainly have never done that.

I come now to what the right hon. Gentleman thinks we ought to do in the present circumstances. As I understand it from reading his speech, he considers that if we could set everything free from controls we should soon get over our difficulties. But I want to get down to concrete points. He believes in the free play of competition, prices finding their own level and the rest. Would he do away with food rationing now? We want to know, because he talked about it rather vaguely.

Hon. Members

Answer!

Mr. Churchill

In my speech I was striking a note, and the note was: "Set the people free." When you have loaded them with chains, all the shackles cannot be struck off in a day.

The Prime Minister

This note of the right hon. Gentleman's which he gives to the nation is the statement, "You should be free, but not just now." [An HON. MEMBER: "The note is 'dud'."] It is an I.O.U. The right hon. Gentleman knows perfectly well, as a matter of fact, that in the present economic situation of the world all these things cannot be set free, and he also knows perfectly well that if his party had the majority, his Government could not have done without rationing. He knows very well that he would have had to direct the export trade to deal with the dollar situation. I say that to come down to the House and make a speech like that is utterly unreal. I disliked seeing the embarrassment of the right hon. Gentleman the Member for Bromley, who knows something about these matters. He obviously did not want to speak directly against the right hon. Gentleman the Leader of the Opposition and take a different line, and so he gave us a lot of very agreeable witticisms that did not take us very much further.

Mr. H. Macmillan

The Prime Minister has not answered the financial side of the case.

The Prime Minister

Such major points will be raised, of course, when the Budget comes along. I really did not find anything new in the points the right hon. Gentleman made.

Mr. H. Macmillan

Is the right hon. Gentleman going to make no attempt to explain the speech of the Chancellor of the Exchequer on Friday, which has left everybody in complete amazement?

The Prime Minister

I do not think people were left in that difficulty. I am sure that the Chancellor will be very glad to explain any points to the right hon. Gentleman. [HON. MEMBERS: "Where is he?"] I gather now from the right hon. Gentleman that this was only a "note" for the future. He has no particular policy to put before the country. But the right hon. Gentleman really should tell people a little more of what he would do. I have listened to three right hon. Gentlemen opposite and beyond attacking the Government not one of them has suggested what should be done in this matter. Not one. Therefore, there really is not very much in these major points put forward by the right hon. Gentleman with regard to the economic situation of the country, because they do not suggest in the slightest degree what different policy right hon. Gentlemen opposite would have followed with regard to trying to deal with the exchange position. I do not think it is suggested that we should not stimulate the export trade, and to do that we have to keep goods off the home market. Still the right hon. Gentleman joins with all the others who blame my right hon. and learned Friend the Minister for Economic Affairs for austerity. Any stick is good enough to beat him with.

Mr. Osborne (Louth)

Supplies could be increased.

The Prime Minister

Increase supplies by all means.

Mr. Osborne

The right hon. Gentleman says we have to take—[Interruption.] I am suggesting to the Prime Minister that the real solution is to increase the total supplies.

The Prime Minister

Yes, I gathered that. Of course, we shall do that. The hon. Member will, however, agree that, in our present condition, we have to export. I should like to deal with one or two points that were raised in the Debate by other Members besides those on the Opposition Front Bench. I do not intend to deal with many of them because, as I say, they were rather on the general questions that came up on the King's Speech than on the particular Amendment that we are now discussing. There were some interesting speeches made—by my hon. Friend the Member for Widnes (Mr. C Shawcross) and my hon. Friend the Member for North-West Hull (Mr. R. Mackay)—dealing with the wider aspects of this problem. We have never contended that, in dealing with the economic position of this country, we could get out of it entirely oblivious to what is happening in the rest of the world. We have said we must do our utmost, and that if we want to maintain and raise our standards here we must have world co-operation That is why my right hon. Friend the Foreign Secretary took the initiative, after General Marshall's speech, leading to the Paris discussions. That is why we have had many discussions with the overseas Dominions, and why in the King's Speech there are mentioned the provisions for developing the Colonial territories. I quite agree with my hon. Friends who raised these points that they are of immense importance, but, as I say, they were raised on the general Debate rather than on this particular Amendment.

