GERMANY

HC Deb 30 June 1948 vol 452 cc2251-331

5.42 p.m.

Mr. Bellenger

As I was saying when our proceedings were interrupted, my hon. Friend the Member for East Coventry (Mr. Crossman) was quite right when he urged the desirability of doing something to improve the present division of duties between Berlin and Frankfort. Not only is it Berlin and Frankfort, but there are other areas of Germany, Minden, for example, where important parts of the Control Commission and Military Government are located. I do not know whether the reason today is entirely physical, but the consideration of housing did contribute towards the location of many of these administrative headquarters.

There was what was known as the Hamburg project, but I am bound to say, in the presence of my hon. Friend the Member for Ipswich (Mr. Stokes) who, with others, was constantly raising questions of the displacement of the German occupants from their houses, that if we are going to bring the headquarters of the administrative organisations in Germany together and concentrate them, inevitably it will result in a certain upheaval in the life of the civil population, and, whether we locate it in Berlin or Frankfort, or in Hamburg, as it was intended to do, there is bound to be a good deal of displacement of the German population. The conditions in Western Germany, indeed in all Germany, are simply catastrophic. So far as I can see, very little has been done towards rehousing the German population and rebuilding their houses, and, until we can take some step forward in that direction, it is going to be very difficult to convince the Germans that we are doing something to rehabilitate their country.

So far as reparations are concerned, I should have thought that the German population had paid very dearly already without being loaded with some burden at some far distant date which they will never be able to repay. On the whole, my right hon. Friend the Foreign Secretary has done his best to try to get some finality in these matters. After the first World War, it took a year before we made a treaty of peace with Germany, and, although I recognise that that is not possible today and that it may not be possible to have a formal peace treaty for several years yet, nevertheless, I would urge my right hon. Friend to try to get some agreement with the Western Allies, even if we can get none with Russia, so that we can present to the German nation, both East and West, something for which they can work and to which they can look forward. At the present moment, the only policy they can see is a hand-to-mouth policy, and mostly mouth policy.

Their thoughts are concentrated mainly on the wherewithal in order to keep body and soul together, and I am not at all satisfied that the import and export arangements at present in force in Germany are utilising sufficiently even the very limited manufacturing arrangements which Germany has been able, or has been permitted, to recreate out of the vast devastation which was caused to the industrial areas by British and American bombers. I feel that much more could be done to allow the Germans to work for themselves and to sell the articles which they can produce, but which through administrative red tape they are not allowed to sell.

I was talking only the other day, tot example, with a manufacturer from the Hamburg district, and he said, "You know, it is remarkable what ingenuity the Germans are displaying in producing something almost out of nothing." He showed me one or two little mechanical toys which had been created, not from essential raw materials, because Germany is short of timber and metal, but out of scrap which is not of use to us for our steel industry, but out of which they can make something which will sell in the markets of this country and in other markets. I have reason to believe that there is a good deal of jealousy among the manufacturers of these and similar articles elsewhere, and I urge the Foreign Secretary to make sure, when he is discussing the limitations on production in Germany, that considerations of what I might call commercial competition between the victor nations and the vanquished do not predominate. If we are to get Germany on her feet, we must allow her to manufacture, because she was a manufacturing nation, and, like Britain, cannot hope to live unless able to manufacture. Unless she is able to sell her goods in foreign markets like ourselves, it will be impossible to recreate a Germany that will not be a liability on the Western nations.

I should like to say one or two other things in the name of humanity. At the present moment, under the beneficent and benevolent policy of the Home Office and the present Home Secretary, a lot has been done to enable Germans who want to visit relatives or friends in this country and others to do so, so long as they are not a charge on the British currency system, either in Germany or here. But what happens when an entry permit is obtained for people to come to this country? If these people live in the British zone it is not difficult, or not too difficult, for them to travel here, but, too often, if they live in the American zone—and I am sorry to have to say this—they have almost as much difficulty in getting an exit permit as they would have if they lived in the Russian zone. I say that that is inhumane, and, if the Foreign Secretary doubts this, I could quote instances to prove what I am saying. At any rate, it is quicker for German nationals to leave the British zone than it is for them to leave the American zone under almost equal circumstances, so far as travel arrangements are concerned.

There is another point which I would like to urge on the Foreign Secretary. I do not know whether it would be very popular, but my right hon. Friend has never sought cheap popularity or played to the gallery. I believe that we should not continue to visit the sins of the fathers on the children of Germany, and there is terrible under-nourishment among German children. Too often, when it might have been possible for them to get out of Germany try the exertions of friends, to Switzerland or Sweden for example, or even to this country where the food situation is far worse than in Sweden or Switzerland, those little children are not allowed to leave their country. Whatever may be said about keeping adult Germans tied to their own country, there are thousands of people in this country who would welcome some of those German children in their own homes. I know that a lot is being done by organised effort in the schools and so forth. I have a few children of my own but I would gladly welcome some of those German children and provide food for them out of our own rations. If I could bring some of those children to live in my home among my children they would learn far more about democracy in a much shorter time than they will in some of these more or less isolated camps to which they are being taken. It would not cost much; I can assure my right hon. Friend it would be welcomed by the British and other peoples, but at present it is a very difficult thing to do.

If we continue to let the German people believe that they are going to be a leper colony in the heart of Europe, outcasts, all these finely laid plans will come to nothing. We must give the Germans hope. It is no good merely sending their prisoners of war to the P.I.D. camps here at Wilton Park or letting Germans see some of the working of our democracy by very nicely illustrated newspapers or by lecturers going over there and talking to them. We have to give them some faith in which to believe. I suggest that the best hope we can give them is hope and faith in themselves, and we should permit them to achieve what they can.

5.53 p.m.

Mr. J. Langford-Holt (Shrewsbury)

One of the many undesirable things in the sphere of foreign affairs is for hon. Members who have paid one or two visits to a foreign country to come back to our Debates and fancy themselves experts in that sphere and able to speak as experts. I myself have been to Germany for the first time since the war; I came back two weeks ago, and I would not presume to discuss the many and varied features of that problem. But one thing which is manifest to anybody visiting Germany is the mood of the people. I think that is one thing which one cannot help noticing. Therefore, in what I have to say I will confine myself to the moods of the three peoples most intimately concerned in this problem—the Germans, the Russians in so far as we can see the Russian mood, and the people in this country.

In Germany there are basically three main categories of individuals. There are those Nazis or ex-Nazis—not very many of them—whose only regret is that Hitler lost the war. Then there are the Communist sympathisers, whose numbers one is quite unable to assess; and lastly, and more important, there is the whole vast middle-of-the-road class who are looking round and hoping for something in their future. They are, above all else, looking to us in this country and in America. During the war we buoyed up their hopes through broadcasts and other means. As I have said, without going into the details of the matter, I should like to impress upon the Government and upon the Foreign Secretary in particular, the absolute necessity of providing for those Germans something on to which they can lay hold, because it is quite immaterial to them whether they fall towards Fascism, Nazism, Communism or some other "ism." The finest form of life which we can present to them is a democratic form of life, and the future of Europe certainly depends upon our ability to do so.

My right hon. Friend the Member for Warwick and Leamington (Mr. Eden) did not press the Foreign Secretary to disclose any plan that he has got. I think I am right in saying that he expressed the confidence that such a plan exists, and on that I would like to follow my right hon. Friend. I would not press the Government to declare in this House or anywhere else their plans for the future, but I hope—indeed, I pray—that such a plan exists. I hope, as did my hon. Friend the Member for Melton (Mr. Nutting), that the Government have in mind the possibility, if not the probability, that a similar problem may occur again. I hope they have not shut their eyes to that possibility. If they have not done so, it is their bounden duty to have a plan ready to execute here and now if necessary.

I was very disappointed to hear some of the observations of the right hon. Member for Bassetlaw (Mr. Bellenger). I think he expressed the hope that we in this country should now meet the Russians half way in this matter. I am one of those who feel that we have gone far further than half way, and, in view of the position which the right hon. Gentleman held, his observations will be given the widest publicity in the very quarters where it will have the worst result. I believe that, above all, we must keep faith now. Any withdrawal on our part at this stage will be misunderstood and misinterpreted by our sympathisers and by those who are out of tune with us. Let us establish once and for all that the setting up of the four zones in Berlin carried with it the absolute duty—the moral duty, certainly—to supply those sectors with the means of livelihood, trade and communication.

I was very glad to learn of the resolute declaration by General Robertson yesterday. I was equally glad to hear the Foreign Secretary make his statement this afternoon. The dangerous thing for us to do in the cause of peace is to carry out a series of bluffs. We should have learned by now, from experience, that it can only result in disaster if we rattle the sabre and show the scabbard when we have no intention of drawing the sabre should the horrible necessity present itself. Like many other hon. Members, I had hopes that at the end of the last conflict we might have started a new era of relationship between ourselves and the Soviet Union, but it became obvious at an early stage that those hopes were not to be realised by the methods under which we are at present working. The Foreign Secretary said earlier that he would not take precipitate action to destroy peace. I think it is the mood of this country that the Foreign Secretary should stand firm on the position which he has now taken up. To withdraw now may not necessarily be a precipitate action to destroy peace, but I believe if we do withdraw, this country will have taken the first, and an irretrievable, step towards the next world war.

6.0 p.m.

Mr. Skeffington-Lodge (Bedford)

The hon. Member for Shrewsbury (Mr. Langford-Holt) must forgive me if I do not follow him in what he has been talking about. I think what he said very much over-simplified the issue and, as I see it, did not show that balanced approach which I myself will hope to bring to bear on the situation. Like some of my hon. Friends who have spoken from this side, I do not propose to concentrate unduly on the present crisis in Berlin. It is, I know, of vital moment that it should be properly covered in the Debate, but there are wider issues to which we should address ourselves, and I think the hon. Member for East Coventry (Mr. Cross-man) touched on some of them in a quite admirable way.

The moral and the spiritual issues which have been aroused in Europe in the last 15 years are, in my view, not adequately or fully appreciated as yet by the people of this country. There we have, in that continent at the present time, 350 million people, some of the most gifted and some of the most civilised people in all the world, floundering in a morass of poverty and acute misery. Most of them feel they have lost all control of their own destiny. That is the background to our discussion today and it was also largely the background to Hitler's rise and the appeal which he made to the German people of those days.

How can a sense of co-operation and a sense of purpose be restored to these fellow human-beings of ours? It is this question to which I want to apply myself for a few minutes and which I want to try to answer. That in Germany lies the key to the solution of the present international crisis is, of course, clear for all to see. I have myself just come back from a visit to that country and one rather encouraging sign, I think, was that although until recently the Germans have been unsure of our intentions—and many of them are still to some extent in that state—neither hunger nor over-crowding, nor the spread of disease, nor an almost valueless currency, nor the demoralisation of a huge black market, have led them to abandon faith in us or in eventually proving themselves to be worthy European citizens.

The German people may be—indeed, they are—hungry today in mind, body and estate. They are, in that condition, very much looking to us for sustenance and for encouragement and for a lead which, I believe, we alone can give them. After two and a half years havering and wavering, representing, as I believe, the measure of the divergent views between America and ourselves with regard to public and private enterprise in the future Germany, some of our ex-enemies have naturally come to think that all we believe in is controlled chaos. Moreover—and this is very important—our publicity and our propaganda to the Germans has at times been remarkably bad. At a meeting which I addressed in Nuremberg about a fortnight ago, there were no less than 35,000 supporters of the S.P.D. present, and I rather startled some members of the audience by telling them that every man and woman taxpayer in this country has every year since the end of the war expended £2 per head to keep the Germans in the British zone alive.

In condemning, as I did, the almost exclusive concentration of the available building materials in Bavaria on restoring churches, I stressed our own building struggle here in Britain, again to the amazement of many of my hearers. That, I think, proves my point that our propaganda to the Germans has been inadequate and that they do not really know what we ourselves are up against. If the outlook of many in Germany is born of an over-developed self-pity, it remains true that we ourselves have not done all we might to preserve in their minds a true sense of proportion and to tell them of our own and other people's difficulties.

I have referred already to the uncertainty of what is to happen which is uppermost in many German minds. The Allies seem at one time in their policy—if it can be called a policy—to have decided on the destruction of Germany as a nation. At another time they seem to have decided on her rehabilitation. The recent six-Power Agreement, if it has done nothing else, has let everyone know where we now stand. Even now, and the hon. Member for East Coventry pointed this out, there are aspects of that scheme which are open to serious criticism. For instance, the maintenance under it of any continuation of dismantling in present circumstances seems to me to be quite crazy, and to German workers it looks more like an act of war than anything else. Production should surely be encouraged from to output which is not connected with militarism. It is very silly to continue, as we are doing, to cut off our noises to spite out faces, for that is what the dismantling policy seems to me to be.

I would like to mention reparations for a moment. Reparations are in many ways a doubtful asset any way, but if we are to have reparations from our defeated enemies it seems to me that they can best come from the production of factories which are refurnished and supervised by German technicians and workers themselves, with a really remote and co-operative Allied inspectorate. In this matter, it seems to me that our attitude has been too Maginot-minded and altogether too self-defensive.

I believe that if a resurrected Germany is to play a proper rôle as a full partner in Western Union, we must say quite plainly what we think offers the best—yes, the only—hope of making it a going concern. While I know we cannot dictate policy to the Americans we should, I feel, support the viewpoint of the German workers themselves about the vital matter of socialisation. That view is quite clearly that the nationalisation of heavy industries means almost everything to them. That viewpoint is shared, too, by those of our French friends who regard with considerable alarm the fact that no measure has been proposed whatever to expropriate the big industrialists of the Ruhr and the Rhineland under the new Six-Power Agreement. Unless wide and firm central control is applied in relation to the economy of all the countries participating in Western Union, I personally can see no real hope of its ever being a success. It is this country which should say this quite plainly for all the world to hear, and say it quite openly. Our hands would at least then be clean if—as God forbid—failure to organise Western Union economically did put paid to all hope of creating that spiritually infectious conception of social democracy for which the whole continent of Europe is yearning.

I think people who are not Socialists in Europe would note our warning and would be willing to follow our advice. I think even America would come to see we did know what we were talking about rather better than they do, for they have—have they not?—shown themselves rather inept in recent diplomacy—to put it no more strongly than that. Inter-country planning which leaves ever open, as it must, the possibility of an economic merger with Eastern Europe is absolutely vital if a permanent split on the continent is to be avoided, and with it a third world war. To denounce the evils of Communism, as so many do, is no policy at all. Nor is it a policy to leave Western Union dependent on the whims and caprice of capitalist and big business enterprise.

We must be positive. We must make Social democracy for all the world to see a living, vital, dramatic reality wherever our own influence counts. This, I believe, can happen only through the wide application of Socialist methods and principles. The alternative may well be—and we had better face up to it—that the Germans and others would come to prefer an end with terror rather than terror without end. We dare not alienate the best political elements in Germany. We are doing that to some extent. Already they see us in many cases being outmanœuvred. Already they are alarmed by the trend in some quarters to allow Western collaboration to degenerate into a policy for the military containment of the Soviet Union. Already they view with distaste the idea of replacing one set of capitalists with another. They know as well as we do that Communism can never be crushed by atom bombs, any more than Western civilisation can be or will be folded up by prods or pinpricks from Communists in Russia or elsewhere. The fatalists who talk of inevitable war waged by fearsome new devices are just as harmful to the cause of co-operation and peace as are the fanatics who pursue their cunning aims with an inquisitor's zeal and an inquisitor's cruelty.

I have not touched very much on the Berlin position. There the physical facts must be matched to considerations of prestige. I am not quite sure this so far has been done. As it is, and having committed ourselves, I entirely agree we must be and must remain absolutely firm, especially, I would add, as I think that Russia's hostility is technical and administrative only at the present time. [HON. MEMBERS: "Oh."] Russia does not want war any more than we do. If there are weak spots in our armour, so has Russia weak spots in hers. The Yugoslav developments of this week prove that Russia has by no means as yet fully consolidated her satellites.

We must surely in these circumstances take care to dissuade our American friends from any precipitate action, and we must at the same time with all speed press on with making Western Union economically and spiritually an outstanding success. Above all, we must continue to be a steadying influence on the Germans by standing by our principles, and combining with that the exercise of a large measure of the patience so fully possessed by the Foreign Secretary. If we do not do that, and by a courageous example show that we believe in learning all over again to love our neighbours as ourselves—and our neighbours comprise the German people—the fearful alternative is that all of us, one day not very far hence, will be called upon to die with them.

6.15 p.m.

