DEBATE ON THE ADDRESS

HC Deb 01 November 1948 vol 457 cc523-637

[FIFTH DAY]

Order read for resuming Adjourned Debate on Question [26th October]: That an humble Address be presented to His Majesty, as follows: Most Gracious Sovereign, We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament."—[Mr. Bowden.]

Question again proposed.

3.32 p.m.

The Chancellor of the Exchequer (Sir Stafford Cripps)

Since Parliament last met, there has been a good deal to report in the way of economic affairs. The principal interest and activity has centred around the O.E.E.C. in Paris, where our representatives have, with those of other nations, done a very remarkable job. Night after night, they have worked until the early hours of the morning, for seven days a week, in order to bring to success the division of aid, the European Payments Scheme and the first year's complete plan for Western Europe. I should like to take this opportunity of thanking them publicly for the very excellent job they have done. They are now engaged con the four-year plan which will, when at is complete, demonstrate Western Europe's hope for viability without exceptional aid by the end of 1952.

In the meanwhile, as I have said, three most important steps have been completed and were finally passed at the Council meeting in Paris on 16th October. On that day, too, the convention of the European Payments Scheme was signed on behalf of the 19 participating nations. I am sure the House will wish me to give a few words of explanation upon these somewhat complicated documents which do in fact lay down the line of policy which we intend to pursue through the coming year.

The agreement for intra-European payments and compensations is to be found in Command Paper 7546. The report of the O.E.E.C. to the E.C.A. in Washington on the first annual programme, which is an extremely bulky document, has been placed in the Library, where several copies of it will be found. The United Kingdom's covering note on its own revised programme for 1948–49 is tabled in Command Paper 7545 and the E.C.A. loan agreement is available in Command Paper 7550. It will be realised, I am sure, that the provision of European currencies under the European payment scheme is complementary to the provision of dollars under the E.R.P. It was realised early on that if as a condition of E.R.P. Europe was to do its best to increase the flow of its internal trade, some arrangement would have to be made to render scarce European currencies available to those countries which needed them. Otherwise, intra-European trade would be held up. That proposition was put forward by this country at the first meeting of the Western Union Finance Ministers at Brussels in April last, and by them it was referred to the O.E.E.C., whence it has emerged as a completed convention.

As the House will see from Article 23, it is provided that the agreement shall be subject to ratification and shall come into force when it has been ratified by all the signatory Governments. That, of course, will take some time. So far as the United Kingdom is concerned. Parliamentary approval will be required for the provision of the necessary sterling funds to meet our obligations and legislation to that end will be introduced as early as possible. There is, however, a protocol of provisional application, to be found on page 16 of the White Paper, to which all Governments have agreed, which will enable the Scheme to come into operation as from 1st October last, though on a provisional basis. The sterling funds required for that purpose will be made available in advance of legislation. I think there can be no doubt, and I have no doubt that the House will agree, that that is the right course in view of the most urgent need to build up the economic strength of Western Europe.

Before dealing with the contents of these various documents, I wish to say a few words on the economic situation in Western Europe and to stress the need and urgency for the fullest practicable co-operation to strengthen the whole basis of our European economy. It is not necessary for me in this House to stress the vast damage and dislocation caused by the war and the enemy occupation of the greater part of Europe. Those are well-known and accepted factors in the situation. But, supervening upon those, is another factor which is just as grave, and very much more dangerous to the future of Europe.

We have all become only too familiar in these last few months with the expression "the cold war" and with the activities of the Soviet Union and its satellite States in promoting that more subtle form of attack upon the democracies, not only of Western Europe, but throughout the world. But the spearhead of that attack has been against Western Europe, because the Soviet Union hope that, by creating a state of chronic economic weakness, they may be able to win domination by their fifth column agents, as they already have done in, for instance, Czechoslovakia, Already, without their intervention, conditions were sufficiently difficult merely as a sequel to the war—a war in which we fought side by side with the Soviet Union to ward off a common danger, the danger of the spread of totalitarian Nazism by methods of economic attack and infiltration. There is still a general condition of economic malaise in Europe which is gradually and painfully being cured, but it is still sufficiently bad to provide an excellent opportunity for the internal economic sabotage which is being conceived upon a wide international basis by the Cominform.