But there are other points made by the right hon. Gentleman the Leader of the Opposition. He attacked me on India, and he said, or implied, that I was responsible for the slaughter in India.

Mr. Churchill

No, I did not say that.

The Prime Minister

Well, the right hon. Gentleman rather implied it. Now, I am willing to take my full share of responsibility in this matter, but it must be remembered that the Indian policy of the present Government was preceded by the Morley-Minto Reforms, by the Montagu-Chelmsford Reforms, by the Act of 1935, and by the long course of change in British rule in India, leading on to what I know the right hon. Gentleman thinks was a disaster. But I do not know anybody who suggests that in the position into which affairs had got in India We could have done anything else but go forward on the lines on which we did go forward. I believe that any other attempt would have led to greater slaughter. We all deplore the slaughter in India; we all deplore those terrible events; but the time had come when Indian affairs had to be managed by Indians, and at that stage it was not possible for British power to re-enter by force and impose a peace on these peoples of warring emotions. I think it is fair that the right hon. Gentleman, when he attacks this Government, should recognise what were the facts of the situation which we had to meet when we came in.

Mr. Churchill

Let me say that it is not in any invidious or personal sense that I wish to fasten blood-guilt upon the Prime Minister, but I do consider that the gravest heart-searchings should rouse themselves in the breasts of all who have for years past been tearing down the broad peace under which the Indian millions have lived for so long.

The Prime Minister

I am obliged to the right hon. Gentleman. The right hon. Member for Bromley tried to maintain that the speech of my right hon. and learned Friend the Minister for Economic Affairs was an indictment of the Government. [HON. MEMBERS: "Hear, hear."] It was nothing of the sort. It set out the facts of the situation; it showed how the general policy of the Government for the reconstruction of our industries, and the building up of our export trade, under the breathing space afforded to us by the American loan, had been affected bzy adverse factors. I do not think even the right hon. Member would deny that there are adverse factors.

Let me say here that I am not pleading an alibi, for I understand an alibi to involve saying, "I was somewhere else." I am not putting forward excuses, but I am entitled to say that we must look at all the facts of the situation. When the right hon. Member for Woodford and I, and others, were in the Coalition Government we tried to make a forecast of how events would move in the world after the war. We tried the best we could," we made the best forecasts and the best plans; but he knows as well as I do that if we went back now and looked at those forecasts we would find that many of them had been falsified by events. In all operations, whether of peace or of war, one cannot make definite plans; they are bound to be affected by matters entirely outside one's power. In the speeches from the Opposition Front Bench to which we have listened there has been an attempt to suggest that this Government is responsible for all the ill things that have happened in the world.

Mr. Churchill

Not all.

The Prime Minister

I do not intend to attribute too much influence to the British Government, which is an insular outlook. I can remember the same thing being done in 1931, when all the ills which afflicted the whole world were put down to the fact that we had what was called a "wicked Labour Government" at that time. The right hon. Gentleman suggested that there was a very serious falling away in the support for this Government. I do not find that in the countryside. [HON. MEMBERS: "You will."] From talking with ordinary men and women, I believe that they have a far greater apprehension of what are the facts of the situation, and the difficulties the Government have had to face, than is always credited to them. People sometimes forget that we have a far more educated democracy than we had 40 years ago. Still less do I find that there is any confidence whatever in the Opposition. I listened with interest, as I always do, to the hon. and gallant Gentleman the Member for Ayr Burghs (Sir T. Moore), who said that we could have national unity tomorrow if only the Labour Party would follow the Conservative Party. He gave us a detailed list of what we should have to give up to obtain his support, and it was quite a long one.

I now come to my final point. It is a favourite cry of the Opposition to charge this Government with being too late. They say that we should have taken action earlier. I heard today that we were said to have been complacent—

I think that was the phrase—about the American Loan, that we ought to have taken action and not been lulled into security. Well, we must not do that with regard to another place. Clearly, we should be quite wrong to be lulled by anything that has happened in the last few years. We ought to look ahead and take precautions.