Mr. Godfrey Nicholson (Farnham)

The hon. Member for Shrewsbury (Mr. Langford-Holt) began by saying what a deplorable thing it is if Members of Parliament come here to pose as experts about a country after only one or two visits to that country. I agree with him; but I think Members of Parliament may fulfil a useful, if minor, function if, after such visits, they report in this Chamber the opinions of those who are experts, our fellow countrymen on the spot, people who know the facts. I think that as Members of Parliament we are qualified to collect opinions, even if not to become instantaneously experts ourselves. In the hope that that is the case I venture to detain the Committee for a very few minutes to try to tell hon. Members something of the frame of mind I found in Berlin within the last fortnight. I think the state of opinion in Berlin amongst our own countrymen, amongst our Allies and amongst the Germans, is somewhat different from that which exists here about the whole problem.

I found a very much greater anxiety on a certain score and very much less anxiety on other scores. The score upon which there was great anxiety and much questioning was the simple issue, Are the Government going to stand firm? The question was, "Are they behind us in determining to remain in Berlin?" The Foreign Secretary's speech today will successfully have relieved all apprehensions about that. The reasons have been enumerated by several speakers and so I shall not attempt to add to them. There was not the same anxiety in Berlin as there appears to be here about our ability to remain there, provided full and firm support is given from behind. It often happens in a crisis that there is greater calm and less apprehension at the nodal point than at the perimeter. I think that is evident in this particular case, and for these reasons.

I believe that those in Berlin, the Allies and the Germans, are more aware than we are that the Russians are waging a war of nerves and not a war of blood. They realise that they are in an extremely isolated, and, militarily, quite untenable position, and they ask themselves why the Russians should wage a war of this sort when they could walk into Berlin at any moment if they mean to wage a war of blood. Let us remember that the state of public opinion in Russia is such that there is no need for the Russian Government to convince their people on the question of casus belli, so they can walk in when they like.

This war of nerves has been going on in Berlin at least since the beginning of April, and it has been marked by a policy of pinpricks on the part of the Russians, followed by minor concessions. I think I should be right it saying that the feeling in Berlin is, that once the Russians are convinced that the war of nerves cannot work, the concessions will be increased, and that the Russians have no intention of bringing things to a head. So I think we are entitled to feel rather more optimism than I have seen demonstrated so far here today. We find there again all the old manifestations of what used to be called "Oriental diplomacy." I am convinced that, if this is a war of nerves, the first thing to do is not to allow our nerves to be affected, and to take a calm view of the situation in the conviction that, granted 100 per cent. firmness at this end, Berlin will be held, and that we shall be able to stay there.

I believe that we in this country are not as aware as we might be that we have some very strong cards. The strongest card is the declaration of firmness, which we have played. There are other strong cards as well. I do not know whether the Committee are aware of the extent to which Eastern Germany is dependent upon supplies from Western Germany. The industries of Poland, the Russian zone and Czechoslovakia have not yet been mobilised sufficiently for the Russian zone to do without coal, steel and other supplies from the Western zone. I do not know if the Committee is aware of the extent to which Berlin industries are sending goods into the Eastern zone. Nearly 40 per cent. of the production of the firm of Siemens, the great electrical firm in the British sector, goes into the Eastern zone, and the evidence shows that the Russians are not yet prepared to do without it. As part of their policy of pin-pricks, at the beginning of April, Siemen's delivery of finished goods to the Western zone was held up by the Russians, but not all the time. It was held up for a time, then a concession was made and several hundred thousand marks' worth of goods was let through, and then there was a further hold-up. There is a great deal of evidence that the Russians are not prepared to cut off their nose to spite their face and to do without further supplies from the Western zone. Coal and steel production in Western Germany, as well as other manufactures, are a very powerful bargaining card, so do not let us lose our heads too much and think that we have no cards at all to play against the Russians.

Finally, I wonder what steps we are taking to provide answers to the Russians' constant and powerful propaganda? If I may recount a personal experience, I was fortunate enough to have an entirely off-the-record conversation with two Russian officers, who spoke quite frankly. The first thing they said was, "Why are you always attacking Russia and being so difficult?" Then they said: "Take the case of Colonel Tassoev. Is it in accordance with Western diplomatic practice to kidnap an officer of an Allied Power, take him to a London police station, and torture him?" Naturally I contradicted them, but I wondered what steps we in this country had taken over the air to see that the truth of that extraordinary story was made known to those Russians who listen in. I believe that the B.B.C. are of the opinion that there is a fairly good listening public in Russia to British broadcasts. Do not let us ever forget that the Russians are fanatical believers in the theory that the Red Army is the greatest civilising force in the world. They think that Russia is always innocent; she never sins and is always sinned against; and that the Western Powers have not a single argument in their defence. We should wake up to the fact that it is time that we put our case in a non-tendentious way to the Russian people and to the Red Army. I hope that I have not detained the Committee too long, and that no one will think that I am trying to pose as an expert on Germany.

6.25 p.m.

Mr. Stokes (Ipswich)

I should like to endorse what the hon. Member for Farnham (Mr. Nicholson) has said about the "wind up" being at this end and not in Berlin. Coming recently from Berlin, I agree that the atmosphere there is far steadier than it is in this country. That is, no doubt, largely due to the Press. There are few newspapers there, and what there are do not give any news. I should be churlish tonight if I did not pay my tribute to the right hon. Member for Warwick and Leamington (Mr. Eden) and to the Chief Whip of the Liberal Party the hon. Member for Northern Dorset (Mr. Byers) and if, having so often complained on behalf of back benchers of the length of Front Bench speeches, I did not congratulate both of them on being brief and to the point. I commend that practice to Front Bench speakers on both sides, and particularly to those right hon. and hon. Gentlemen who wind up Debates and who have a nasty habit of getting up much too soon.

The Temporary Chairman (Mr. Diamond)

I hope that the hon. Member is not forgetting the Votes which we are discussing—they refer to Germany.

Mr. Stokes

I felt that I must pay my tribute to the way in which hon. Members have reacted to the representations which I have tried to make on behalf of those who want to speak. I was glad that the two hon. Members who opened the Debate, and the Foreign Secretary, took such a firm line about Berlin. I am sure that is absolutely essential to our position in Europe. The excuses which the Russians are giving for cutting off the lines of communication are too frivolous for words. If we examine, as an example, the currency one, which the Foreign Secretary exploded, one of their points about that is that they must stop communications because currency will pour up the autobahn and wreck the currency in their sector and in the Eastern zone. It is far easier to carry all the currency one wants to the Eastern zone through the woods than to take it up the autobahn. No one in their senses would dream of loading lorries with currency and taking them along that 100 miles stretch of closely-guarded Russian road.

The second excuse was that the bridges were broken down and the railways out of action. It is an extraordinary coincide- ence that those responsible for maintaining the lines of communication, as the Russians are, should find all the railways and bridges go wrong at the same moment. Of course, that is not true. The only consolation to be got out of this situation is that the Russians are making themselves more unpopular than ever in Germany, where they are quite seriously disliked. Much as we may be disliked, we are considered a sort of answer to a maiden's prayer in comparison with the Russians. When we think of the state of the people coming from the Eastern zone, the state of the returned prisoners of war, and the realisation by the German people, who have recently discovered from Red Cross reports and examination of people who have come back, that 1,600,000 prisoners of war had died in Russian prisoner of war camps, this on top of that is not causing a more favourable attitude on their part towards the Russians.

I find—and I speak not as a great authority on Germany but as a frequent visitor there—that things in Germany are better than they have been since the termination of hostilities. I regret that no one more important than myself has paid tribute to Lord Pakenham for the contribution which he has made to the state of mind in Germany. Whatever we think in this country—we none of us think much of our politicians, anyway, on either side—we do not attach enormous importance to individuals because that is not our way, but those of us who have studied the German problem know that very great affection and regard attach to Lord Pakenham for the contribution which he has made in giving the Germans inspiration and help in their great and. complex difficulties.

I welcome the change recently announced by the Commander-in-Chief with regard to the non-fraternisation regulations. I only hope that his instructions will be carried out by the Control Commission and by the Army in the spirit in which, I am sure, they were offered. I did not observe that they were being carried out when I was there. There was still far too much reluctance to accept the German people in the way in which they should be accepted, as brothers and friends in a joint effort to reconstruct the whole of Western Europe. I welcome, as did the hon. Member for East Coventry (Mr. Crossman), the currency reforms and particularly the taxation relief. I am not sufficiently aware of the details of the currency reforms now proposed, to go into them in detail. My hon. Friend the Member for East Coventry discussed them at some length, and I do not want to be repetitive. The anxiety I think is lest we have not timed them right. I agree that it is urgent that the reforms should come about, but it does not need a Senior Wrangler from Oxford or Cambridge to make it clear that currency reforms without availability of consumer goods only means that there will be a worse disaster, and that there will have to be further currency reforms at a later date.

I know the theory is that the result of this currency reform now, will make the farmers bring their food on to the markets and trade in the normal manner in exchange for utensils, repair parts, and all the rest of it, which they are to be able to get; that manufacturers will disgorge from their sheds all the things they have been making, and of which they are now to be encouraged to make more and that more goods will appear in the shop window. I do not find among responsible Germans a real belief that raw materials are really backing up the situation sufficiently to keep that process going. If that proves to be the case, the situation will be absolutely disastrous.

With that in mind, and with the whole question of Western European rehabilitation in mind, I want to spend the few moments during which I propose to address the Committee on the question of dismantling. There is standing on the Order Paper in my name and that of about 20 other hon. Members a Motion demanding that dismantling should cease. I question the wisdom of continuing to dismantle useful works at a time when we are trying to rebuild Europe, and very much for the following reasons. First of all, so far as I have observed it, our American Allies have stopped dismantling altogether, except in so far as it relates to purely war plants—and none of us; I think, is suggesting that we should do other than continue to dismantle what are purely war plants. But I cannot discover, and have never succeeded in discovering, how this level of industry plan, which decides what is available for reparations, is measured. I have never found anybody in Germany or in this country willing to try to tell me until the other day. I am now quite satisfied that the method of measurement is absolutely bogus, as I always thought it was. I do not believe that the people who measured it had the slightest idea what they were doing. They could not have had. I am in the business myself, and I could not do it, and I should not expect other people to try.

There is no difficulty, of course, in saying that someone shall or shall not manufacture motor cars, or shall or shall not manufacture a certain quantity of a certain type of goods. But when we come to this general engineering question—a thing very near and dear to my own heart, and a thing very essential in reconstruction—I find that what they have done is inconceivably stupid; they have assumed that the way to arrive at what could be dismantled was to take 75 per cent. of the value of the 1936 output, add the factories all together, and then take away 25 per cent. and call it a day. Well, of all the idiotic methods of approaching the engineering problem, that is the worst. The other day in Berlin I asked an official, who was put on to me, to explain how it was done, and that is precisely what he told me. That only confirms what I have said so often before: I do not believe anybody knew what they were about in that particular part of the dismantling programme.

I go further in support of my contention. The other day I discovered a document signed by the leaders of the mining industry in the Ruhr, in which as late as November last year they were complaining that the dismantling programme had been decided upon without any consultation of any kind whatsoever with the people organising the mining industry. I have it here, and I can give my right hon. Friend a copy of it if he likes. I would sooner not do so at the moment, for reasons which I need not disclose to the Committee. What really happened in consequence was that a set of bi-partite investigators was put on the job; they re viewed the situation in February, but after having been asked to report as a result of this complaint they did not even then consult the mining authorities in the Ruhr. What has happened? A number of factories which make mining equipment are still being demolished. Perfect insanity!

Mr. Bellenger

British officials?

Mr. Stokes

Yes, in the British zone.

Mr. Bellenger

Is the hon. Member referring to German miners or to the British officials there?

Mr. Stokes

I am referring to British and American officials in the Control Commission who complained; more British officials went on the job to examine the situation; they never consulted one another, and naturally arrived at the wrong results, as I will go on to explain in a minute. Mr. Hoover wrote a report—of which very little notice was taken in this House—on the whole dismantling question, entitled "Destruction At Our Expense," to which he wrote a very sensible short foreword, which reads as follows: At a time when the world is crying, and even dying, from lack of industrial production we apparently pursue the policy of destruction of the gigantic productive equipment in the Western zones of Germany. It means less essential goods to all Europe, greater delay in recovery of the world and larger drains on the American taxpayer. And, of course, that goes for the British taxpayer, too. He went on to analyse the situation, and said at the end of his booklet—which my right hon. Friend can have if he likes—that of the priority necessities reported on by the Herter Committee, 49 steel producing plants, 31 steel rolling mills, 53 pipe producing plants—of which there is a great shortage—14 road building plants—about which I have complained in this Committee before—and 47 plants manufacturing mining equipment in the British zone are all due for dismantling, which in Mr. Hoover's view it was necessary to get going, not only for German economy, but to help generally in the revival of Europe.

Mr. Hoover goes on to explain what everybody ought to know but nobody seems to know—that a factory cannot be pulled down and be expected to be of the same value when it is on the floor as it was when it was standing up. That is quite elementary. [Laughter.] Well, people do not realise it you know; they think a factory can be taken apart, packed up and sent off, and still be of the same value, and that everything will work when it gets to the other end. Were I in the Germans' position I might be tempted to make certain that nothing worked when it got to the other end. I have no doubt there has been a good deal of sabotage; the Germans are not fools.

That report also shows what happened to the Borbeck plant—one of the big steel plants in the Ruhr. Before dismantling it was valued at 120 million marks; when pulled down it was valued at 9.5 million marks—8 per cent. Any accountant could tell hon. Members the same thing. We know perfectly well what is the value of an engineering works as a going concern, but when it is dismantled it is scrap, and that is all. To imagine that thousands of tons of material which represented work for 3,000 workers could be pulled down and carted halfway across the face of the globe and put up again is fantastic nonsense. But this is still going on. When I ask Questions of my right hon. Friend on this, as I did this week, I am told that other people have suffered and must have some form of reparations. I am not disputing that; but I do dispute the form of reparations he is trying to give them.

I would say, generally, on reparations that I doubt very much if we are legally entitled to take reparations until there is a peace treaty. I should like to hear the opinion of an international lawyer about that. I believe that reparations form part of peace terms, and are not a consequence of the cessation of hostilities, even if that involves unconditional surrender. I believe that reparations taken before a peace treaty are loot, and nothing less. Hon. Members may not like the term, but that is what I believe it is in international law.

I now wish to say a little on the whole question of steel and the level of industry. While I welcome the Six-Power agreement on Germany a new situation has arisen. I must tell the Committee of a meeting at Dusseldorf last November of all the "big bugs" on the level of industry question, who fixed the amount of steel to be allowed in accordance with, I think, the Moscow agreement, namely, 10.7 million tons a year. What I emphasise about the Dusseldorf meeting as distinct from what was said in Moscow—or wherever it was that the figures were set—is that it was strictly stipulated at Dusseldorf that that was for Germany alone, and that there must be no export of semi-manufactured goods. That was a fantastically nonsensiscal thing to say anyway, because before the war Germany used to export 2½ million tons. How on earth is she ever to get upon her feet again, with a population of 55 million, unless she is allowed to export some of the obvious things like steel. Now, very sensibly, the Six-Power Agreement recognises that that will not do, and it is laid down that the six Powers may, by agreement, export steel from the Ruhr. If that is so, I hope that my right hon. Friend will think again about this, dismantling because it is essential that the production capacity that is now being pulled down should be left up, otherwise it will be impossible to rebuild Europe on the lines no doubt contemplated by the six Powers when they signed this Agreement.

I know the old complaint, that if too much steel is left for the Germans they will build a war potential. If we examine the figures today it is really nonsensical. In this country we are producing steel at the rate of 15 million tons or a bit more, and we hope for more next year, the Americans something like 91 to 95 million tons, and the Russians 28 million tons, which they hope to increase to 50 million tons in a few years time. Is it really believed that to allow the Germans to go up from 10.7 million tons, which is what they want for themselves, to 15 million tons will provide a war potential? I think it is absolute bunkum. We shall never get ourselves and Europe going unless we allow the German wheels of industry to get going again.

It is no answer to me to say—and I hope that my right hon. Friend will not give it to me today—that Germany cannot under present conditions produce 15 million tons. I know that, but it is insanity to pull down the equipment needed to reach that output, with our eyes wide open, merely because they cannot produce that amount now. On the question of the control of heavy industry and coal, I should be happier, and my German acquaintances would be much happier, were the control of iron and steel and coal in the Ruhr made part of the control of iron and steel and coal throughout Europe. That seems to me to be the proper way of approaching the problem, which most of those with our way of thinking on this side of the Committee would equally wish to see carried out.

Why is it, despite definite instructions from the Under-Secretary—and a letter was written about this on 20th April of this year—that buildings of real value are being blown up and knocked down? I have not yet seen the answer to my Question which appeared on today's Order Paper about Eckenforde—perhaps my hon. Friend can tell me what it is—but I have received a long telegram complaining that this very building which he guaranteed to me in writing would not be blown up, is down for destruction on 28th June.