This cold war is not by any means restricted to propaganda—that perhaps would not be too difficult in itself to deal with—but it is carried right into the economic life of all the democratic countries by the local agents and allies of the Cominform. Encouragement is given to every kind of activity which is likely to militate against recovery or to help to break down the national economy. Strikes, the advocacy of uneconomic policies, the stirring up of every discontent produced by the unavoidable shortages and privations, and the attack upon any kind of armaments which might protect the democratic countries in case of aggression from without or from within are pressed, accompanied by a completely false account of the Soviet Government's activities and policies.

All these policies which I have mentioned are followed uniformly by the Cominform agents in every country which is still free from Communist domination, in the hope that by economic disintegration they may be overcome. The exact identity of the propaganda throughout the world on these issues proves conclusively its common origin and its single aim. It is indeed sad to think that so many patriotic nationals in Europe are entrapped into actions most hostile to their own fellow countrymen by slogans which are false in sentiment and still more false in content.

But this cold war, an attempt to disintegrate the Western European economy, with its attack centred on the Marshall Plan because that plan is a basis for rapid recovery, emphasises the urgency of the need for the Western European countries to strengthen one another by the fullest economic cooperation. It is indeed symptomatic of the whole purpose of this cold war that the aggressors should have concentrated so much of their virulence upon the Marshall Plan. Their arguments, falsely based upon the suggestion of American economic domination over Europe, sound strangely cynical in the light of the economic subservience to which, as the world knows, the satellite States have been reduced by the Soviet Union.

Co-operation is, therefore, not only the means to overcome our own difficulties arising out of the war-time destruction, which are serious enough in themselves, but also to combat the chaos-producing tactics of the Cominform fifth columns, which are today so active in all the democratic countries. It is only by this economic co-operation that we shall be enabled to improve the lot of our own peoples and so to encourage them to resist the menace of totalitarian aggression. We must convince them by our actions, particularly in the economic field, that they will slowly but steadily realise their hope that democracy can both improve their lot and preserve their freedom. Democracy will fail if it remains static and unbending in isolationist insistence upon unqualified nationalist policies.

Our policy must, therefore, be to knit together the economy of the Western European nations, together with the vast areas in other parts of the world which fall within the same monetary systems, so that upon such a structure we can base a power and authority that will stand firm and unflinching against the aggression of any other forces in the world. That is the true key to our own independence and our own safety, and it is encouraging to know that the other nations of the Commonwealth share with us the realisation of the need for and the wisdom of such a policy.

With that short explanation of our policy, I return to the actual documents setting out the co-operative intentions of Western Europe so far as they have at present developed. Our own programme is, as the House knows, based upon an E.R.P. allocation of 1,263 million dollars to this country for this year, of which a quarter is by way of loan. The terms of that loan, which I commend to the House as being in every way reasonable, are set out, as I have said, in Cmd. 7550. Our own covering note to the programme for 1948–49, which has been widely and I think favourably commented upon, shows what we hope to be able to do in the course of the 12 months from July, 1948, to June, 1949. It shows that we expect a substantial degree of recovery but that at the end of that period a great deal will still remain to be done. Our standard of living will not be materially improved over this period though there will, we hope, be some easements. This is an encouraging forecast because it shows a progress in the right direction which, by 1952, should enable us to be wholly independent of any further exceptional external aid.