Mr. Churchill

On national grounds?

The Prime Minister

Exactly the same grounds the right hon. Gentleman set out in this admirable pamphlet. More than a year ago we took this question into consideration, because we had to look ahead. The right hon. Gentleman suggested that the whole of this matter had been settled once and for all in 1911. As I pointed out the other day, since then there have been two minority Labour Governments and no Liberal Governments. If the right hon. Gentleman's course had been different, if he had rallied the Liberal Party after the first world war and had come into power on a Radical programme, he would soon have found out whether the 1911 legislation was sufficient, but the question was settled for him as soon as he joined the Conservative Party. He now tells us that it is quite all right; under a Conservative Government nothing happens and a Labour Government can always have another Election—it only has to wait for another Election to pass its Bills. I recommend the admirable words in this book. The right hon. Gentleman dealt with every single point put up by himself, and answered them with a cogency I cannot hope to equal. We intend to carry out our programme, and we shall take the precautions to see that we do carry out our programme while our mandate lasts. I hope that the House will reject this Amendment.

Question put, "That those words be there added."

The House divided: Ayes, 201; Noes, 348.

Division No. 3.]	AYES	[10.0 p.m
Agnew, Cmdr. P. G	Baxter, A. B.	Boyd-Carpenter, J. A.
Aitken, Hon. Max	Beamish, Maj. T. V H	Bracken, Rt. Hon. Brendan
Allen, Lt.-Col. Sir W. (Armagh)	Beechman, N. A.	Braithwaite, Lt.-Comdr. J. G.
Amory, D. Heathcoat	Bennett, Sir P.	Bromley-Davenport, Lt.-Col. W
Anderson, Rt. Hn. Sir J. (Scot. Univ.)	Boles, Lt.-Col D C. (Wells)	Bullock, Capt. M.
Assheton, Rt. Hon. R.	Bossom, A. C	Butcher, H. W
Astor, Hon. M.	Bowen, R.	Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)
Baldwin, A. E.	Bower, N	Byers, Frank
Carson, E.	Hulbert, Wing-Cdr N J	Ponsonby, Col C. E
Challen, C.	Hurd, A	Poole, O. B. S (Oswestry)
Channon, H.	Hutchison, Lt.-Com C. (E'b'rgh W)	Price-White, Lt.-Col. D
Churchill, Rt. Hon. W. S	Jarvis, Sir J.	Prior-Palmer, Brig. O.
Clarke, Col. R. S.	Jeffreys, General Sir G.	Ramsay, Maj. S.
Clifton-Brown, Lt.-Col. G	Jennings, R.	Rayner, Brig. R.
Cole, T. L.	Joynton-Hicks, Hon. L. W.	Reed, Sir S. (Aylesbury)
Conant, Maj. R. J. E.	Keeling, E. H.	Reid, Rt. Hon. J. S C. (Hillhead)
Cooper-Key, E. M.	Kerr, Sir J. Graham	Renton, D.
Corbett, Lieut.-Col. U. (Ludlow)	Kingsmill, Lt.-Col. W. H	Roberts, Emrys (Merioneth)
Crookshank, Capt. Rt. Hon H. F. C.	Lambert, Hon. G	Roberts, H. (Handsworth)
Crowder, Capt. John E.	Lancaster, Col. C. G	Roberts, Maj P. G (Ecclesall)
Cuthbert, W. N	Langford-Holt, J.	Robertson, Sir D. (Streatham)
Darling, Sir W. Y.	Law, Rt. Hon. R. K.	Robinson, Wing-Comdr Roland
Davidson, Viscountess	Legge-Bourke, Maj. E A. H.	Ropner, Col. L
Davies, Clement (Montgomery)	Lennox-Boyd, A. T.	Ross, Sir R. D. (Londonderry)
De la Bère, R.	Linstead, H N	Salter, Rt. Hon. Sir J. A.
Digby, S W.	Lipson, D. L	Sanderson, Sir F
Donner, P. W.	Lloyd, Maj. Guy (Renfrew, E.)	Savory, Prof. D L
Dower, E. L. G. (Caithness)	Lloyd, Selwyn (Wirral)	Scott, Lord W.
Drayson, G. B	Low, A. R. W.	Shephard, S. (Newark)
Drewe, C.	Lucas, Major Sir J	Shepherd, W. S. (Bucklow)
Dugdale, Maj. Sir T. (Richmond)	Lucas-Tooth, Sir H.	Smiles, Lt.-Col Sir W.