The Under-Secretary of State for Foreign Affairs (Mr. Mayhew)

The answer is that that is not so, and that my hon. Friend is quite misinformed.

Mr. Stokes

I am very glad to hear it. But I am not misinformed about this. I went to the Deutsche Werke at Spandau. I am not arguing whether the Deutsche Werke is a category 1 concern or not, but there was a magnificent block of offices which was capable of being converted into 200 or 300 flats and the whole thing is being knock down. Who is the lunatic who does this sort of thing, knocking down this beautiful building, when hundreds of thousands of people are without any decent living accommodation? I hope that my right hon. Friend will be able to tell me, or, if not, that he will look into the matter. It really has the worst possible effect on these wretched people; we all know that there is far too little building going on there at the present time. I conclude on that very unsatisfactory note in regard to dismantling and hope that I shall have some assurances from my right hon. Friend when he comes to reply.

It would obviously be out of place if I finished without saying a word about food. The rumour has now got abroad in Germany that from tomorrow the calorie level is going up to 1,800 [An HON. MEMBER: The figure is 1,750."] Well, it has gone down 50 already. A calorie value of 1,500 has been promised for years, but in May this year the North Rhine and Westphalia only got part of that value, and 1,500 calories is not a great amount. Now we are told that the figure is to go up to 1,750 for July. All I want to say is: "For Heaven's sake see that that is the amount the population gets, because people in Germany are fed up with being promised food they do not get." It really is a most unsatisfactory and depressing state of things for these poor people who have practically nothing to eat and have not had their rations for goodness knows how long. I hope that the amount will be kept at the 1,750 level and will not be cut down.

I conclude with a few remarks about the Sixth-Power Agreement. I have had a doubt in my mind whether a federal form of government will work in Germany in present circumstances. Quite frankly, I do not believe that it will. I do not see how we can get the people who have the food, to send it to places which have not got the food, unless there is some central authority to force them to do so. I cannot understand how, under a federal system, the farmers in Bavaria and Schleswig-Holstein can be made to turn out their food and send it to Westphalia, or wherever it may be. We have to have a central government whether the Americans like it or not. I do not think it will work, because history has shown that if a government is imposed on people they never like it and never keep it. The thing to impose on them is something which you do not like yourself, and then the chances are that the people will throw it out for something you do like. If only all these people who are talking in Washington about a federal government could be made to realise that what is wanted is a central machine, we should be able to get the best of two worlds—get the Government we like, and get the machine running now.

I say to the Control Commission in the end "For Heaven's sake clear out." I say that in no mean spirit. The Control Commission have been very kind to me and I have had every kind of help when I have gone there, and I have been there many times. The Foreign Secretary was most generous in his opening remarks in saying what a great help I have been. I did not expect to get that, but I am very much happier as a result. The fact is, however, that we have an idiotically large number of people there who ought not to be there at all. It is quite unnecessary to have 15,000 members of the Control Commission. It is not the fault of the Commander-in-Chief; the fault is here. We ought to have what we have been saying ever since the war ended, a handful of officers on top and ground observers if you like. I do not know what the grade would be, but we should not want more than 1,000 of them. We should, of course, have the Army of Occupation, but please let the Germans get on with the job. It is no good these people interfering and treading on one another's toes, getting an overweening sense of their own importance. There are only about half a dozen of them whom I would keep there; the rest can be cleared away. I agree that that may be an overstatement, but what we want is a handful of men of the type I have described. I ask my right hon. Friend to get on to his right hon. Friend and really sit on his back until we get something done and put an end to this waste of the taxpayers' money.

6.48 p.m.

Brigadier Head (Carshalton)

I do not wish to detain the Committee long, and I propose to confine my remarks to the situation in Berlin. For that reason, I hope that the hon. Member for Ipswich (Mr. Stokes) will forgive me if I do not follow him. I hope he will also forgive me if I say that it seems, even from this side of the Committee, that he has made a very valuable contribution to this Debate. He appears to be in the rôle of someone who is the acting leader of an underground movement to bring common sense into the industrial administration of Germany, and in that he has, I am sure, the sympathy of many Members on this side of the Committee.

I do not think anyone will quarrel with the general statement of the Foreign Secretary concerning the present situation in Berlin. It struck me that it was a most welcome reassurance that we in our policy so far as Berlin was concerned, would stand firm. My fears concerning the situation in Berlin deal not with the present so much as with the future and how events may develop. It seems to me that so often in the past we have had trouble through a lack of realisation or a refusal to face the way events may eventually develop. I realise that any decisions of policy in this matter are not for this country alone; they must be reached collectively by the Western Powers. I also realise that this is a most delicate matter which should be discussed with care. Nevertheless it seems to me that it is important that in these Debates in the House of Commons we should say not what we think we ought to think, nor what we want to think, but that we should state quite frankly the way in which we think events may run in the future. Accordingly my succeeding remarks will be directed towards how it seems to me that events may turn out. If they go well there is no problem, and what we are discussing about the situation in Berlin will disappear like smoke.

In order to discuss the future of this situation, I propose to make two assumptions. They are, of course, gloomy assumptions, but they are assumptions which we should be ill advised to ignore as regards the future. The first is that the Russians will remain obdurate in closing land communications to Berlin. The second assumption I make, without any specialist knowledge of the situation but based upon my own experience in the past, is that we cannot continue indefinitely to supply 2½ million people with food and fuel by air alone, especially with the winter ahead of us. Everything I know suggests to me that present stocks and concentrated foods may allow us to do that for a limited period but I cannot believe—and I believe it is wishful thinking to believe—that we can continue to do that indefinitely. It seems to me that the effort would be immense and that with the winter, unemployment and lack of fuel before us it will not indefinitely be practicable.

If those two assumptions are agreed upon, we cannot avoid coming to the conclusion that eventually we shall arrive at a period when the position of these 2½ million Germans in Berlin and our own position in Berlin will become intolerable. When that day arrives we shall be right up against a decision which will be forced upon us by events. That decision will either be to insist upon, or seize, a land line of communication or to get out. That is the ultimate crisis point, and in discussing the situation in Berlin I believe it to be wrong to turn away from facing that fact. We shall do good rather than harm by admitting the tact to ourselves today and realising that it may come to this.

It is easy, in the atmosphere which exists at the present time, to say that we shall stand firm, but might I ask the Committee to consider what the atmosphere is likely to be when this particular crisis point is reached? It seems to me that, as opposed to the comparative calm of today, we shall have a situation in which the population of Berlin will be cold, hungry, half starved and their morale very low. We shall have a situation where Russian propaganda will be pumped full bore at those Germans to assert that the reason for their discomfiture is entirely due to the obstinacy of the Western Powers. We shall have a situation in which a war of nerves will be in full blast; quite likely a certain amount of troop movements will be taking place. We shall have a situation in which the entire Russian bluff machine will be turned on in order to try to frighten us out of Berlin by representing that if we insist on a land line of communication there will be a war. It seems to me that if the ultimate decision has to be taken in that atmosphere, we shall be immensely increasing two risks. The first is that through the Russians believing that we are still bluffing, we shall blunder into a war which neither side wants. The second reason is that through the pressure put on us, democracy might once again show its almost inherent weakness by buying time at the expense of honour.

It is my feeling, and these are not pleasant words to have to say, that it is the duty of everybody in authority in the free countries of the world today to do everything they can to prevent that ultimate decision having to be made in that dangerous atmosphere, because I believe if it is left until then, the chances of either a conflict or a withdrawal will be increased. Hon. Members may well say, "Those are easy words but how could such a course be implemented?" I say again that I have no expert knowledge of the situation, but I feel most seriously that something could be done now to try to avoid the arrival of that ultimate crisis point. It seems to me that the staffs who are at the moment concerned with the feeding of Berlin must, on the assumption that no land-line communication is available, be capable of working out an estimate of the time when our position and that of the 2½ million Germans in Berlin will be intolerable. That situation may be a long way off or it may not, I do not know, but they must be capable of making a fair estimate of that, taking into account the advent of winter and the necessity of fuel as well as food.

If one takes that ultimate crisis point as Z-day, it seems to me that careful consideration should be given to whether or not the Western Powers should not now say to the Russians—at Moscow, not Berlin—that at a date at least a month, preferably longer, before that critical point arises, we, the Western Powers, demand that by our rights under Treaty, and in order to fulfil our obligations to those Germans, a land-line of communication be opened to us. In order to assist in that, there would, of course, be an offer of full facilities and technical aid. But let us fix that date well before we arrive at the moment of ultimate crisis. Then say, "If it is found impossible to clear the present technical difficulties of the land communications into Berlin, we shall consider it our duty, as part of our obligation to Germany, and by reason of our rights under the Treaty, to repair that land-line of communication ourselves." If that in turn is resisted then a very grave situation will have occurred which, it seems to me, cannot be viewed as anything but a casus belli.

These are grave words to use in this situation, but if Members say "This is irresponsible sabre-rattling," may I ask them to consider three points? First, the Western Powers, the democracies, have got into two wars in the past not through adopting a line like this, but through failing to adopt such a line. Secondly, it is my absolute belief that the Russians do not want war. From my experience, I think that for any country, however large, however dispersed, to consider going into a war in which there is the likelihood of unilateral atomic warfare is a crazy undertaking. If the Russians really want war, it is my fearful belief that there will be one. But at the moment it is my belief that they do not want war and that the greatest danger of war is that we should blunder into it by leaving the situation too late. Lastly, the third point which I bring to the notice of hon. Members is that if the easy course is adopted, and the easy course, especially with the American elections in the offing and the natural inertia of democracies, is in a crisis to say that we stand firm until the crisis point is reached, the dangers of blundering into a war when that crisis point comes are greatly increased.

I hope that the Foreign Secretary or the Under-Secretary will take these remarks in the spirit in which they are made, as an attempt to make some contribution to the Debate. I know that I have no special knowledge, but I suggest that some such line as I have suggested is worthy of consideration because the lessons of the past indicate that the dangers to democracies often lie in a failure to square up to the way events may shape in the future. The utterance of tough words in the present, has not in the past always been matched by tough deeds when the crisis arrives. All I can say in support of my intervention, whether my views are accepted or not, is that I am certain that every free man and woman in the world today has his or her eye on those in positions of responsibility in the Western Powers for two things—courage and leadership. I only hope that those in responsibility in the Western Powers will not fail them and will give those things to them, because I believe that their deeds in the past deserve them, and their hopes in the future demand them.

7.0 p.m.

Mr. John Hynd (Sheffield, Attercliffe)

I am sure that the speech to which we have just listened and other speeches dealing with the Berlin situation, have impressed the whole Committee, and will impress the country and other people beyond the frontiers of this country, with the gravity of the situation which has been created and the readiness of our people to face that situation. It is a tragic situation, but for some time past it has clearly and inevitably been one which would be reached at some stage and on some issue.

It is the end and the outcome of a long tale of costly patience exercised by the Foreign Secretary on behalf of this country, with, I would tell the hon. Member for West Fife (Mr. Gallacher), the sole purpose of achieving a united Allied policy which alone would enable us to survive the perils of the peace as they enabled us to survive the perils of the war. The policy followed by the Foreign Secretary has been extremely costly for this country. He has given us the figure of £200 million. It has also been extremely costly to the Germans. That story should be told clearly and precisely to Germany in particular, in order that the people of that country may appreciate what has been done to try to secure a common, single policy for the occupation of their country. I do not want to elaborate the facts, which have been explained by the Foreign Secretary and are already common knowledge, of the costly extent to which we have been prepared to go to reach a compromise with our Allies in this matter.

The utter failure, the deliberate refusal, of our Russian Allies to implement the common economic unity which was laid down as the basis of the Potsdam policy has been clear from the beginning, as the Foreign Secretary has said. The hon. Member for West Fife may mutter, but he cannot gainsay the evidence that has been produced. I will give him more evidence. From the beginning of the occupation, our country and our authority, regularly and religiously, in accordance with the Potsdam Agreement on economic unity, reported the amount of coal and steel produced in the British zone to the quadripartite authority in Germany. We religiously shared out the coal among the four Allies. Equally consistently we were flatly refused even information as to the amount of food in the Eastern zone, let alone any share of that food, which was so badly needed in the West. We shared the coal and we had no share of the food.

The result was extremely costly to this country and to America—but mostly to us—in trying to prevent Germany from falling into utter starvation. I am afraid that my hon. Friend the Member for Ipswich (Mr. Stokes), with most of whose remarks I wholeheartedly agree, was a little unjust about the food situation. I think he knows how tremendously difficult it was in those desperate and difficult days, when India, the Colonies and large parts of Europe were threatened with famine, for us to reach the 1,500 calories which we intended to provide for Germany and for which we made great sacrifices in those days. I hope that the Germans will come to understand some of the story, although I am sure they will never learn it fully.

For three years that has been going on. We have been religiously observing the terms of the Potsdam Agreement. The first reparations deliveries that were made, were made to Russia. In fact, they were the only reparations deliveries that were made at that time. I have mentioned coal. The only response that has been made to those efforts on our part has been recriminations and more recriminations. I could tell many tales to the hon. Member for West Fife and his friends. There was the story about organised German troops in the British zone complete with tanks, air squadrons and everything else. When that story was first published, we offered the Control Council the opportunity for an impartial, quadripartite investigation into all four zones. That offer was rejected by the Russians. They insisted upon quadripartite investigation into the British zone alone. For the sake of peace we accepted even that proposal. The report of that investigation—I do not think I am giving away any secret—was to the effect that there was no foundation for the story. That finding was rejected by the Russian representative on the Control Council who refused to accept the report. Yet for months afterwards we still heard repetitions of that story, from the hon. Member here and his friends.

The same is true about the story of Russian citizens being refused the right to return to their homes. That story was proved to be fantastic nonsense. Repatriation Commissions went into the matter and established that the people were Baltic citizens, never were Russians and had no desire to go to Russia. If they had wanted to go back to their Baltic countries, I am sure our authorities would have been only too glad to provide them with facilities for going home. We had no desire to be responsible for them.

All through these three years the situation in the Western zones, and particularly the British zone, has been sinking into deeper stagnation, despite tremendous efforts. Currency reform was already urgent in 1946. The measures to be taken were recognised, and we had almost reached agreement upon them in 1946. Yet agreement was not implemented until a few days ago. Why? Because we have been trying to achieve, above all things, a common policy with our Russian ally and because during all this time we have found it impossible to do so. Upon all that history, so far as the diplomatic situation is concerned, our Foreign Secretary is certainly beyond reproach in regard to his efforts to achieve accommodation with our Russian friends.

We had come to a situation where currency reform obviously could wait no longer. We could not possibly go on spending sums like £200 million subsidising a situation which could be avoided or at least mitigated by establishing a firm currency in Western Germany. The Foreign Secretary has explained how, because we could not get complete agreement, it became necessary to accept the situation and to apply currency reform over that area where agreement was possible. Now we have the quandary which is arising in Berlin. Sufficient has been said about that. There has been such unanimity in this Committee as to make it unnecessary for me to go into the various aspects of the Berlin situation.

I want to say a few words about the new situation that arises from it. Whatever may come out of the Berlin situation, one fact stands out fairly clear. It is that we have now reached the point where we have given up, for the moment at least, the possibility of reaching quadripartite agreement upon a policy for Germany. We have no longer a reason for not carrying out a unilateral policy in Western Germany. For three years we have been able to say, with reluctance, that things have not been done because we have not been able to reach agreement about them. We accepted the principle of Cabinet responsibility in that respect. We have not that excuse now. I hope that we shall be given a clear declaration of the new line of policy for the West.

I was particularly glad to hear the Foreign Secretary refer for the first time—I hope it is as significant as I think it was—in complimentary terms to the firm democratic attitude of large numbers of Germans in Berlin and elsewhere. I hope that is to be the new keynote of our approach to German policy. I hope that in place of the past groping futility of policy in Germany, for which I do not blame any single Power in the West, we shall now have a positive policy. We are still awaiting a declaration of it, and I hope we shall get it today. In spite of the fact that in a recent Debate in this House the Foreign Secretary rejected the old Morgenthau conception, which was the first approach to the policy for the control of Germany, the fact remains that that policy still overclouds our actions in Western Germany, as is only too clear from the remarkable speech of my hon. Friend the Member for Ipswich. Has that policy actually been abandoned or not? Are we now, in fact, ready to use every resource in Western Germany in manpower, material and equipment in order to begin that drive for Western rehabilitation which was again suggested in some of the remarks of the Foreign Secretary?