There is one point perhaps to which I should draw attention, that is, the volume of exports that we have taken as our achievement. This average figure for the year must not be confused with the targets which are put forward for individual industries, to be attained at a particular date, or indeed with the global target arrived at by a summation of those individual targets. We know from our experience of conditions in the world markets that, through rapidly and indeed suddenly changing conditions, those targets are bound to be affected. Some will be hit and even perhaps overshot; others will not be reached, so that the estimate of receipts from total exports is never likely to be quite so high as the sum of the individual targets aimed at. We have in fact taken as a total for 1948–49 a figure equal to 137 per cent. of 1938, whereas the target for 31st December, 1948, was to be, as the House knows, 150 per cent. That is the best estimate we can make in the rapidly changing markets of today, and it is wise in such estimates not to be over-optimistic. It is certainly easier, that is to say, to deal with the circumstances arising from an over-realisation than from an under-realisation of our export targets.

I now come to the Western European programme, as contained in the large document which I have mentioned, submitted by the O.E.E.C. to the administration in America. It would take far too long to attempt to give even a full sketch of this programme, and I must content myself with remarking a few items only, leaving it to those Members who are interested to study the complete document in detail. It shows, as a whole, that a substantial measure of improvement is anticipated in the economic position of the participating countries, and that a genuine, though at this stage necessarily limited effort, at co-operation has been made.

Let me give a few remarks to indicate the degree of improvement looked for. Bread grains, for instance, are expected to increase by 45 per cent. over 1947–48, the production of coarse grains by 12 per cent., beet sugar by 26 per cent., and oil cake and meal by 45 per cent. That should reduce materially the need for imports of these basic commodities from the Western Hemisphere. As compared with 1947, coal should increase by 14 per cent. and metallurgical coke, which is a vitally important factor, by 32 per cent.; pig iron by 68 per cent. and crude steel by 50 per cent. Substantial increases of non-ferrous metals, too, are anticipated from the participating countries, always including, of course, their overseas territories: aluminium 37 per cent., copper 16 per cent., lead 78 per cent. and tin 38 per cent. The chemical products required to support the agricultural programme are expected to yield 27 per cent. more in nitrogenous fertilisers, 29 per cent. potash and 10 per cent. rock phosphates. By July, 1949, shipping under the control of the participating countries should be 17 per cent. higher than in July, 1947.

The improvement of levels of food consumption will primarily affect those countries whose present levels are par- ticularly low. In other words, there will be a levelling up in food consumption, though generally the levels will remain below pre-war. The effect of the European Payments Scheme on intra-European trade is expected to show a general increase in that trade of over 25 per cent. above the 1947 figure, the biggest individual figure in that general make-up being 150 per cent. in coal.

But though the progress shown by these figures is certainly a marked progress, it still leaves a very large reliance upon E.R.P. Though many exports may be cut off and other sources of supply substituted in easier currency areas, the drive for more exports to the Western Hemisphere has so far made comparatively slow headway and it is on that we must now concentrate, because we do not want to arrive at an eventual balance upon the basis of the minimum of trade between Europe and the Western Hemisphere, but rather upon the maximum possible trade between those two areas. There can, I think, be no doubt from reading this most valuable and interesting document that without E.R.P. the prospects of Western Europe would be distressing in the extreme.

I now come to the European Payments Scheme. This Convention is associated with trade rules which will be found upon pages 17 to 19 of the White Paper. These are an essential and most important part of the whole arrangement, for they provide the basis upon which the creditor nations have been prepared to provide the funds under the Payments Scheme. The basis of these rules is this, that debtor countries must be economical in their external expenditure and do their best to increase their exports, while creditor nations——

Mr. Churchill (Woodford)

Was it "external" or "internal"?

Sir S. Cripps

External expenditure, and do their best to increase their exports, while creditor countries must be as liberal as they reasonably can in their import policies to try to help the debtors with their exports.