Duthie, W. S	Lyttelton, Rt. Hon. O	Smith, E. P. (Ashford)
Eden, Rt. Hon. A.	MacAndrew, Col. Sir C	Smithers, Sir W.
Elliot, Rt. Hon Walter	McCallum, Maj D	Snadden, W. M.
Erroll, F J	MacDonald, Sir M (Inverness)	Spearman, A. C. M.
Fleming, Sqn.-Ldr. E. L	Macdonald, Sir P. (I of Wight)	Spence, H. R.
Fletcher, W. (Bury)	Mackeson, Brig. H. R.	Stanley, Rt. Hon. O.
Foster, J. G (Northwich)	McKie, J. H. (Galloway)	Stewart, J. Henderson (Fife, E.)
Fox, Sir G.	Macmillan, Rt. Hon. Harold (B'mley)	Stoddart-Scott, Col. M.
Fraser, Sir I. (Lonsdale)	Macpherson. N. (Dumfries)	Strauss, H. G (English Universities)
Fyfe, Rt. Hon Sir D. P. M	Manningham-Buller, R E.	Studholme, H G
Gage, C.	Marlowe, A A H	Sutcliffe, H
Galbraith, Cmdr. T. D	Marples, A. E.	Taylor, C. S. (Eastbourne)
Gammans, L. D.	Marsden, Capt. A.	Taylor, Vice-Adm E. A. (P'dd't'n, S)
Gates, Maj. E E.	Marshall, D. (Bodmin)	Thomas, J. P L (Hereford)
George, Maj Rt. Hn. G. Lloyd (P'ke)	Marshall, S H (Sutton)	Thorneycroft, G E P (Monmouth)
George, Lady M Lloyd (Anglesey)	Medficott, F.	Thornlon-Kemsley, C N
Glyn, Sir R.	Mellor, Sir J.	Thorp, Lt.-Col. R A F
Gomme-Duncan, Col A	Molson, A. H. E.	Touche, G. C
Grant, Lady	Moore, Lt.-Col. Sir T	Turton, R. H.
Granville, E. (Eye)	Morris, Hopkin (Carmarthen)	Vane, W M F
Gridley, Sir A.	Morris-Jones, Sir H.	Wakeheld, Sir W. W
Grimston, R. V.	Morrison, Maj. J. G. (Salisbury)	Walker-Smith, D.
Gruffydd, Prof. W. J.	Morrison, Rt. Hon. W. S. (Cir'ne'stir)	Ward, Hon. G. R.
Hannon, Sir P. (Moseley)	Mott-Radclyffe, Maj C E.	Watt, Sir G S. Harvie
Hare, Hon. J. H. (Woodbridge)	Mullan, Lt. C. H.	Webbe, Sir H. (Abbey)
Harris, H. Wilson	Neill, W F (Belfast, N.)	Wheatley, Colonel M J
Harvey, Air-Comdre. A. V	Neven-Spence, Sir B	White, Sir D. (Fareham)
Haughton, S G	Nicholson, G	White, J. B. (Canterbury)
Head, Brig A. H	Nield, B. (Chester)	Williams, C. (Torqury)
Headlam, Lieut.-Col. Rt. Hon Sir C.	Noble, Comdr. A. H. P	Williams, Gerald (Tonbridge)
Henderson, John (Cathcart)	Nutting, Anthony	Willink, Rt. Hon. H. U.
Herbert, Sir A. P	O'Neill, Rt. Hon. Sir H.	Willioughby de Eresby, Lord
Hogg, Hon Q	Orr-Ewing, I. L	Winlenton, Rt. Hon. Earl
Hollis, M. C	Osborne, C	York, C.
Holmes, Sir J. Stanley (Harwich)	Peake, Rt. Hon. O
Howard, Hon. A.	Peto, Brig. C. H. M	TELLERS FOR THE AYES:
Hudson, Rt. Hon. R S. (Southport)	Pickthorn, K	Mr. James Stuart and
		Mr. Buchan-Hepburn.
NOES.
Adams, Richard (Balham)	Belcher, J. W	Brooks. T. J. (Rothwell)
Alexander, Rt. Hon. A. V	Belienger, Rt. Hon. F J	Brown, George (Belper)
Allen, A. C. (Bosworth)	Benson, G	Bruce, Maj. D. W T
Alpass, J. H.	Berry, H	Buchanan, G
Anderson, A (Motherwell)	Beswick, F.	Burke, W A
Anderson, F (Whitehaven)	Bevan, Rt. Hon A (Ebbw Vale)	Butler, H W (Hackney, S.)
Attewell, H. C.	Bevin, Rt. Hon. E (Wandsworth, C)	Callaghan, James
Attlee, Rt. Hon C. R.	Bing, G. H. C.	Carmichael, James
Austin, H. Lewis	Binns, J.	Castle, Mrs B A
Awbery, S. S	Blackburn, A R	Chamberlain, R. A
Ayles, W. H	Blenkinsop, A	Champion, A J.
Ayrton Gould, Mrs. B	Blyton, W R	Chater, D
Bacon, Miss A	Boardman, H	Chetwynd, G. R
Baird, J	Bottomley, A. G	Cluse, W S
Balfour, A	Bowden, Flg.-Offr. H. W	Cobb, F. A
Barstow, P. G	Bowles, F G (Nuneaton)	Cocks, F S.
Bartlett, V	Braddook, Mrs E M. (L'pl, Exch'ge)	Coldfick, W
Barton, C	Braddock, T. (Milcham)	Collick, P
Battley, J. R.	Bramall, E A.	Collindridge, F.
Bechervaise, A. E.	Brook, D. (Halifax)	Collins, V. J.