What is our attitude with regard to Article 115(f) of the American Foreign Assistance Act, which is not referred to in the White Paper issued yesterday. Article 115(f) makes this remarkable statement: The administrator will request the Secretary of State to obtain the agreement of those countries concerned that such capital equipment as is scheduled for removal as reparations from the three Western zones of Germany shall be retained in Germany if such retention will most effectively serve the purposes of the European Recovery Programme. Do we accept that principle or not? If we do not, it seems to make nonsense of the declarations made by the Foreign Secretary today in regard to giving Germany the tools and insisting that Germany should be able not only to feed herself but to make her contribution to Western European rehabilitation.

What are we doing at the present time in regard to the level of industry, to which reference was made by my hon. Friend the Member for Ipswich? Does that suggest that we are trying to give Germany the tools or does it suggest that we are trying to destroy the tools? The basis upon which the level of industry has been reached was explained by the hon. Member for Ipswich. He mentioned some of the industries which we are forbidding Germany to engage in. He mentioned some of the industries which we are deliberately restricting in Germany. There is, for instance, the prohibition of the production of such essentials for peace-time industry as roller bearings. Roller bearings are needed in Germany and the rest of Europe, and Germany can produce them in considerable quantities, and yet we are deliberately stopping that production and forcing her to import them. Germany has been told in so many words that she can import roller bearings, synthetic ammonia and other things because if she were to produce them they would become a war potential.

We are forcing Germany to import goods which she could produce in sufficient quantities for her own purposes and for export as well. While we are increasing her necessity for imports, we are the people who are subsidising the situation which we are thus creating. Similarly, there is a complete suppression of any mercantile activity in Germany. Germany has a seaboard and a great mercantile experience, and she has an economy which makes provision for it. We are forcing Germany to employ foreign ships to carry all her cargoes while the British taxpayer subsidies the German economy until Germany reaches a balance of payments which we are deliberately preventing her from reaching. The same thing applies to the restrictions on fishing vessels, and so on.

Have we said good-bye to that policy? Are we going on with the shadow of the Morgenthau policy, or are we altering the policy and getting on with something more constructive. A very fine article in "The Economist" the other day summed this up fairly well. It said that there was no half-way house between repression and co-operation and whichever policy we intended to follow, we must follow it without restriction, and we must make up our minds in which direction we are going. That is true. I hope that when the Minister of State replies to the Debate, he will not tell me and the Committee that we are not in fact restricting German production because we are allowing for 11,500,000 tons of steel and Germany is producing only about 5 million tons and that there is thus no real restriction on the level of industry; or that the restriction of the production of German cement, which is regarded as a war potential, is not likely to be restrictive because the Germans have not enough coal for it anyway.

If we are not restricting production, why bother at all about the level of industry, because the only effect it can have is to depress and discourage German production and the German psychology upon which we must depend if we are to get any co-operation at all? I suggest deliberately that the level of industry should be dropped altogether as far as the Western zones are concerned, and we should say to the new German authority, "You produce a level of industry plan which will utilise to the best advantage all the resources you have in coal, steel, factories, machinery and manpower, and we will look at it and see if you are going to build any battleships and pillboxes with the steel." The Germans have more desperate needs than the building of battleships or pillboxes at present, even if that were permissible. If we are now promoting the establishment of a Western German Government, there is no reason why we should not give them the substance of democracy as well as the shadow.

I do not want to be misunderstood in regard to security. I still cannot understand why so much emphasis is put upon the interpretation of security which means the complete disarmament of the country and the permanent control and supervision of production when on top of the Five-Power Treaty—which in itself would be enough to prevent German aggression for as long as we are likely to prevent it—we have the new Six-Power Agreement plus all the restrictions and the controls still provided. Why should it be necessary to prevent the production of heavy motor vehicles, which are so necessary to the German economy, or roller hearings?

It is true that France and other countries have a special angle on the security question, but I should like our French friends to consider seriously in which direction real security lies. Does it lie in the continued repression of Germany and the building up of such a legacy of hatred and bitterness that, at some stage or another, a revitalised Germany will become an unhealthy neighbour; or does it lie in the development of that spirit of mutual confidence and co-operation on which the whole conception of Western Union is based? If it lies in the second, let them drop the fears and get on with the policy of enabling Germany to improve her economy.

I want to say a few words in regard to the currency reform and the new Six-Power Agreement. In regard to currency reform, I want to ask one or two questions. How far has it got? How far do we propose it should go? I heard most of the speech of my hon. Friend the Member for East Coventry (Mr. Cross-man), and so far as I understand it, he is correct. This is not the currency reform which was originally planned. In fact, this is not a currency reform at all. It is a depreciation of the note issue, or very little more. It does not provide for any adjustment of the value of capital holdings. It does not provide for the adjustment of the taxation arrangements in Germany.

The Minister of State (Mr. McNeil)

Yes, it does.

Mr. Crossman

Yes, it relieves the capital of tax.

Mr. Hynd

I am giving my impressions. I am talking about deliberate and con- structive taxation. It does not provide for the protection of small incomes and people living on small savings. Is that intended, or not? So far as my information is concerned, it is not I understand that we have rejected it as something which the German political parties should fight out. We cannot do that now. There is not time. What will happen if this currency reform is an incomplete operation, is that the depreciation of the notes in itself will not substantially influence the production of the necessary consumer goods which must be the basis of any currency reform, and within a short time, there may be again such an unholy mess that we shall have to begin all over again. I hope we shall have some reassurance on that.

In regard to the Six-Power Agreement there are one or two short questions I would like to ask. In regard to the new Consultative Assembly that is being set up, why has it been impossible to agree that it should be a completely elected assembly? Can we imagine the peculiar situation, the acrimony and bitterness that will be created, if members should get up and say, "We are the elected representatives of the people and you on the other side are only nominated representatives"? I cannot see that discussions will be on a sound basis if that is to be the position, but more serious than that, can we expect that any future German government, popularly elected, will consider itself bound by a constitution framed by an assembly of this kind?

Surely, in such an important operation as the setting up of a German constitution, which we hope will become a permanent basis for German administration and external relationships, we must be certain that the foundations are secure and that there will be no excuse later on for any popularly-elected German government to be able to reject it by saying it was never established as a result of discussions between representatives of the people. I would also like to know what will be the position of any of the Länder in Germany which, after the constitution of Germany has been framed, decide that they will not adopt it. It is a point that puzzles me.

My second point is in regard to the Ruhr Control Authority. We are told that this provides for German participation but, as far as I can see, it is not German participation at all because we are told that the German representation will be nominated by the Commander-in-Chief or by the Allied Control Authority for the area, and that their votes will be exercised by the occupation authority for the area. That is not German representation, and if that is what we intend to do, why do we not call it by its correct name? Why do we seek to impose a fraud? It is not likely to be received with great enthusiasm in Germany, nor are the decisions of this authority likely to be accepted by any responsible group in Germany.

I suggest that these are important points because, as I said at the beginning, one of the factors upon which we must base all our hopes for success with Western Union and the rehabilitation of Western Europe is the whole-hearted co-operation of the German elements. At the moment we are not getting it. I hope it is not a question of turning round and saying that they started two wars, so why should we be so sentimental about it. That is not the issue, and I think the hon. Member for Ipswich made that clear. It is a question of whether we are going to get on with a constructive job, whether we are, in fact, going to give Germany the tools and, having done that, whether we are going to encourage their full co-operation in getting on with the job. They are not getting on with it at the moment. The political parties are suspicious, the political parties are hesitant, and we on these benches ought at least to understand the position.

At the end of the war we knew that whatever party got into power in this country would have a sticky time for a number of years. There was talk about a Coalition Government, and our party took up the attitude that if we were to accept responsibility for that situation, we must have power to deal with it. We would not accept a minority position in a Government where the other side would have the majority control, and where we would have an ineffectual voice. We said, "Give us the authority and we will get on with the job." We were given the authority. It is not surprising to me that the German political parties who are being asked to take responsibility for representation on the Ruhr Control Authority, where they are to be nominated by and their votes exercised by the occupying Powers—or, if they are asked to take part in a Western Germany where they have no real authority, where they are subject to the control of the occupying Powers, where they have to depend on the occupying troops to carry out decisions and so on—are at least reluctant to take part in this peculiar set-up.

Having said that, I hope nevertheless that the German political parties, despite all these disadvantages and the criticisms I have made and the questions I have asked, will realise that they, too, should be prepared to make allowances as well as other people; that if they are not getting a perfect deal, at least they are getting something, and that there is good will behind the offers we are making. I hope they will realise that the situation is too dramatic and too urgent at the present time to play politics, and that whatever their own feelings may be at the moment, whatever they think is faulty or imperfect about the arrangements, they will nevertheless come in and be as ready as, for instance, the French Government have been to accept things that they do not like in the interests of the unity of the Western democratic Powers. I believe that if they will do that, and if we respond by giving them encouragement, incentive and the tools to which the Foreign Secretary referred, we can still make a success of Western Germany and of Western Union, with Germany playing an important part. If we do not, the question which will be raised inevitably will be, who is to blame?

One thing is clear; since Potsdam, when the economic unity of Germany, central administration, and these other principles were laid down, the Foreign Ministers have not been able to agree on the implementation of these principles. They have failed completely, and the history of the conferences in Moscow, Paris, London and elsewhere has been a story of failure to agree. I do not blame anybody in particular at the moment, but it is a fact that they have failed to agree on the implementation and interpretation of the principles laid down by their Presidents and Prime Ministers at the Potsdam Conference. Is it not time that the Presidents and Prime Ministers who laid down these principles got together to see whether they can interpret them and whether they can make a basis of agreement upon which the Foreign Ministers can begin to operate a practical policy?

7.26 p.m.

Sir Ralph Glyn (Abingdon)

I want to remind the Committee, in support of what has already been said by many hon. Members, that as long ago as last September, currency proposals were being considered. It was clearly stated by Sir Brian Robertson that the position was so near agreement that only trivial points were outstanding. It seems to me that it is of great importance in this Debate, as the matter turns on currency reform, to remind the Committee of the seriousness of the position unless this monetary reform was carried out. It affected the wages of every single German workman, it prevented the taxpayers in this country being repaid because of the impossibility of exporting products, and it also made it, difficult for the schemes that have been considered in connection with the level of industry plan to be made really effective.

The Select Committee on Estimates visited Germany, and, if hon. Members are interested, the whole of the details, as stated by those responsible both for the level of industry and for currency reform, are all contained in the Eighth Report of the last Session. However, there is this new feature which has arisen now—which has perhaps not been emphasised very much in this Debate—the impact of the European Recovery Programme on the position, and the reason why the Berlin situation has become so acute.

I do not think that anybody in this country, the Dominions or anywhere else, will do anything but welcome the very firm statement made by the Foreign Secretary today. The speech of my hon. and gallant Friend the Member for Carshalton (Brigadier Head) was of very great importance and is one with which I entirely concur. But there may arise in Berlin a problem which will be difficult to meet, should the situation in the British, American and French sectors reach a state where it is very difficult to supply food and then the offer is made by the Soviet to supply food on certain conditions. It is much more likely that in the background of this plan is the idea that if the Germans want food, they can go into the Russian sector and get it. The question then would be how many of the Germans who had gone into the Russian sector would come back. We must be prepared for a new situation, which will be extremely difficult to meet should it occur. What is much more important, I am convinced that the consequences of withdrawal would be not only catastrophic, but would immediately create a similar situation in Vienna. If that situation arose it would be an impossible one to retrieve. What would be even more serious, it would inevitably delay any prospect of the European Recovery Programme getting under way as we expect and hope.

The level of industry plan has been criticised by the hon. Member for Ipswich (Mr. Stokes) and others. Those of us who on several occasions have been to Germany and have had the opportunity of seeing this process in action ought to feel that it should be stopped here and now. I am perfectly convinced that, if ever it was right, it is utterly wrong to pursue it at this time of European recovery. The hon. Member for Attercliffe (Mr. J. Hynd) quoted the White Paper and the powers given to the Administrator in helping Germany—Western Germany at any rate—to make a fair contribution towards European recovery. Some of the essentials, for instance, ball and roller bearings, have been ruled out by people who frankly do not know much about industrial recovery. It is ludicrous to tell an industrial country that it can have a recovery, but prevent it from making the essentials for that recovery.

Furthermore, it means they are using our money to buy those things, of which we ourselves are extremely short, either from this country or from elsewhere outside their own bounds. Not only are we destroying the hope of German industrial operatives to get back to work, but we are actually delaying the whole programme of European recovery.

Nothing would do more good than to make use of this very grave situation, to take the thing boldly by the throat and say, "Now, this is a new situation that has occurred. It has been put on us by your action, which we regret. We stand perfectly firm but will not now hesitate any longer in going right forward on the lines we believe to be necessary, not only for Germany, but for the recovery of Europe"—which means the prosperity of the world. Nothing will make me believe that the Russians are anxious to precipitate an immediate war. I believe that by their actions they are testing us and testing our courage. If we fail at this time, if we fail to give support to all the Germans who have stood by us, the results will be disastrous.

There is another matter which I ask the Minister of State to consider seriously. I hope that in making this proposal I will not be accused of swashbuckling or anything of that sort, but there is no getting away from the fact that Russian military strength at present is very great. We should not underrate the intelligence of the Russian General Staff. They are fully aware of the whole position. I believe it would be an enormous help in bringing back a better feeling, if we had a combined staff—and, indeed, a supreme commander, if necessary—for all the Allied forces in the various occupying armies in Germany on the model of S.H.A.E.F. Hon. Members may forget there are contingents from Norway, Belgium and other countries, besides the Americans, the French and ourselves. In a way they are all living off the German people. Something like 300,000 Germans are engaged in one form or another on work in connection with either the Services or C.C.G., or are engaged in pulling down the reparations factories. All those people are taken away from the German economy and are not able to make their contribution.

I beg the right hon. Gentleman to consider whether this is not the moment when, besides standing firm on the Berlin position, we should also go forward in what we know to be right and what, from our experience during three years of taking charge in Germany, we know the Germans want. We have trusted them up to a point: do let us trust them that little bit further; then let us withdraw at least 75 per cent. of the Control Commission and establish such a form of inspection that will make it quite impossible for the Germans to prepare for another war. If those things are done and we can convince the Russians—as we all wish to do—that our one object is to have Germany as one economic whole; that all our plans were laid with that idea, it is not too late now—if they realise we will not be bluffed out of the situation and are ready to welcome them into the joint partnership—to put forward the recovery in Germany at a time which is most opportune.

The Germans who are taking a leading part in the Länder Governments of the various zones have taken on an immense risk, as have their friends in Berlin. The Russians must realise that, whatever our faults may be, it will never be said, I hope, that we desert our friends or forget what they have done. The only way in which we can now show that is by a united front here—and not only here, for I was delighted to hear the Foreign Secretary say the Dominions had been closely consulted. It is of the utmost importance that all those who worked together to win the war should stand together now in one common policy to see that we do not lose all the fruits of war, which, in my belief, is a very great risk.

7.38 p.m.

Mr. Gallacher (Fife, West)

The Foreign Secretary and others who followed him—and one who preceded him—said that we have a right to be in Berlin. Never in all my life have I heard such a miserable, childish proposition on which to take the risk of sacrificing millions of lives and putting the finish to the history of this country. With all this talk of war, let there be no mistake that, if ever there were another world war, this country would never come out of it. We have seen what happened after the first world war and we are now experiencing the conditions existing after the second world war. We are told that we cannot stand on our own feet and that we need the dollar crutches to keep us up. We are told, "We have a right to be there," and, in order to provide a cover for this absurd proposition, we hear talk of Munich.

The other day at Luton the Leader of the Opposition spoke of Munich. That was utterly shameless of him. Neither he nor any other hon. Member who sat in this House at the time of Munich should dare to mention it. They had read before them from the then Prime Minister, a letter which had been sent to Hitler, and on the basis of which he was going to Munich, proposing a deliberate betrayal which was the grossest possible treachery towards a small nation. I happened to be the one voice that protested, supported by my hon. Friend the Member for Dumbarton Burghs (Mr. Kirkwood), the hon. Member for Stoke (Mr. Ellis Smith) the then hon. Member for Ince and the then hon. Member for Leigh.

Mr. Ellis Smith (Stoke)

And the hon. Member for Spennymoor (Mr. Murray).

Mr. Gallacher

The situation in Berlin has no relation whatever to that situation, that deliberate, calculated betrayal of a small nation. The hon. Member for Abingdon (Sir R. Glyn), who always speaks in a reasonable and balanced manner, said he did not believe that Russia wanted war. No, I am positive that the one thing Russia does not want is war, and she will make every sacrifice to avoid war. How can anyone talk about Russia wanting war with most of her country devastated, 10 million of her population slaughtered, and when it will be generations before she can recover from the last war?