These rules are designed to bring creditors and debtors nearer to a balance, while those countries already in equilibrium would contribute to the desired end by buying more from the debtor countries and selling more to the creditor countries. If I may quote something said recently by Mr. Hoffman on this topic, I would remind the House of these words: It is my conviction that participating countries which are in a debtor position in intra-European trade must make every effort to increase their exports to other participating countries. That is an absolute condition of the success of the Scheme which, as the House will appreciate, might otherwise degenerate into a method by which one country improved its standard of living at the cost of another without itself making any contributory effort.

As regards the question of securing essential supplies to the debtor countries we have, first of all, got it clearly prescribed in the rules that it is the duty of every country, whether a debtor or creditor, to do its best to maintain and increase the essential supplies to others, so far as it can afford to do so without prejudice to its own recovery. Then, in order to reconcile debtor countries to relying on European sources of supply, rather than standing out for a bigger share of direct dollar aid so as to purchase those goods from the Western Hemisphere, the rules provide that net creditors shall facilitate the use of the funds they are putting up for the purchase of necessary goods, and in particular that all countries should do their best to increase exports of products which it is understood should be supplied within Europe as a condition of the agreed division of direct aid.

This Payments Scheme is the first concerted step towards the re-establishment of multilateral trading in Europe and provides, as nearly as has been found possible, enough of the scarce currencies, Belgian francs and sterling, to enable the countries receiving them to obtain all their essential needs without the payment of gold or dollars. It has not been possible to eliminate altogether the need for balancing payments in gold, since the total of Belgian francs made available will not, it is calculated, be sufficient to cover all the needs of all the other nations though they will go a very considerable way in that direction. We may, therefore, have to continue to make gold payments to Belgium, though on a reduced scale, under our bilateral agreement with that country.

Switzerland and Portugal do not receive any dollar aid and, therefore, have not come into the second part of the Convention which deals with the payment of money and have not made any of their currencies freely available. To Switzerland, at least, we may possibly have to pay some gold in the future. Nevertheless, the greater part of the difficulties are removed, and so far as sterling is concerned we believe that we have removed the whole of the difficulties of others who were suffering from a shortage of sterling. This will, of course, cover the trade of the participating countries not only with the United Kingdom but with the whole of the rest of the sterling area as well, and, out of the nearly 500 million dollars worth of sterling we are putting up, or allowing to be used this year, probably 70 per cent. of it will be spent in the sterling area outside the United Kingdom, mainly upon raw materials.

The drawing rights under the Scheme are shown in Annex C which shows net drawing rights of sterling equivalent to 282 million dollars. That money will not be repayable to us. It is a gift. In addition, various countries will be allowed to draw down their existing sterling balances by an amount estimated as being equivalent to 209 million dollars. All this relates to the year 1948–49 for the period from 1st July to 30th June. I should also mention the question of the transferability of drawing rights, to which I referred in the House when I spoke on 16th September last and which I took up with the E.C.A. when I was in Washington. One objection to this was that any automatic right to transfer would almost certainly have landed us in gold payments to countries to whom we are debtors. On the other hand, we have been accustomed to allow a very wide measure of transferability of sterling where that danger did not arise. In Article 4 of the Agreement it states: Contracting parties, while not binding themselves to accept second category compensations"— that means transfers. which increase another country's sterling holdings— intend to co-operate fully in facilitating any reasonable propositions put forward to them by the Agent who manages the Fund— having regard to all the circumstances concerning such compensations. That really accords with our practice.

We shall certainly go as far as we can to allow free use of sterling multilaterally. But we must reserve the right to refuse transfers where they might involve us in a gold liability. Article 17 of the Agreement provides that there should only be a revision of drawing rights in exceptional cases and that the O.E.E.C. shall provide some machinery for supervising the scheme and considering representations on such points. The Council will then decide what, if any, recommendations to make to the E.C.A. as to the conditional aid which is associated with and related to the drawing rights. That seems to us a satisfactory solution of what at one time appeared to be a very difficult problem. There will, we anticipate, be a need to renew this scheme after the first year though it may have to be amended, of course, in the light of experience. If it is renewed, a fresh set of drawing rights will have to be agreed upon. They will no doubt reflect the movement of intra-European trade towards a better state of equilibrium.