Calman, Miss G M	Hughes, Emrys (S. Ayr)	Paling, Rt. Hon. Wilfred (Wentworth)
Comyns, Dr. L	Hughes, Hector (Aberdeen, N.)	Paling, Will T. (Dewsbury)
Cook, T. F	Hughes, H D. (W'lverh'pton, W.)	Palmer, A. M F.
Cooper, Wing-Comdr. G	Hutchinson, H. L (Rusholme)	Pargiter, G. A.
Corbet, Mrs. F. K. (Camb'well, N. W. J	Hynd, H (Hackney, C.)	Parker, J.
Corlett, Dr. J.	Hynd, J. B (Attercliffe)	Parkin, B. T.
Corvedale, Viscount	Irvine, A. J. (Liverpool)	Pearson, A.
Cove, W. G.	Irving, W. J. (Tottenham, N.)	Peart, T. F.
Crawley, A.	Isaacs, Rt. Hon G. A	Perrins, W.
Cripps, Rt. Hon. Sir S	Janner, B	Platts-Mills, J. F. F.
Crossman, R. H. S	Jay, D. P. T.	Poole, Cecil (Lichfield)
Daggar, G.	Jeger, G. (Winchester)	Popplewell, E.
Daines, P.	Jeger, Dr. S. W. (St. Pancras, S. E.)	Porter, E. (Warrington)
Dalton, Rt. Hon. H.	John, W.	Porter, G. (Leeds)
Davies, Edward (Burslem)	Jones, D. T. (Hartlepools)	Pritt, D. N.
Davies, Haydn (St Pancras, S. W.)	Jones, Elwyn (Plaistow)	Proctor, W. T.
Davies, R. J. (Westhoughton)	Jones, J. H. (Bolton)	Pryde, D. J.
Davies, S. O. (Merthyr)	Jones, P. Asterley (Hitchin)	Pursey, Cmdr. H.
Deer, G.	Keenan, W.	Randall, H. E.
de Freitas, Geoffrey	Kendall, W. D.	Ranger, J.
Delargy, H. J.	Kenyon, C.	Rankin, J.
Diamond, J.	King, E. M.	Rees-Williams, D. R
Dobbie, W.	Kinghorn, Sqn.-Ldr. E	Reeves, J.
Dodds, N. N.	Kinley, J.	Reid, T. (Swindon)
Donovan, T.	Lawson, Rt. Hon. J. J.	Ridealgh, Mrs. M.
Dugdale, J. (W. Bromwich)	Lee, F. (Hulme)	Robens, A.
Dumpleton, C. W	Leonard, W.	Roberts, Goronwy (Caernarvonshire)
Durbin, E. F. M	Leslie, J. R.	Robertson, J. J. (Berwick)
Dye, S.	Lever, N. H.	Rogers, G. H R.
Ede, Rt. Hon. J. C	Levy, B. W.	Ross, William (Kilmarnock)
Edelman, M.	Lewis A. W. J. (Upton)	Royle, C.
Edwards, A. (Middlesbrough, E.)	Lewis, J. (Bolton)	Sargood, R.
Edwards, Rt. Hon. Sir C. (Bedwellty)	Lewis, T. (Southampton)	Scollan, T.
Edwards, John (Blackburn)	Lindgren, G. S.	Scott-Elliot, W.
Edwards, N. (Caerphilly)	Lipton, Lt.-Col. M	Segal, Dr. S.
Edwards, W. J. (Whitechapel)	Longden, F.	Shackleton, E. A. A
Evans, A. (Islington, W.)	Lyne, A. W.	Sharp, Granville
Evans, E. (Lowestoft)	McAdam, W.	Shawcross, C. N. (Widnes)
Evans, John (Ogmore)	McAllister, G.	Shurmer, P.
Evans, S. N. (Wednesbury)	McEntee, V La T.	Silkin, Rt. Hon. L.
Ewart, R	McGhee, H. G.	Silverman, J. (Erdington)
Fairhurst, F.	Mack, J. D.	Silverman, S. S. (Nelson)
Farthing, W. J	Mackay, R. W. G. (Hull, N. W.)	Simmons, C. J.