Does America want war? I was in America two years ago and I found every important newspaper like "The Times," the "Daily Mail," "The Express" and the "Telegraph," every paper had on its front page "War, war, war, get at Russia now that we have the monopoly of the atom bomb." Statesmen were going to the Legionaires' gathering in California in 1946 and working up hysteria for war against Russia at that conference. Not only did we find that in the Press, but there was Bullet's book and Byrnes's book and other books proposing that America now that she had the monopoly of the atom bomb should make war on Russia, and that America should not wait until Russia got stronger. That had been worked up into an hysteria in America until one could hear nothing else. Has there been any newspaper, or statesman, or anyone in the Soviet Union who has suggested going to war? This drive has not only come over Berlin; it has been going on for nearly three years. It is a terrific campaign, and is still going on. Everyone knows that the Press of America was and is full of that sort of thing and that statesmen of America are continually talking of war. The Minister of State used to go round talking Socialism in Glasgow and on the Clydeside. If one asked him a few years ago what was the main cause of war, what would he have replied? Will he deny that he would have said that the main cause of war was the ruthless drive of capitalism for profits and for spheres of investment? Would he deny that?

Mr. McNeil

I never deny saying that that is one cause.

Mr. Gallacher

The main cause as he knows, and everyone knows, is that, and the great, problem before America—with a terrific industry which was not affected by the war, but was intact and built up to the highest point of efficiency during the war—is that America has accumulated investment capital greater than anything that existed in the world before. America must get markets for goods and spheres of investment for accumulated investment capital. For that purpose she must make a drive into Europe and break down any possibility of the working class of Europe advancing towards Socialism. If the countries of Western Europe and this country brought about Socialist economy, capitalist economy in America would be finished. Is there any question of that in the mind of any Socialist? Capitalist economy in America would be finished if this country and Western Europe went Socialist. So America must use all her power, military as well as political, in the drive to prevent the workers of Europe going Socialist.

Today the Foreign Secretary said that he tried to get economic unity and some other hon. Members who, presumably, are authorities on the question of Germany, are supporting him. Of course everything done by the Foreign Secretary, everything done by us, and by American capitalists, has all been good and highly desirable, and everything undesirable has been done by the working-class country, the Soviet Union. The capitalist country, America, has never done anything to which anyone could take exception. The Foreign Secretary and the Minister of State can talk quite roughly and resolutely about the Soviet Union, but in America did the right hon. Gentleman take any stand against the ruthless character of American capitalism? What a situation it is when so-called Socialists find a basis of unity with the most ruthless capitalists in the world.

When the Foreign Secretary stood at that Box and declared that he was going to nationalise the industries in the British zone, he made a declaration which prepared the way for economic unity with the Soviet Union but not for economic or political unity with American monopoly capitalism. But he did not carry out that pledge. He has a nice excuse now. The excuse is democracy. It is an amazing word, this democracy—[HON. MEMBERS: "Hear, hear."] Yes, it is an amazing word. Some hon. Members will recollect that when I drew attention to the fact that the Leader of the House refused to fight in the first world war when he was of military age, the Leader of the House got up and said, "Yes, I was bitterly opposed to the first world war." What was the first world war fought for, according to the Labour leaders in the Government, as well as the Tory and Liberal leaders? It was fought for freedom and democracy. Freedom and democracy; but what did the Leader of the House say? The Leader of the House said that freedom and democracy was a sham, a mask behind which was hidden the ugly face of Imperialism. Now we get the same talk about democracy. What happened in Philadelphia last week? Was that democracy?

Mr. Blackburn (Birmingham, King's Norton)

Or in Yugoslavia?

Mr. Gallacher

I would gladly make a digression and talk about that, but the Chairman would rule that out of Order. I consider that interjections of that kind represent the meanest and most cowardly type of interjection. [Laughter.] Yes, because the hon. Member making a speech is not allowed to reply to them. I do not mind interjections and I would not for a moment mind if it was in Order for me to reply.

Mr. Eden

Since we put down the Vote, I think it might help the hon. Member for West Fife (Mr. Gallacher) if I tell him that on the Foreign Office Vote, it is completely in Order.

Mr. Gallacher

It is Germany with which the Vote deals.

The Chairman

I am sorry but the right hon. Gentleman the Member for Warwick and Leamington (Mr. Eden) is not strictly correct. The Votes set down have to be connected with Germany.

Mr. Gallacher

Hon. Members know me long enough to know that I do not mind interjections.

Earl Winterton (Horsham)

On a point of Order. If the Debate is confined to the subject of Germany, what was the relevance of the remarks of the hon. Member for West Fife (Mr. Gallacher) on the American Constitution? Perhaps, Major Milner, you can answer that point of Order.

The Chairman

No relevance at all. The hon. Member was digressing and I had my eye on him. He probably appreciated that.

Mr. Gallacher

The point I was making at the time of the interruption was that there could have been unity in Germany if the Foreign Secretary had carried out his pledge, but he ran away from it. Now he talks about democracy. What is the actual situation? The Foreign Secretary said that the Russians wanted Four-Power administration and a central Government, which is true. Just the other day the "New York Herald-Tribune" made a similar statement—that the Russians were trying to bring back again Four-Power control and a central administration for Germany. The "Herald-Tribune" said that that condition would sooner or later make Germany a satellite of the Soviet Union. Here two things are admitted—one that the Soviet Union wants Four-Power control and a central Government in Germany; and, second, if there were Four-Power control and a central administration in Germany the unity of Germany would mean that American imperialistic schemes should never be carried through.

The Foreign Secretary said that we are not prepared to be part of a Four-Power grouping where one Power is dominant. I would be in accord with that in general, and I would be prepared to accept it from the Foreign Secretary, if it were not a fact that he belongs to a Three-Power grouping in which one party is completely dominant. No one is going to make me believe that of the three Powers, Britain, France and America, America is not the completely dominant one. Not one word of criticism or objection has ever been registered by the Foreign Secretary, the Minister of State or by our military commander in Berlin about anything that has been done by the Americans, either militarily or politically. The Americans are dominant so far as the Three-Power grouping is concerned.

In Berlin what is the situation? Berlin is part of the Soviet zone. All this talk about so much territory being given up over such a length of front is beside the point. I am sorry that the right hon. Gentleman the Leader of the Opposition is not here. Not so many months before the end of the War the right hon. Gentleman who shoved this handful of rubbish over to the Foreign Secretary, sent a telegram to Stalin begging him to launch an offensive under most terrible weather conditions.

The Chairman

That subject cannot come under the Estimate which we are now discussing. A good deal of past history has been mentioned which has nothing to do with the present Vote.

Mr. Gallacher

But excuse me, Major Milner. The right hon. Gentleman the Leader of the Opposition chipped in when the Foreign Secretary was speaking and drew his attention to the fact that the British and the Americans had retired 150 miles over a 400 mile front. I am only trying to show that they were able to retire for that depth because, at the request of the present Leader of the Opposition, the Soviet Military High Command decided to start an offensive under the most terrible weather conditions, and by that means relieved the British and American forces of the pressure which was directed against them. That is perfectly true and was followed by a telegram from the Leader of the Opposition giving expression to his most grateful thanks to Marshal Stalin and the Red Army for the great services rendered to the British and American forces at that particular time. If the history of the events of those days is studied, it will be seen that that actually happened, and it will be seen how they were in such an advanced position.

Berlin is part of the Soviet zone. The agreement was that the Four Powers should have their headquarters in Berlin and that it should be a Four-Power grouping to administer the whole of Germany. That was the sole reason for being in Berlin. It is not a question of rights. There is no other justification for being there. Now that the Four-Power control is ended, this talk about rights to be there has no relation at all to the matter. There is no reason for them being in Berlin.

Mr. McKinlay (Dunbartonshire)

Does the hon. Gentleman suggest that there is no reason for us being there in Berlin at all?

Mr. Gallacher

I agree in general with the suggestion of the hon. Gentleman.

Mr. McKinlay

In 1941 when the hon. Gentleman and others who think like him were chasing me thoughout Dumbartonshire, did he then think that anyone should be in Berlin? Was he not continually saying that it was a capitalist war.

Mr. Gallacher

Do not keep repeating that. It is pathetic that the hon. Member for Dumbartonshire (Mr. McKinlay) should keep repeating this. This is not the first time he has raised the point about being chased about Dumbartonshire. Who is going to chase the hon. Member anywhere? What can one do when one gets interruptions of that kind? The idea of me chasing the hon. Member through Dumbartonshire is just nonsense. The hon. Gentleman reminds me that someone published his photograph in an evening paper in Glasgow and said that he had the head of a philosopher but forgot to mention that there was nothing in it.

It has been decided to set up a government in the British, French and American zones which is under the control of the American monopoly capitalists. American monopoly capitalism is going to see that unity is not restored. They propose to set up a certain kind of government in Western Germany. I ask any hon. Member here to deny that, if the exigencies, which arose at the end of the war, decreed that the Four-Power control headquarters should be in the British or the American zones and a situation arose when those three Powers decided to set up a separate control, currency and Government, they would have allowed the Soviet Union to remain within their zone? Would there have been any question of the Soviet Union remaining there? No, certainly not.

The situation with Britain, America and France is that without any reason, but under the domination of America they insisted on remaining within the Soviet zone. That is a very undesirable situation, and one that the people of this country should never under any circumstances be asked to support. We are faced with a situation in which we are remaining in Berlin only because we wish to continue provocation. We can decide to remain there, or withdraw, or work for the real institution of Four-Power control and the central administration of Germany. Woe to the House of Commons and the people of this country if we continue at the heels of American monopoly capitalism, If, as a consequence of that, a new world war is launched on the people of Europe and the world, it will not only mean appalling slaughter and devastation, but the finish of this country.

I insist that what I said at Question Time is correct, that any talk of war on the part of the leaders of this country is talk of national suicide. I ask the Government and the Foreign Secretary to weigh well the serious situation they have got us into—[Laughter.]—yes—in their association with the monopoly capitalism of America. How can men on this side, who claimed at one time to be Socialists, who have expressed their belief in fighting capitalism, and who have declared that until we got rid of it there could be no proper freedom and hope for the workers, associate with the most ruthless and brutal capitalist country that the world has ever known? It seems that the Opposition are prepared to betray the country to maintain their own class, but that is no reason why Members on this side should do so. The working class and Members on this side of the House—

Mr. Blackburn

And Tito.

Mr. Gallacher

—must break our association with the monopoly capitalists of America and must carry through a policy of nationalisation, not only in this country but throughout the British zone of Germany. If that is done, a firm basis will be laid for unity between the working classes of the Soviet Union and this country, and a firm foundation laid for peace.

8.3 p.m.

Mr. Spearman (Scarborough and Whitby)

My enjoyment at the amusing speeches of the hon. Member for West Fife (Mr. Gallacher) is always a little spoiled for me by the apparent anxiety of his near neighbour, the right hon. Member for Dumbarton Burghs (Mr. Kirkwood), who tries so hard but so unsuccessfully to check him sometimes. If the hon. Member for West Fife really and truly thinks that America wants war, if his imagination is so fantastic that he believes that he has read such things in the American newspapers, I think that is perhaps an explanation for some of the wanderings of his mind.

Mr. Gallacher

Is it the case, or is it not, that a terrible war hysteria has been worked up in America?

Mr. Spearman

On the contrary, I would say that the tragedy of our time is that Russia still maintains the old-fashioned and restrictionist outlook that the economic claims of nations contain the seeds of conflict. Throughout this country and on the other side of the Atlantic I hope that wiser views are held, and that we realise that wealth is not something limited but that the more is made the more there is for everyone. I am firmly of the belief that if Russia was submerged, the economic interests of nations would be fundamentally in harmony.

It is interesting to note that those Members who appear sometimes to show that they are more concerned with the interests of Russia than with the interests of peace are, with certain exceptions, noticeably absent today. I believe that is a very significant indication of the very great measure of agreement among Members of the House on the subject of Russia, and I hope that that is widely realised in the cause of peace throughout the world. I must, of course, exclude the hon. Member for West Fife who, with a courage which I have never denied, will always get up and say his piece. It is perhaps true that his noisy and persistent bark is much worse than the bite which his good nature would permit and I think the result of it all is that he is a more likeable than important advocate of an altogether despicable policy.

Dr. Morgan (Rochdale)

Is that in Order?

Mr. Spearman

I was very interested in the admirable speech of the hon. Member for Attercliffe (Mr. J. Hynd), which gave me great satisfaction because it seemed to me to be largely what has been said on this side on so many occasions, notably by my hon. Friend the Member for Flint (Mr. Birch), during the years that the hon. Member was responsible for the policy of which he is now such an effective critic.

I would like to refer to the hon. Member—I always have great difficulty in not referring to him as "my hon. Friend"—for Ipswich (Mr. Stokes). He gave us, as always, a speech both vigorous and amusing, and I feel that the tragedy of events in Germany has afforded him an opportunity for speaking with more good sense than I invariably associate with what I hear from him. I would like to express my entire agreement with some of the things said by the hon. Member, in particular with three points. The first is his criticism of the federalisation of Germany. I believe that without a free economy that is an impracticable proposition. If, of course, we had an entirely free price mechanism, and no tariffs, no doubt the goods would move from one part to another but without that the federalisation of Germany will inevitably entail hoarding by the producers of particular States, to the detriment of the country as a whole.

Secondly, I would like to express my agreement with the hon. Member in his views about dismantling. It is almost criminal folly at this time of starvation in Germany and poverty everywhere in Western Europe that we should be destroying buildings which might well be wealth-producing. I sometimes wonder whether the machinery of Government moves so slowly that instructions on the subject of dismantling have not reached the proper sources and have not been carried out, and whether we are not suffering in Germany from actions which are contrary to the wishes of the Government. I also join with the hon. Member in paying a tribute to Lord Pakenham. I believe his achievement in changing the whole outlook of the unhappy German people is something quite remarkable, which does not seem to me to be an altogether good reason for translating him to another sphere.

I think impartial observers among all parties and in all countries realise the quite remarkable patience displayed by the Foreign Secretary. Three years ago, I think we all hoped that Russia would co-operate with us in making a great, prosperous and peaceful world. Two years ago many of us realised that that was not so, and that Russia did not want a prosperous and peaceful Europe. Therefore, many of us were dismayed at the policy of the Government who failed to reconstruct the economy of Germany and failed to take those measures of modernising taxation, reforming the currency, preventing dismantlement and modifying de-nazification which were vital if Germany was to have a decent economy. It may well be that the Foreign Secretary was right to go on with his course long after it was obvious that Russia did not want those things. It may have been right for him to go on aiming at a united Europe, though many of us thought it was better to have a divided than a ruined Europe. Whether that is so or not, everyone now knows that the Government have exercised the most extreme patience and have done everything conceivable—I think much more than they ought—in demonstrating patience with Russia. It is, therefore, very clear whose is the responsibility for the present situation.

At present we are more concerned with peace than with anything else. That, of course, does not belittle the gravity of the economic situation. I wonder whether we always remember quite how dependent this country is on Europe. Thirty-five per cent. of our exports before the war went to Europe. Europe was dependent on Germany. I do not believe that this country can be safe or prosperous with an impoverished Europe, and I know that Europe cannot be safe or prosperous with an impoverished Germany. For that reason I, like every other hon. Member, except perhaps the hon. Member for West Fife, was delighted with most of which the Foreign Secretary said today, because I think we know that if we left Berlin, the chances of retaining Western Germany would not be good. Without Western Germany, Europe would not recover, nor could we.

Of course, far more important even than that is the question of war, and I can think of no single step which would bring war nearer than to leave Berlin at this time. Therefore, I was more than delighted to hear the Foreign Secretary say in such absolutely clear and irrevocable terms that in no circumstances would we leave Berlin. I wish he could have seen his way to tell us more clearly how he intended to carry that out, but we must rely upon him to take every measure, knowing that he has made a statement on which he can never go back.

I would like to make a comment which, perhaps, is not quite irrelevant. A very serious strike has just been finished. I do not want to try to make bad blood by any reflections on what the strikers did. I would rather think that they deliberately chose to go back to work yesterday because they realised that they were endangering the peace.

The Temporary Chairman (Sir Basil Neven-Spence)

I am afraid the hon. Member is out of Order. This subject on which he is embarking has nothing to do with Germany.

Mr. Spearman

What I am trying to say is this. I can think of no way in which the peace of Europe would be more endangered than by strikes occurring at this time, and I want to appeal to hon. Members opposite—

The Temporary Chairman

This really has nothing to do with the subject of Germany.

Mr. Spearman

May I say this, then? If strikes took place at this juncture, it would be a most direct incitement to Russia.