Though I have devoted the major part of my time this afternoon to this matter of Western European co-operation, because so much has happened with regard to it in the last few weeks and because it is of such importance for the future, it must not be thought that this is the only or necessarily the major economic matter with which we are concerned. We have discussed its implications with the other Members of the Commonwealth because we attach the very greatest importance to our cooperation with them, which is linked up, through their use of sterling, with this common effort in Europe. We had the most frank and full discussions with the representatives of the other Commonwealth Governments and we are all determined to achieve an ever closer degree of consultation in the future on these many economic matters which are, of course, common concern to all of us.

Canada has its own special problems and I welcomed the opportunity of a short visit there in September to have some very helpful conversations with members of the Canadian Government. I am sure that as a result we both understand each other's economic problems much better, and in order to keep these matters under close and constant review we have set up a continuing committee to meet alternately in London and Ottawa in which senior officials of the economic departments of both countries will take part with the High Commissioners and which will advise Ministers so that they may in good time foresee any difficulties that are likely to occur.

Finally, in the still wider field, there are the activities of the International Monetary Fund and the International Bank. As hon. Members know, I attended the third annual meeting of the Boards of Governors of those two bodies in Washington a few weeks ago. I must say that I was greatly impressed by the work they are doing. I regard them as valuable instruments of international finance and economic co-operation especially when the more immediate and violent difficulties of the moment have passed.

The external aspect of our economy with which I have been dealing inevitably demands at the moment a very large share of our attention, but it is, of course, closely linked to our domestic policies so that I must, in concluding this explanation of our economic policies, say a few words upon the internal situation. The House will remember that it is about a year since the introduction of a Supplementary Budget with the primary objective of counteracting the inflationary pressure upon our internal economy, and that this was also the main objective of this year's Budget introduced in April. While it is far too early to be able to make any confident judgment on the situation, it is interesting to see how we are progressing. Revenue is coming along in a satisfactory way and we hope that, taken as a whole, we shall do as well as our estimates. On the expenditure side, there has been an increase in the cost of subsidies; that is to be judged in relation to the success of our policy on personal incomes, profits and prices of which it has been an integral part. The House will be aware that we are incurring some additional expenditure also on defence, which none of us likes but which is unavoidable in present circumstances.

The effect of these changes, as far as can been seen, will be some reduction in the surplus expected, but not enough to counteract the main policies of the Budget. Any substantial further increase in our expenditure on defence would, however, make it necessary to reconsider the whole of the rest of our economic programme. The surplus budgeted for is needed towards the total savings required to finance the investment programme and to compensate for the reduction of goods in the home market as a result of our import-export policy. Exports have been keeping up very well and, though we are now finding that the seller's market is coming to an end in some parts of the world, we hope that this year we shall not be far off realising our anticipations. Indeed, the success of the export drive, while it reflects the greatest possible credit on labour and management in British industry, is also the best tribute to the soundness of our budgetary policy.

On the home side, investment seems to be coming out at a rather higher level than we anticipated last autumn, but the added strain which this has imposed on our economy has been partly offset by increased production. I am often asked a very important question which concerns both exports and investments: Why do we export capital goods, especially industrial machinery and machine tools, which are badly wanted for re-equipment at home? The answer is that we have to import a great part of the food which we eat and the bulk of the raw materials with which we work. We have to export, if we are to maintain our imports, not what we can most easily spare, but what our customers are prepared to buy. We are all anxious that British industry should be as well equipped as possible, but our first concern must be to maintain our essential supplies from abroad. It is no use having the best of new machinery if there is no raw material with which it can work. I must point out, however, that, in view of the expansion of the industry, the amount of British machine tools that will go to home investment this year will compare favourably with any corresponding pre-war figures.