Fernyhough, E	McKinlay, A. S.	Skeffington, A. M.
Field, Capt. W. J.	Maclean, N. (Govan)	Skeffington-Lodge, T. C
Fletcher, E. G. M (Islington, E.)	Maepherson, T. (Romford)	Skinnard, F. W.
Follick, M.	Mainwaring, W. H.	Smith, C. (Colchester)
Foot, M. M.	Mallalieu, J. P. W.	Smith, Ellis (Stoke)
Forman, J. C.	Mann, Mrs. J.	Smith, H. N. (Nottingham, S.)
Foster, W. (Wigan)	Manning, C. (Camberwell, N.)	Smith, S. H. (Hull, S. W.)
Fraser, T. (Hamilton)	Manning, Mrs. L. (Epping)	Snow, J. W.
Freeman, John (Watford)	Marquand, H. A.	Solley, L. J.
Gaitskell, Rt. Hon. H. T. N.	Marshall, F. (Brightside)	Sorensen, R. W.
Gallacher, W.	Martin, J. H.	Soskice, Maj. Sir F
Ganley, Mrs C. S	Mathers, Rt. Hon. G	Sparks, J. A.
Gibbins, J.	Mayhew, C. P.	Stamford, W
Gilzean, A.	Medland, H. M.	Steele, T.
Glanville, J. E. (Consett)	Mellish, R. J.	Stewart, Michael (Fulham, E.)
Goodrich, H. E.	Messer, F.	Stokes, R. R.
Gordon-Walker, P. C.	Middleton, Mrs. L.	Strachey, Rt. Hon. J.
Greenwood, Rt. Hon. A. (Wakefield)	Mikardo, Ian.	Strauss, Rt. Hon. G. (Lambeth, N.)
Greenwood, A. W. J. (Heywood)	Millington, Wing-Comdr E R	Stress, Dr. B
Grenfell, D. R.	Mitchison, G. R.	Stubbs, A. E
Grey, C. F.	Monslow, W.	Summerskill, Dr. Edith
Griffiths, Rt. Hon. J. (Llanelly)	Moody, A. S.	Swingler, S.
Griffiths, W D (Moss Side)	Morgan, Dr. H. B	Sylvester, G. O.
Gunter, R. J.	Morley, R.	Symonds, A. L.
Guy, W. H.	Morris, Lt.-Col. H. (Sheffield, C.)	Taylor, H. B. (Mansfield)
Hale, Leslie	Morris, P. (Swansea, W.)	Taylor, Dr. S. (Barnet)
Hall, Rt. Hon. Glenvil	Morrison, Rt Hon. H (Lewisham, E.)	Thomas, D. E. (Aberdare)
Hamilton, Lieut.-Col. B.	Moyle, A.	Thomas, Ivor (Keighley)
Hannan, W (Maryhill)	Murray, J. D.	Thomas, J. O. (Wrekfci)
Hardy, E. A.	Nally, W.	Thomas, John R. (Dover)
Hastings, Dr. Somerville	Naylor, T. E.	Thomas, George (Cardiff)
Haworth, J.	Neal, H. (Claycross)	Thorneycroft, Harry (Clayton)
Henderson, A. (Kingswinford)	Nichol, Mrs. M. E. (Bradford, N.)	Thurtle, Ernest
Henderson, Joseph (Ardwick)	Nicholls, H. R. (Stratford)	Tiffany, S.
Herbison, Miss M	Noel-Bakor, Capt. F. E. (Brentford)	Timmons, J.
Hobson, C R.	Noel-Baker, Rt. Hon. P. J. (Derby)	Titterington, M. F.
Holman, P.	Noel-Buxton, Lady	Totley, L.
Holmes, H. E. (Hemsworth)	O'Brien, T.	Tomlinson, Rt. Hon. G
House, G.	Oldfield, W. H.	Ungoed-Thomas. L
Hoy, J.	Oliver, G. H.	Vernon, Maj. W. F
Hubbard, T.	Orbaoh, M.	Viant, S. P.
Hudson, J. H. (Ealing, W.)	Paget, R. T.	Walker, G. H