The Temporary Chairman

I am warning the hon. Member for the third time, and I must ask him to keep off that topic. It is out of Order.

Viscount Hinchingbrooke (Dorset, Southern)

Is it not the case that one of the Votes down for discussion is Class VI, Vote 1, Board of Trade, and is it not quite relevant to mention a situation which might well result in a diminution of trading supplies in this country?

The Temporary Chairman

It would be in Order if it was connected with Germany.

Mr. Spearman

I was not casting any reflection upon anyone, but I was asking hon. Members to realise that nothing could make a greater contribution to war than a strike at this time. I will now leave the subject.

I conclude with a reference to the future. If this peril which we are now in is to be avoided—and I trust and hope it will be so—and if Russia—I will not say "climbs down," because that would look as if Russia were making concessions, but if Russia permits peace to be maintained, then I hope and trust that the Government will take a far more urgent line in reconstituting the economy of Germany than they have ever done before. I believe that that is absolutely vital, that the Germans should be given an opportunity of working their own way, preventing themselves from starving, and ceasing to be a hideous liability on this nation instead of the asset which they ought to be. These steps, which I think the Government have been so slow in carrying out in the past, are vitally necessary if we are not to have a repetition of the crisis which we are now enduring. It is, therefore, vitally necessary to set about, far more expeditiously than we have ever done before, the economic reform of Germany.

8.16 p.m.

Mr. Paget (Northampton)

I should like to apologise for having been absent from some of this Debate. I was called out to a very important meeting, but I do not think I have missed many speeches. I wish to emphasise that this Berlin crisis is part of something very much larger. It is part of the struggle for Germany, and that struggle is part of the struggle for the independence of Western Christian civilisation. One cannot concentrate upon one particular feature, because it will not be sufficient to win in Berlin if we do not achieve a superior alternative to Communism in the areas which we administer.

I wish to say something on currency reforms, as I had the opportunity of seeing that measure in operation in its initial stages. I think we all agree that it was a highly necessary measure, and indeed, we welcomed it tremendously as being the first and essential measure to deny the frustration and chaos which we have allowed Russia to create during the years since Potsdam. However, I would draw attention to some of the consequences. The reform itself is going extremely well. The way in which goods came into the shops was quite amazing. For the first time since 1943, the Germans found themselves with real money in their pockets. Bicycles with tyres were on sale in shops in Hamburg for as little as 120 marks. The money was well issued and there were any amount of goods. How that will continue to succeed depends upon the quantity of consumer goods which there will be to back that money.

My impression is that the supply under the German counter is very large indeed. For three years we have created the extraordinary situation in Germany in which the producers of consumer goods have had a loss precisely in proportion to the amount they produced. They had costs and prices imposed upon them which meant a loss on every article they produced. It is not very surprising in those circumstances that every device was adopted not to put goods on the market which could be sold only at a loss. The supplies are probably pretty considerable. Again, the Americans are bringing forward some consumer goods further to back that currency. I think there is quite a reasonable chance under the currency reforms that, provided the other things go well, money will retain its value. It certainly is inspiring great confidence at the moment.

There are, however, consequences which I do not feel have been fully anticipated. There is a certain amount of feeling in Germany that there could not be agreement as to the social and economic measures which should have accompanied the reform and, therefore, that they were simply shelved or pushed on to the Germans without the Germans really being given the powers to deal with them. The hon. Member for East Coventry (Mr. Crossman) dealt with the social implications, I think, very well. I entirely agree with what he said about that point.

I would like to say something of the economic consequences. In Germany we have an economy which has been built up upon an inflationary basis. That meant that it was estimated that something like half the German population were engaged on frivolous occupations, either producing things which were really valueless or engaged on the black market or on the various grey markets which grow up under an inflationary economy. Thus there was an unreal full employment. None the less, it was an employment which enabled people to get by and to go on living. Now, quite suddenly, we have all that swept away. We have a potential unemployment which I heard estimated at varying figures from 6,500,000 in the next two months down to an unemployment of about one million. But the pessimism of the prognostications which I received were much in measure with the opportunities for information of the persons who were giving them to me.

What has been done is to sweep away an existing inflationary economy and to trust that another economy will build up, by the play of the natural forces of economics; redeployment of labour and goods upon the basis of a sound currency. That is what Dr. Schacht did in 1923. It succeeded economically. It had certain very grave social consequences, leading to Fascism, but it succeeded economically. At that time labour was mobile. Today we have labour which is more immobile, probably, than any labour force ever has been in history. Lack of accommodation prevents anybody from moving at all, and it is not only in that sense that labour is immobile. Lack of clothing to a very large extent makes it impossible for people to change their jobs. People who have the sort of shoes and the sort of suits with which they can do a little dealing on the market have not the sort of clothes to enable them to go into building operations or the moving of rubble. We have that intense immobility of labour which is quite unlike the position in 1923.

Again, in 1923, loans were coming into Germany and goods were available. There was a supply of goods, which were more or less moving in a free market. That is not occurring today. Again, credit was controlled from the Reichbank through the Government by the people who were responsible for dealing with the problem. That is not occurring today. In addition, there was international trade. It seems to me that in the existing situation we are relying on the natural economic forces to build an economy while we have hamstrung those forces. The forces upon which we are relying do not, and cannot, operate, and it seems to me that the actions which should have been taken when the currency was reformed will have to be taken later on and will be taken in circumstances of great distress and when a tremendous lot of political harm has already been done.

The credit position at the moment is that the creation of credit, which must be necessary to re-employ all those people, is wholly out of the control both of the Länder Governments and the German Economic Council at Frankfort, so that the people who are responsible for coping with the unemployment are denied the credit weapon which alone could be used in dealing with the problem. Again, and this is causing great anxiety amongst the people who are responsible for heavy industries, the credit, such as exists, is by the issue on orthodox banking lines. There is great anxiety in case this credit will go to the people who have the goods which they could put in as security against the credits for which they were asking, thus operating against the currency reform, which is designed to force those goods on to the market, and against the heavy industries, which it is essential to build up but which would not be able to get the necessary credits because their securities would not be so good as they would require them over longer periods.

I would suggest that, if this policy is to succeed, it is quite essential that some credit-creating central body should be formed for the purpose of directing credits in the direction where they are needed to rebuild the economy. That body is lacking today, and I would suggest that it is essential and is something which His Majesty's Government must consider. Further, I think it is absolutely necessary, if we are to face the situation, that there should be a public works programme and that the Germans in the Länder—and anybody who has been to Germany must have seen the immense amount of work to be done; the rubble has not been moved yet—should provide work, which must be work which is close to the people. Moreover the clothing must be made available for the people to enable them to do the work. The necessary credits must be made available in order that the people can be moved into employment in these necessary directions.

Finally, I would say there must be some opening of the frontiers for German trade. The Germans must be allowed to charge world prices for their goods instead of being forced to sell them at vastly below world prices. We cannot get this economy built up again on a sound basis if we force the people to export at uneconomic prices, either in German terms or in world terms. This seems to me to be an essential thing which must be introduced in this reform. Figures seem to indicate that the German economy is really working only at about 40 per cent. of its potential at the moment. That would indicate that there is great scope for re-employment within the productive industries, but we shall not cope with the problem unless we can direct the credit in the right way and unless we give to the people who have to cope with this problem the power to cope with it—that is, the Germans themselves.

We must regard all this as part of our policy to create a better system than that of the Communism across the border, but there is one other factor which I think is of the greatest importance and that is the question of the nationalisation of heavy industry in Germany. On purely economic lines, I have on previous occasions been very critical indeed of it. I have looked with the gravest suspicion on nationalisation proposals which vested the ownership of industry in public bodies that did not appear to have the financial strength to provide the working capital necessary to keep those industries going.

On those sorts of grounds I have on previous occasions been extremely critical of nationalisation proposals for German heavy industry. I am entirely convinced now on political grounds that nationalisation is absolutely necessary today. I talked in Germany to a large number of British officials, from all parties, many of whom were opposed to nationalisation in England. I did not hear a single one who did not say it was absolutely necessary in the circumstances of Germany. In the present position the Military Government have taken industry over, but when the Ministry Government release it, it goes back to the old owners. Military Government have created German bodies under their supervision to carry on these industries on their behalf. Those German bodies do not know to whom eventually they will have to account, and, therefore, they are far less anxious to push up production than to maintain assets. That is a thoroughly unhealthy situation. We cannot get real co-operation from German managers until they know to whom they will have to answer.

Equally, on the question of the political situation there, we shall not be able to hold the Ruhr against Communism unless the workers are completely assured that they will not go back to their former employers. That is the situation there. I think very few people have been better friends to our system than has Buerckler, the leader of the Ruhr trade unionists. He has, all our people over there agree, done a very remarkable job. He certainly assured me that he simply could not hold the situation unless the workers did receive that assurance and receive it quickly. What they want is the creation of trustees—until we have a central German Government—in whom the industries will be vested. There, trustees acting on behalf of Military Government, will hold ownership until there be a Central German Government to vest it in. It will not make any practical difference from the economic point of view, but it will make an enormous political difference in that area. We must see that we are in this fight to win against Communism, and we must not put the people working with us, such as the German trade unionists, in an impossible situation.

One other thing. I would urge the Government to stop this policy of demolitions. Surely to goodness that has gone far enough now. I do not say that there is not in some directions plant surplus to German requirements. If there is, let that plant go abroad by all means; but let it go at world prices; let the money come in to help in the rebuilding of the German economy. Let us get over to the Germans the idea that this repression is finished, that we have brought them in on our side, that we are working together. We can never persuade the Germans of that while we are blowing up their factories. One does not believe a man is one's partner if he spends his time blowing up one's assets. This has got to stop now. If it means finding some money to compensate some of the Dutch or Belgian recipients, it is overwhelmingly better for us to find that money than to continue this policy of demolition; we shall be repaid in terms of the co-operation and goodwill of the Germans. I beg the Government to reconsider this matter.

I want to say something in regard to Berlin. Let us be quite clear about this. If we do not hold Berlin, it does not matter in the least what we do in Germany, and it does not matter what we do in Europe: we can clear right out, because nobody east of the Pyrenees will dare to be our friend. If we wanted the Germans to work with us, it was very indiscreet to shoot Laval. They are in peril on the one side from their own nationalists, and from the other side from the policy of the Communist totalitarians. The Germans who have come forward to work for our western way of living are pretty brave men. He is a pretty brave man who is a Social Democrat in Germany, within an hour or two by tank of the Russians. A good many of those fellows have had 12 years in concentration camps, and they are pretty brave men to risk it again. The ones in Berlin are really being heroic. They have stood by us, and stood by us amazingly well. I believe they do deserve a tribute from this House for their courage in their situation. We cannot let them down. If we are not to assume the shame of a Chamberlain Government—and worse—we cannot let those people in Berlin down No settlement of the Berlin problem is a real settlement unless it assures our capacity to supply the wants of those people. An air lift may be able to do a great deal, but to coal a city, an industrial city of 2,000,000 inhabitants, by air is a really fantastic proposition. Nor shall I be in the least satisfied if the Russians tell us the technical hitch on the railway is over, and we can pass through a few trains, just to enable us to get enough supplies in to postpone the evil day, and to keep the people in Berlin in circumstances of distress. That is only postponing the evil day. No solution of this problem can be a solution unless it gives us control of the means of supplying Berlin. I believe no other solution should be acceptable to us.

It would be fatal if my right hon. Friend's patience were mistaken for an inclination, when he comes up against an issue, to postpone the evil day. He has a certain facility for resolving the perplexities of his audience while leaving their problems unsolved. One hopes he does not apply that process to himself. He is a great and powerful force. It would be terribly dangerous if he were a force for indecision in this matter. There is no case for postponing a decision, and a decision over Berlin is no decision if it merely enables the Russians to put the squeeze on again when it becomes more convenient to them, and to vary the squeeze to the extent of creating as much distress and discontent in Berlin as they dare at any given phase. I would say we must not only get our supplies in, but that our agreement must include control of at least one of the means of getting them there, whether by water, rail, or road.

I can see no cause for postponing the show-down. At the present moment we have the French with us, and we have the Americans with us. The Russians, for their part, are having certain internal difficulties on their front. What prospect is there that postponement will put us in a stronger position? There is every case it seems to me, for having the show down now and getting a settlement which will be a permanent settlement. We should put privately to the Russians, so that we do not involve their prestige, the necessity for an agreement. We must make it clear that the agreement must put in our power and control the means of supplying Berlin, and we must make quite clear to the Russians what is the alternative to agreement and that the alternative to agreement shall be in our time now and not in their time later on. If at some time the choice has to be made—and it is a choice which must be made by the Russians—whether it shall be peace or war, they are far more likely to choose peace now than on a later and more unfavourable occasion. We must bring this matter to the point where we can get a real decision, because now and not later is the most favourable time for us to do it.

8.41 p.m.

Major Legge-Bourke (Isle of Ely)

I am glad that the hon. and learned Member for Northampton (Mr. Paget) finished in the military vein because I propose to deal mainly with that aspect in my speech. It is a pity he missed the speech of the hon. Member for Ipswich (Mr. Stokes) on the subject of the demolition of perfectly usable buildings, because I think that he would have found that he was in great agreement with the hon. Member, and that would have strengthened his case. I think that both hon. Members have been most convincing in this Debate on that particular situation. So far as currency is concerned, I have no expert knowledge whatever of Germany, and I do not propose to talk on that aspect, but I would like to make this one criticism of all those hon. Members who have dealt mainly with the economic aspect of Germany. I do not believe that we can expect the economy of Germany to recover with the situation in Germany and in Europe as it is, unless we have assured something else first.

The restoration of the economy of Germany means the restoration of the prosperity of Germany. That is what we are aiming at. We cannot hope to get that prosperity unless we have established peace, and we cannot establish peace until we have established justice. It seems to me that this Berlin matter has brought this to a head. I would say here and now that the closing remarks of the Foreign Secretary's speech today were a great relief to me. I believe that he has cleared the air and made it quite clear where this country stands. I believe that must have a stabilising effect, but there is one aspect of it which is important. The hon. and learned Member for Northampton touched upon it. We shall make a very great mistake if we issue anything in the nature of a challenge and if we are not able to implement that challenge. In fact, we shall make just as big a mistake as was made between the two wars by pledging ourselves to do something which we were not fully able to carry out. There is the classic example of Poland.

On this matter of Berlin, I believe that the situation there has reached the pitch visualised in the excellent speech made by the hon. and gallant Member for Carshalton (Brigadier Head), with which I am in entire agreement. If it ever should reach that pitch, then I would say to the right hon. Gentleman who is to reply to the Debate and to the whole of His Majesty's Government, that, if they agree with what my hon. and gallant Friend said, it is incumbent upon them to make certain by the time they have to issue any challenge, if they do have to issue it, that they are ready to implement that challenge, because if they are not, their bluff will be called, and if they are found wanting, it will be disastrous for the future of this country and indeed for world peace.

I have only one criticism to make of the Foreign Secretary's speech today. I believe that when he said that he was prepared to wait any length of time for peace he may give a false impression. I think that we all admire, even if we have criticised him from time to time, the patience which he has exercised over the German problem. I am sure that peace does not come merely by waiting for it. I do not believe that peace is a natural state of man. I believe that man has to fight for peace and win his peace by honest hard work as he wins his wars. I think that there is a very great danger in what the Foreign Secretary has said in letting the world suppose that while he has a plan to deal with the present situation in Berlin, he has no plan beyond that.

I believe that it is imperative and of the utmost urgency that His Majesty's Government should not merely work out a plan to deal with the present Berlin crisis, but also work out what they are going to do after that. The right hon. Member for Warwick and Leamington (Mr. Eden) said that he did not expect His Majesty's Government to produce their plan in this Debate. I do not think that anyone expects them to do that, but I think that we expect something more than merely dealing with the Berlin crisis. We expect His Majesty's Government, in conjunction with other Western Powers, to do everything in their power to regain their initiative in the whole of the German problem, because ever since the end of the war, the German problem has been a battle for initiative. There is no question, in my opinion, where that initiative lies at the moment. I do not believe that by merely stating that we are going to stay in Berlin we shall regain that initiative.

We have to go further than that. We have to try to produce some proposals which will overcome the circumstances which have led to the present situation. I think that one of the obvious things which has to be solved somehow concerns the strip of Germany which lies between our zone and our sector in Berlin. We have somehow to find some way of overcoming that. The hon. and gallant Member for Carshalton has suggested one way. I am inclined to think that that may be the only way. There are other alternatives, and I should have thought that after the indictment which the Foreign Secretary made today of the Russian failure to honour the Potsdam Agreement and Four-Power Agreement, there was a strong case for us to give a date by which the Russians now should honour their obligation under those treaties and agreements.

At the same time, we should tell them definitely—perhaps secretly, as has been suggested, in order not to make it too difficult for them—what we shall do if they do not implement the policy laid down as their obligation under the Potsdam and the Four-Power Agreements. The time has now come when we must go a little bit further than merely saying we are going to stay put. We must try to regain the initiative, for, as long as we have no initiative in this matter, we shall not instil confidence in Western Germany, which at the present moment depends very largely on how able we are to match the Russian strength.

Now, when I refer to the Russian strength I mean military strength. I shall not ask the Minister of State what our military strength is today in Western Germany. If it is what I think it is, the less said about it the better. I ask him to remember that if the situation deteriorates and we expect to be able to issue any form of challenge to regain the initiative, if we expect to restore confidence in Western Germany it is essential that we and our Western Allies should make certain that whatever we say we are able to implement militarily. I do not say that we will have to use the military in order to implement our policy. I, personally, believe that the one hope of preserving peace is for us to be in a position militarily to implement what we say we will do. That probably is the only way in which we shall avoid having an open clash.

I do not believe the present situation to be at all satisfactory, to put it mildly. Our American Allies, in particular, and we ourselves must get down to this business at once, and work out our military strength, what we could implement at the moment, and what we can do in the time we have available, to put ourselves in a better position to regain the initiative.

This is a very grave Debate—probably the gravest Debate we have had in this Parliament. I have hesitated to speak on Germany, because I do not know it well; but in this matter I am inclined to think that we should perhaps look to our constituents rather than to anybody else, because I believe that our constituents are watching this Debate with some interest. We should remember that it is not merely the troops in Germany at the moment, or the Allied Control Commission, but every man, woman and child—and particularly the women and children—who will be affected by what we decide in the next few weeks. I hope that His Majesty's Government, although obviously not able to reply tonight to the points I have raised, will bear in mind what I have said, and believe me when I say I am convinced of this above all other things in this regard, that the greatest crime we could now commit would be to say we will do something which we are not able to implement. We dare not now risk having our bluff called.

8.57 p.m.

Mr. Harold Macmillan (Bromley)

For a variety of reasons, partly Parliamentary and partly personal, this Debate on Germany has been delayed until rather later in the Session than had been anticipated. When the Opposition asked for a Supply Day for that purpose, we did not, of course, anticipate that the situation in Berlin, although already ominous, would have blown up into this first-class crisis. We should, therefore, normally have asked the Committee to join with us in one of those periodic examinations of the British administration in Germany, which it is both the right and the duty of the Committee to have.

I would remind the Committee that it is nearly a year since the last Debate—I think it was in August, 1947—on the general British administration in Germany. A very large number of important issues were then raised, not only by the Opposition but by hon. Members in all parts of the House, and we were then demanding an immediate policy to deal with some of the outstanding problems, both economic and political. Although, as the Foreign Secretary explained to us in the first part of his speech today, some steps—and very important steps—in the six-Power Agreement, currency reform, and in many other directions—have been taken to deal with some of the points that have been raised continually in Debates during these three years. Yet there are many questions on which my hon. Friends and I would certainly have asked for explanations, and raised criticisms.

For instance, there is the whole question of the alleviation to certain classes of the full effects of the currency reform, to which reference was made by the hon. Member for East Coventry (Mr. Crossman). There is the whole question as to how far a federal Germany can be made effective. In my view, it can only be made effective if it is combined with a free economy. There is the whole question of the responsibility for day-to-day affairs. I should like to join in a well deserved tribute to the work done by Lord Pakenham during his tenure of office. I cannot, of course, say anything of the work he did here in England, but I do know that its effect on the morale and hopes of the German people has been a very valuable one, and for that we are grateful.

Then, we would perhaps have raised the whole question of the tightening up or the scaling down of the officials of the Control Commission—that slimming process for which we have often asked, and which is really necessary if they are to be suited to their new functions of advisers and not of administrators. Then we might have raised the question of de-nazifica- tion and the continuing trials, and how these were being operated now that they are handed over to the local German government themselves. There are many questions on the subject of land reform which my hon. Friends would have liked to raise, and the effect of the break-up of economic farming units on agricultural production—a very wide and important question.

Then there is the question of dismantling factories, to which reference has ben made by hon. Members on both sides of the Committee; and, still more important, as to how far, if at all, reparations are still being sent from the Western zone into Russia. This, after the figures given by the Foreign Secretary in his speech, today, would seem to be an almost fantastic operation if it is still continuing. We would have raised the very serious problem of Western Germany becoming what might be called a dollar country, the effect not only upon the claims of British creditors in respect of past transactions, which must not be neglected, but also the effect upon the flow of trade between Germany and Great Britain and the trade relations which can be built up in the future. That opens up a very important economic problem.

All these and other questions would have been raised normally, and in some detail, particularly by many of my hon. Friends who have given great personal study and attention to these problems. Nor do we abandon our right, since we cannot abandon our duty, to raise them on an appropriate occasion; but it seems to us that today, in the circumstances in which we now are, one question, and one question only, fills the minds of all of us inside and outside this Committee, and at this great crisis we on this side are anxious that one simple and single message should go from the House of Commons today to our comrades in Berlin, to our own people, to our Allies, to Germany and to Russia, and that this should be the message: the inflexible determination of the British people not to yield to blackmail. Hence the character of this Debate. That has been the broad question to which hon. Members have given a very large measure of attention.

I was particularly comforted by some robust contributions from the Benches opposite. The hon. and learned Member for Northampton (Mr. Paget) put it very admirably, but I was not quite so happy about some of the others. The hon. Member for East Coventry touched rather dangerous ground. I took down his words. He said that the campaign for Germany as a whole was what mattered, and it would not be decided by the issue of the dramatic battle of Berlin. I am not so sure that he is not inadvertently saying precisely the opposite of the truth, because I believe that unless we win this battle in Berlin, all the rest goes.

Mr. Crossman

I also said that Berlin mattered, because if we came out of Berlin it would have disastrous repercussions in Western Germany. If the right hon. Gentleman reads HANSARD tomorrow, he will see that I said that.

Mr. Macmillan

I hope I am not misrepresenting the hon. Member.

Mr. Crossman

The right hon. Gentleman is.

Mr. Macmillan

I was just a little unhappy about that phrase. It is quite true that he went on to say that we ought to stay in Berlin. I am very anxious that a unanimous view of this subject shall go out from this Committee. If he says that I misunderstood his remarks, I will most readily withdraw. In the rest of his speech he dealt with other matters. He devoted a very small part of it to the Berlin issue. He spoke mainly of currency control, and I was glad to see his newly-found interest and care for the middle classes. It is quite true that currency control hits the middle classes, but the inflation which precedes it is the thing that ruins the middle classes. I suppose that when the hon. Gentleman is above the Gangway he has great care for the middle classes, but when he is below the Gangway he wants to liquidate them.

The hon. Member for Bedford (Mr. Skeffington-Lodge) was the only other hon. Member who spoke in that strain, except the hon. Member for West Fife (Mr. Gallacher), who made the contribution we expected, although I think he fell into some danger in his speech because it left him open to a charge of Trotskyism, deviation and inordinate ambition, and at one moment I thought even of grandee-ism. The hon. Member for Bedford, again unintentionally I am sure, seemed a little lukewarm. He said that he approached this problem between our- selves and Russia and between Communist Russia and Western Europe with a balanced mind. If I might adapt a very old phrase, he balanced so long upon the curtain that he allowed the iron to enter into his soul. I was not very sure what was his wish as to what we should do in this particular crisis.

But in the main the dominant theme, the note which has gone out from this Debate is that we must be firm. Those who did not share that view, with few exceptions, have not spoken or have absented themselves. We are grateful, for I am sure that that is the note which ought to go forth from this Committee today. The Foreign Secretary, in one of the most powerful speeches which he has ever made in this Committee, spoke for all of us. He spoke not as a party leader but as British Foreign Secretary to the British people and to the world. In the account which he gave us he certainly revealed much of what we had surmised and also some things we did not know. If his account of the long series of prevarications and evasions, which have been committed by the Government of Soviet Russia since 1945, could be widely read and studied, as it ought to be in every part of the world, every fair-minded man or woman must admit that the patience of the Foreign Secretary and of his colleagues has indeed been remarkable.

Never was there a more devastating exposure of bad faith. During and at the end of the recent war we were ready to hold out to our Russian comrades, a most friendly welcome. It was a universal feeling and far beyond party. We felt that perhaps some new world or some new relationship would begin, and we were ready to play our part in it. If confidence is to be maintained it must be repaid. It cannot live if it is fed on nothing but bad faith in return. The story which the right hon. Gentleman revealed today was one which shocked us and made us feel that the criticism was not that he had been too impatient, but that he had held on for too long.

The right hon. Gentleman gave us in a single phrase, in words which I took down and venture to repeat, what seemed the most essential point of his message. It was this: A grave situation may arise, if so we must ask the House to face it; none of us can accept surrender. Sir, none of us will—for what would be the effect of a surrender now? What would be the consequences, either of a total evacuation of Berlin or of the acceptance of a compromise formula which would render our occupation ineffective? First, what would be the effect upon the Germans? In Berlin itself there would be panic and despair, as two million people would be handed over to Communist rule, that is, to oppression and tyranny. The 20,000 or more leading citizens who have lately co-operated with the Western Powers and have courageously stood up against Communist pressure would be abandoned, perhaps to the torturer or to the executioner. It must be recognised, as has been stressed by many hon. Members in all parts of the House, that there has grown up in Berlin a policy not always associated wth the German character, of resistance to oppression and a sense of civic duty. If we are to abandon them now, to be duly liquidated, it would be a stain upon the honour of the Western Allies from which they could never recover.

Outside Berlin in the Western zone, in Bizonia, there would be a total loss of confidence among the German population. There would be immediate repercussions in that zone and they might take the form of passive or active resistance. All the administrative reforms, political and economic, on which the Western Allies are now embarked would be prejudiced and probably ruined. We have had in our many Debates over these three years differences of view as to the value and the nature of some of these plans. We have had from different parts of the House criticisms of the slowness with which they have been developed; but we have all, in every part of the House, been pressing, broadly speaking, for progressive, imaginative policies by which the German people could be restored to a higher level of economic and political existence and brought into the family of civilised Western people.

To abandon Berlin—that is out of the question. To abandon it now would be to abandon all Germany, for it would produce a sense of despair and disillusion among the whole German people in this critical period in their history, and from that despair they might see the only means of escape and the only method of restoring their position by throwing themselves, in spite of everything, into the arms of Communism. A year ago in the Debate on Germany I used a phrase which I venture to repeat: If some would assess the dangers of a militant Communism, as the greater, and others would put the dangers of a revived militant Nazism as the greater, I think all must agree that the greatest danger of all would be an aggressive combination of the two."—[OFFICIAL REPORT, 4th August, 1947; Vol. 441, c. 1004.] A retreat now, or even a diplomatic defeat, on this Berlin issue might well precipitate so terrible a result. Whatever may be said as to how the Western Allies have got into this position, whatever may be the criticism as to how far they ought to have foreseen it and how far they ought to have taken more adequate provision to deal with it, whatever may have been the apprehensions—I think, perhaps the legitimate apprehensions—of our French Allies, one thing is clear—now that we are in this business, we have got to see it through.

I have spoken of the effect on the Germans, but what would be the consequences of retreat now upon Western Europe? Tragic indeed, and an almost fatal setback to the whole movement for the unity of Europe. The supporters of Western unity would be shaken, the waverers would be alarmed and the opponents would be encouraged. As my right hon. Friend said, Scandinavian countries just on the brink of decision would become more and more hesitant. Attentism would become the policy of every doubting Government. In France and Italy, of course, the Communist Parties would gain dangerously and even fatally. The Greek rebels would take heart. In some countries, wholly now or even partially engulfed, those elements of resistance which still remain and upon which we still place our hopes, would lose all hope. In Poland, Hungary, and Yugoslavia—in these countries Communist control would be still more consolidated. What about Austria? The loss of our position, or even the weakening of our position in Berlin, would make our position in Vienna almost untenable. Look further afield—in Asia, India and Malaya. The propaganda of Communism would grow with increased strength until it became perhaps too formidable to overcome. Finally, in the economic sphere in Europe itself—since we all agree that the economic revival of Germany is an essential part of the economic revival of Europe, why then, we ourselves would be equally injured by such a blow.

Therefore, the only course open to us—the only course open in safety and wisdom—is the course dictated by honour, and if it has obvious dangers, I think it also has the advantage of being the only prudent course. The Western Allies cannot enforce their will in this matter unless they are prepared to accept the risks of war. In my view, we cannot even with an air lift alone, even an air lift developed to the highest extent, keep the people of Berlin warmed and employed as well as fed by importing coal and raw materials as well as the necessities of life. We shall, therefore, have to insist upon the right of access which the Foreign Secretary proved beyond doubt was inherent in the Potsdam Agreement—a right of access by road, by canal and by rail.

Fortunately the Russians have left open, as has been pointed out, some lines of retreat without loss of face. All sorts of things might happen—technical improvements might suddenly lighten the present dark transport situation, railways thought to be unusable might suddenly be found to be really in quite good order, and bridges believed dangerous might, after all, be found able to carry their load. Nevertheless, I think it is obvious that we must take the risk that our access will be opposed, and opposed by more than argument or procrastination. Therefore it may be that the test of wills—the will of the Western Allies and the Russian will—must be made, and we must face, if we are frank with ourselves—for it is a serious and solemn moment in this Committee—the risk of war.

However, I must say for my part, and I think that of my hon. and right hon. Friends, that grave as that risk is, the alternative policy—to shrink from the issue—involves not merely the risk, but almost the certainty of war. All history and, above all, recent history teaches us this: to yield to aggression may give a breathing space, a year or two, but it is the fatal step that leads sooner or later, and generally sooner, to war. For aggression, like appetite, grows with its exercise, and there finally comes a point where resistance becomes inevitable.

Even to speak of war is so terrible a thing that one shrinks from the words. For a third war, with all the horrors of modern, scientific progress—I believe the word is—might well prove the war to end war, in the sense that it would be the war to end human life. Nevertheless, we do not solve a problem or avoid a danger by merely withholding our eyes from it. We must face this issue. Peace is elusive. It is not to be secured by wishful thinking or by much protesting; it is not to be won by itself, for it is a by-product of freedom and truth and justice. And in the policy which His Majesty's Ministers are pursuing on this question of Berlin, I wish to say, at the end of this Debate, that they have the full support of the Conservative Party. So long as they are true to it, that support will be genuine and will be loyal. We do not, of course, relinquish our right and duty to criticise from day to day and time to time the administration of Germany. We shall continue to criticise it, I hope constructively, on appropriate occasions, but we prefer that the note of today's Debate, so far as we have been able to guide it, shall be that our party is united in support of the Government, and that the voice that shall go out from the House of Commons today shall be a voice of national union and national concentration.

Mr. Gallacher

Count me out of that.

Mr. Macmillan

The hon. Member for West Fife is the exception; I hope and pray he may be the only one. This is perhaps a turning point in history, one of those great moments when, for good or ill, a decisive resolution must be taken and pursued. At such a moment, although there is much that divides us from right hon. and hon. Gentlemen on the other side of the Committee, there is much that unites us as fellow citizens and fellow subjects, and our message to them and to Ministers is: Be strong and of good courage.

9.20 p.m.

The Minister of State (Mr. McNeil)

I should like at the very outset to associate my right hon. Friend and myself with the deserved and pleasing things said about my right hon. and noble Friend the Minister of Civil Aviation for the part he played in relation to the problem we have been discussing. As the right hon. Gentleman the Member for Bromley (Mr. H. Macmillan) has said, it has been a notable Debate. Whatever criticisms there have been have, with one exception, been in a minor key. Hon. and right hon. Gentlemen have displayed great restraint and spoken with great soberness but, on the central theme of the Debate, have spoken with enormous unanimity of voice.

The Debate, I think, fell roughly into three parts. There was the minority represented alone by the hon. Gentleman the Member for West Fife (Mr. Gallacher), who is against our policy not only in Berlin, but in Western Germany. Secondly, there were those hon. Members who, while approving the conclusions which have emerged from what has now been called the London Conference and our intentions relating to it, are none the less critical in varying degrees of our treatment of the peoples in the Western zones, politically and economically. Finally, from all parts of the House, there were hon. Gentlemen who from restraint did not make criticisms but raised queries and offered remarks on the situation in Berlin and its eventual settlement.