Wallace, G. D. (Chislehurst)	Wilcock, Group-Capt. C. A B	Wilmot, Rt. Hon. J
Wallace, H. W. (Walthamstow, E.)	Wilkes, L	Wilson, Rt. Hon. J. H
Warbey, W. N.	Wilkins, W. A.	Wise, Major F J
Watkins, T. E.	Willey, F. T. (Sunderland)	Woodburn, A
Watson, W. M.	Willey, O. G. (Cleveland)	Woods, G. S
Webb, M. (Bradford, C.)	Williams, D. J. (Neath)	Wyatt, W.
Well, P. L. (Faversham)	Williams, J. L. (Kelvingrove)	Young, Sir R. (Newton)
Wells, W. T. (Walsall)	Williams, Rt. Hon. T. (Don Valley)	Younger, Hon. Kenneth
West, D. G.	Williams, W. R. (Heston)	Zilliacus, K
White, C. F. (Derbyshire, W)	Williamson, T.
White, H (Derbyshire, N. E.)	Willis, E.	TELLERS FOR THE NOES:
Wigg, George	Wills, Mrs. E. A.	Mr. William Whiteley and
		Mr. R. J. Taylor.

Main Question put, and agreed to.

Resolved: That an humble Address be presented to His Majesty as follows: MOST GRACIOUS SOVEREIGN, We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.

To be presented by Privy Councillors or Members of His Majesty's Household.