Before passing to the substance of the Debate perhaps I may be permitted to say a word to the hon. Member for West Fife. I had great difficulty in following his argument. As far as I could follow it, apparently we have no rights in Berlin. He said that clearly enough, but he did not stop to deal with the evidence of my right hon. Friend. It seems that we have no rights and that we have one obligation—to conform to Soviet wishes in this place at all times and in every respect [HON. MEMBERS: No."] I do not find that dogma any more attractive because apparently, from the most shabby and braggart communique from the Com-inform, Yugoslavia has been put into the same category, in this respect as the United Kingdom.

Mr. Gallacher

Will the right hon. Gentleman excuse me for a moment? Regarding the question of rights in Berlin, I said that the only people who actually had rights in Berlin were the Berliners and that the others must have reasons for being there.

Mr. McNeil

The rights of the Berlin people are one thing. What we are here discussing are the rights of the Occupying Powers. All that we are concerned to say is that we have a right, which by signature, by statement, by practice and by usage we share in conformity with the other three Powers in Berlin. We have never attempted to claim singular rights. My right hon. Friend made it plain that when with our two Allies we departed from the attempt to secure Four-Power government in Germany that was not a matter of choice but a matter of necessity.

I was very indebted to my hon. Friend the Member for Attercliffe (Mr. J. Hynd) for recalling the various occasions on which we have attempted, in quite simple things like figures relating to coal production, to work in a quadripartite way, and how that has been refused. The main reason why we could not pursue our attempt was the obligation to our taxpayers and the other is explained by the figures which have been displayed to M. Molotov of the reparations, both capital and current, which have already been taken from Eastern Germany and which we estimate as being valued at more than 7,000 million dollars. If we are wrong in these assumptions, the reply is easy. The Soviet authorities could permit, as we encourage, inspection by reliable and equipped people of these dismantling and reparation activities. They do not; they shut out everyone and the conclusion is one, therefore, from which no one can escape, that there is something to hide and that our figures are correct.

No one who has looked at the hours that have been spent at the highest political level in an attempt to secure Four-Power agreement upon the subject of Germany can be otherwise than appalled at the prospect of resuming it. That does not mean for a second that we will not be available whenever there is a reasonable prospect of resumption. But, before coming to the Committee, I took the trouble to look up the meetings on this subject. There have been five sessions of the Council of Foreign Ministers, two devoted exclusively to Germany. In addition, there have been 61 meetings of the Deputies of the Foreign Ministers devoted exclusively and completely to Germany. Altogether, I estimate that a minimum of 300 hours has been spent on this one subject of how we could proceed in a quadripartite way to govern and move towards a settlement in Germany. I repeat that the London Conference was not of our choice. It was a necessity forced upon us by the non-co-operation of the Soviet Government at all these conferences, and in actual operations in Germany and in Berlin particularly. I wish to add that the conclusions of the London Conference are of an interim kind, calculated to give the German people, as they are entitled to have, an increasing responsibility in the government of their own country, and calculated to hasten the approach in Western Europe to political and economic normality. But the agreement is neither final nor exclusive. It can be adapted to government for all Germany whenever the Soviet Government are willing to enter into international conference to co-operate on this subject and not to enter in to insist on dominating this subject.

The next group of questions with which I would like to deal consists of those coming from people who approve the conclusions of the London Conference, but have suggestions and minor criticisms to make. For example, on the political side two points were made. We have been asked why the delegations to the Constituent Assembly should be both elected and nominated. The truth is that there was a difference at the Six-Power Conference upon this subject and we attempted to find a compromise. It has, therefore, been left to the Ministers' President to decide how their delegations will be composed. It is a matter exclusively for them, and I will not attempt to predict what kind of decisions they will take.

Another point related to the composition of the German representation upon the Ruhr Board. It must be plain, I think, that for the period of the occupation the occupying Governments must retain the responsibility of deciding what representation there shall be. What happens afterwards at the end of the occupation, of course, is a matter for whatever German instrument is appropriate.

Mr. J. Hynd

Does that mean that there will be no independent German representation on the Ruhr Control Board or any other of these joint boards until the end of the occupation?

Mr. McNeil

I do not think it is necessary to draw that conclusion. I prefer to stand where I am—that is, that the occupying authorities for operational reasons must retain the right to decide what the representation may be or will be.

Mr. Stokes

It is the same thing.

Mr. McNeil

No, it is not the same thing. Perhaps, if my hon. Friend reflects upon what I have said, he will see that there is, if not a substantial, at least a nice and an essential difference.

Mr. Stokes

It is too subtle for me.

Mr. McNeil

Perhaps I shall have the opportunity of explaining that point to my hon. Friend afterwards. I want to have a word with him, anyway, about his explanation of the calculation for the level of industry. It was a highly humorous and entertaining explanation, but I assure my hon. Friend, to whom I am often indebted, that he could not have been listening to our officials in Berlin—the officials who, as my hon. Friend has told us so often, have been so very kind and helpful. I thought he was confining his remarks to the figures—

Mr. Stokes

I would like to have a word with my hon. Friend about the food rationing which, I understand, has dropped another 55 calories since I spoke to him this afternoon.

Mr. McNeil

My hon. Friend is inaccurate even there. The difference between 1,715 and 1,750 is 45. [HON. MEMBERS: It is 35."] Turning to the food situation, I could not accept all the criticisms that have been made. I never pretend that anyone on the Government Bench can be or has been easy in mind about the food situation in Germany, but it should be conceded that the position is now better than at any time since 1945. For this month I am told the normal consumer ration will average out at about 1,550 calories, and for July it is going up to 1,715. Moreover, that is scarcely a fair calculation, because other additions have to be made. Taking into account the supplementary foods and the non-rationed foods, I am told that it will probably average out at about 2,400 calories per day.

Mr. Stokes

It is no consolation for a chap who gets only 1,715 calories to know that somebody else is getting 600 more.

Mr. McNeil

Again, I would agree that the system has never worked entirely equitably, nor quite with the results for which we hoped, but when there is only a limited amount of food we must distribute it in relation to production and to the needs of the whole community, and that we have been attempting to do. Perhaps I may be permitted to quote to my hon. Friend just a phrase from a nutritional survey which has been concluded by a British Government-United States team. The British scientists were Sit Jack Drummond and Professor Cowell, and the experts reported that generally the nutritional state of the Germans has improved during the past year and is now at a level which permits the maintenance of a fair state of health, although it does not in all cases enable the supporting of full working capacity. There are no reasons for complacency and the anxiety of the Government on this subject will continue, but there is reason to take some little pride in the fact that, despite all the puzzles of difficult distribution and much more difficult buying during a period of world shortage, an improvement over the year is attested by experts.

A great many questions were raised about production and in not all cases have I the time or the information to deal with the questions at the present moment. I would like to say that coal has been puzzling and not altogether satisfactory. We think we know two reasons, one relating to the ineffective working of the incentive scheme and another dealing with individual management in the mines planning on a long-term basis, rather than for immediate production. Over the last month we have been addressing ourselves to the second problem. I would like to tell the Committee that, perhaps as a result, the latest figures for last Monday gave us an output of 300,000 tons, a performance previously achieved only on one day in March.

Turning to steel, about which my hon. Friend told us a great deal, again any success is comparative, but it is not negligible. Production in the first half of this year will reach almost two million tons.

Mr. Stokes

For half a year?

Mr. McNeil

Yes, for half a year. This figure compares very favourably with the 2.9 million tons which was our total output for all last year and not unfavourably with the 4.1 million tons for this year, which was the target tabled with the Committee for European Economic Co-operation in Paris. It does not, of course, compare in terms of the six million tons which is our target and up to which we must move for normality. We hope that the currency reform, which again in varying degrees has been criticised, will contribute, not immediately perhaps, but eventually to strengthen production in the three zones. There will be, undoubtedly, pockets of unemployment and areas of dislocation due to this change-over. These are being worked upon, though not with the singlemindedness we should have hoped, because of the major dislocation at present in Berlin.

In what was otherwise an altogether admirable speech, the hon. Member for East Coventry (Mr. Crossman) was quite wrong in saying we had made no discrimination in our measures of currency reform between the small saver and the large capitalist—the small saver and the black marketeer. It is true we have not sought to provide escape clauses at this moment, because we were anxious to have an over-all reduction as quickly as possible. But, as part of the over-all plan, it has been laid down that by 31st December this year a capital levy must be imposed. We could not impose it at this moment.

Mr. Crossman

Why?

Mr. McNeil

Because we have had to try to secure the immediate and over-all reduction, and we were advised that if we discriminated and differentiated we should open so many gaps that our major object would elude us.

Mr. Crossman

Surely, it is the fact that the plan for a general capital levy and currency reform was, in fact, worked out in detail at Frankfort and postponed only at the last moment? Surely, it is untrue we could not do the two together? How does my right hon. Friend suggest that a German administration, the taxing authority, could carry out in six months a capital levy?

Mr. McNeil

It is not true there was a plan for providing for a capital levy. It is nearer the truth to say that we have had a score of plans. We have had the advice of all the experts we could lay hands on in this complex business of introducing a new currency. The proceeds of the capital levy are designed to deal with the most obvious cases of hardship, which, perhaps, were the type of thing that my hon. Friend was thinking about when he talked about the effect of the reform upon the small saver. It is tempting, too, as I think he and my right hon. Friend suggested, to say we should have delayed this altogether until we could introduce coincidentally, social legislation. We could not do that because we had no instrument for social legislation, and it seemed to us that if we delayed currency reform any longer the position would further deteriorate, that commercial dislocation would increase, and that much misery would be visited upon the peoples of the Western zones; and, of course, almost certainly a higher tax burden would be visited upon the people for whom we are responsible.

Mr. Bellenger

It is quite obvious that at the moment we can discuss only one very small part of the reform of the currency in Germany. When are we to hear of the total plans, and how far are the Government to have an influence on them?

Mr. Gallacher

Very little.

Mr. McNeil

The hon. Member for West Fife says "Very little." My hope is that we always defer to the wishes of the democratically elected representatives in matters which we think concern them. So I am not able to say how far the whole programme will be on our hands. We knew from the beginning that it would be complex and, in some respects, hazardous. There are indications that the initial steps have not been unsuccessful. For example, consumer goods are now available in the shops which were not available before. The important point is to find out whether the new level will be an incentive to increase production of those consumer goods.

There have been a good many questions on dismantling. For example there are already capital plants which have been removed from Germany, and which could not have been put into operation in Germany, which are operating in this country and other countries, and will, therefore, in the immediate future, be making a contribution towards European recovery.

The four principles upon which we have proceeded with reparations have already been enunciated, but I say to the hon. Member for Ipswich and to the hon. Member for Attercliffe that there can be no suggestion that we have discriminated against German production in favour of British trade. Dismantling is taking place primarily in relation to security. The order of priorities has been related to production in the manner to which I have already alluded. Destruction of property worries me a great deal more, and I shall be very glad to look at the examples to which my hon. Friend drew attention, but it should be known that it has already been agreed and is being acted upon that no destruction of property shall take place unless it is specifically military construction; anything else which is useful to the economy of Germany is in the meantime being left.

There is not a great deal which I can add about Berlin. No one asked me for detailed information about our plans. It would be embarrassing and improper to hint about them. Let me say that not all the comments made conform to the information available to us. The right hon. Member for Warwick and Leamington (Mr. Eden) asked about publicity. I am told that the papers in the three zones have responded very well indeed, and that today there are headlines upon the British, French and American proposals for the feeding and building up of reserves in the city.

Mr. Nicholson

In the three sectors?

Mr. McNeil

In the three sectors. In addition, we have had a good service from the radio. I am also told that the best organs for disseminating good news in Berlin just now are the engines of the transport planes which are going in and out steadily. There is one other point which I should make. Hon. Members have no doubt read newspaper reports suggesting that concentrations of balloons, accompanied by Soviet fighters, have been seen in the air corridors today. There is no official information confirming that at all. The air safety officers in Berlin have issued a statement explaining that no pilot has seen anything of them. I would be the last person to suggest that any newspaper man from a reputable British newspaper or news agency would behave irresponsibly, but I am sure that they will all appreciate that there is a great need and great obligation upon them to be cool and more than careful in their reporting just now.

There is one other piece of news which I should give to the Committee. This afternoon, since the Debate began, His Excellency the American Ambassador has informed my right hon. Friend the Secretary of State for Foreign Affairs that Mr. Marshall will make a statement saying in unambiguous and forceful language that the United States will stand firm upon its right to remain in Berlin. That, of course, expresses the attitude of all of us upon this subject.

As my right hon. Friend has said, the message this morning from Marshal Sokolovsky may mean something new, and is receiving the closest study just now by my right hon. Friend and his experts. I say that because it must be clear to the whole Committee that we do not exclude any method of ending this impasse in Berlin; but when I have said that, it must be equally clear that whatever method is adopted nothing can relieve us from our obligation to exert ourselves to the utmost to meet the obligations we have towards the two or two and a half million people in Berlin. As is known, there are not inconsiderable stores in Berlin. We are already, we hope, moving towards the point where, in no great period of time, we shall be able to take in daily an amount of supplies equal to the essential needs of the people in the three sectors.

We are, as my right hon. Friend said, proceeding in the closest association with the United States and with France, and with the democratic elements in Berlin to whom so many hon. and right hon. Gentlemen have most properly paid tribute today. We are in the closest association with them as well as with the Powers with whom we collaborate. The Commonwealth countries are fully informed, and no information is being denied to any friendly country obviously seeking such information.

I should not like to close without paying tribute to the morale and the common sense which the population of Berlin is displaying in this emergency. We have no reason to believe that as long as information is available to them their attitude will be otherwise. Two hon. Members complained of what I might describe as local ignorance, and levelled criticism against our publicity methods. The test of publicity is not whether this or that item of information is known to everyone, but whether at this moment our policy is fully understood by the people of Berlin. There is no doubt about the reply to that question. It is fully understood; and it is because it is fully understood, and fully approved, that the Berlin people are displaying this outstanding morale and approval of our policy at this time.

I repeat that His Majesty's Government will consider any suggestion or any approach; but no one should confuse our caution with timidity; and no one should mistake our moderate attitude for weakness. We not only have our obligations in Berlin, which we will discharge, but we also have our rights, and we shall see that these are honoured to the limit of our capacity, and with the equal firmness which we attach to our obligations.

Motion made, and Question proposed, "That the Chairman do report Progress, and ask leave to sit again."—[Mr. Snow.]

Mr. Nutting

Might I repeat the question which I asked the right hon. Gentleman about Vienna? I do not want to exalt the importance of my own question, but I did ask him whether he would stale whether His Majesty's Government are prepared for a similar situation there.

The Chairman

That does not come within the purview of the Question.

9.55 p.m.

Lieut.-Colonel Sir Thomas Moore (Ayr Burghs)

The right hon. Gentleman, just before he sat down, indicated that he would receive any suggestions that might possibly assist the Government in dealing with the very difficult question which exists now in regard to our relations in Berlin. I have pleaded once or twice before, and I repeat the plea, that definite action should be taken by His Majesty's Government to bring it home to the Soviet Government that we have decided on a certain course of action, and that action is to preserve peace, but at the same time to be ready for war. I would suggest again that either the Foreign Secretary, or indeed the Prime Minister, Mr. Marshall and my right hon. Friend the Leader of the Opposition go to Moscow and put the question straight to Marshal Stalin, which we all know to be the truth: "Do you want peace or do you want war? If you want peace, we will co-operate and work steadily to that end, but if you want war, or even to preserve this tension which exists in Europe and the world today, we will have to accept your decision and you will have it." It is no good standing by and waiting for things to happen. Positive action is needed. The Secretary of State has made a very handsome contribution towards the solution of our difficulties, but they are words, and I believe that the Soviet Government will only understand action, and today the peace of the world may depend on the action His Majesty's Government take.

The Chairman

The Question is—

Mr. Nutting

On a point of Order. May I draw your attention to the fact, Major Milner, that it is still Three Minutes to Ten o'Clock, and I have asked what is, I think, generally regarded on this side as an important question of the Minister of State. May I put it to you, Major Milner, that it is of vital importance that the Minister of State should, if possible, give an assurance on this point tonight? There is widespread nervousness in other countries bordering on Germany about the situation which may arise in their country. Therefore, may I ask whether the Minister of State will give a reply on this vitally important question?

Mr. McNeil

I was most anxious not to answer, because I think it most unfortunate that Vienna should be taken in the same context as Berlin.

Mr. Eden

I quite disagree with the right hon. Gentleman.

Mr. McNeil

I have expressed my opinion. It is not a question of military occupation but is a question of a civil government which is being undertaken through the four Powers concerned. Since I am asked particularly to answer, my answer is that the subject has been carefully and fully studied, but that we do not think there is such a parallel, nor do we foresee such a contingency.

Question put, and agreed to.

Committee report Progress; to sit again Tomorrow.