Largely owing to the restraint which has been shown on all sides, prices and wages have become much more stable than they were last year. I pointed out last April that we must be ready to reverse our policy if any marked degree of deflation became apparent. No such tendency has developed, and, indeed, the unemployment figures have remained remarkably low. Nevertheless, there have been a number of signs of the easing of the position in some parts of our economy; but we are still struggling upward from the very precarious position in which we found ourselves a year ago, and we are still imposing a very full load on our economy. In these circumstances, it cannot be expected that there should be a great or sudden relaxation of controls. Yet the trend towards a more comfortable position is clearly marked. Clothing rationing, for example, is much less onerous, and so is the rationing of furniture. Bread is off the ration, and so are many kinds of jam. Over a wide field of miscellaneous goods, supplies are certainly much easier than they were.

If these are only straws in the wind, they at least point in the right direction. We have not, however, done all that we wished to do, and, in particular, the need for a continuance of savings and of restraint on consumption is as great as ever it was. The limitation of dividends has, on the whole, been faithfully observed, and business is, in this way, making its contribution. The response of wage-earners to the appeal for stability of wages has also been extremely encouraging. In the last seven months, both the wages and prices indices have risen only two points, which marks a great improvement on what was happening before. Personal savings, however, are still disappointing.

We have all benefited this year by the ending for a time of that hopeless chase of incomes always rising but always lagging behind prices. That has been brought about by the marked slowing down of the general rise in prices to which I have referred, but we shall only continue to enjoy this improvement if we continue in our present policy. The task of the nation will certainly be eased if we all contribute through restraint on consumption. This year's Budget made tax concessions which were equivalent to the tax increases. It did not make the task of saving any harder, but, despite that fact, savings themselves have not been so good.

Finally, a word about Government credit. This is, in many ways, a test of the view generally taken of the fundamental soundness of the Government's financial and monetary policy. It is, therefore, gratifying to note the very good response to the recent issue of the British Electricity Authority stock. The sum involved was a large one—£100 million—but it was over-subscribed immediately it was issued, and has since then stood at a small premium.

In the Gracious Speech, this passage occurs: My Ministers will continue to devote themselves to the problem of the balance of payments. Fortified by the generous aid of the United States, and working together with the other members of the Commonwealth and of the Organisation for European Economic Co-operation, we shall hope to progress further towards paying our way abroad and restoring the prosperity of our country and the world. It is only by our continued exertions and self-restraint that we shall win through. Inventive thought matched to hard work is necessary to enable workers and management, in common effort and counsel, to make the fullest use of our available resources.

Mr. Churchill

Do not spoil it all.

Sir S. Cripps

By increasing the individual contribution of skill and labour, we must build up our production still further. That passage stresses the fundamental need behind all these policies which we are pursuing. It is our own intelligence and hard work that will place us back in the position to balance our overseas payments, to co-operate with Western Europe, build up its economy and that of our own Commonwealth, and develop our own resources to earn a higher standard of living for our people. If we persist with the same singleness of purpose and determination that we have shown during and since the war, we can have no doubt as to our capacity to win through, in the course of the next two or three years, to a position of economic independence and to the possibility of increasing our standards of living and happiness.

4.17 p.m.

Sir Arthur Salter (Oxford University)

Only in the last 10 minutes of his speech, and then only in very general and almost platitudinous terms, did the Chancellor refer to the national economic situation, which seems to me to be the basis of what ought to be our discussion today. We are, after all, discussing now the economic aspects of the proposals in the Gracious Speech, and, in particular, the situation as it bears upon one very important legislative proposal. The Chancellor spent almost the whole of the earlier part of his speech in describing to us, in very minute and technical detail, the recent developments in the policy and achievements of Marshall Aid and O.E.E.C. There was very little indeed in that with which I disagree with him and much that I welcomed. I welcome in particular his description and defence of the Marshall scheme against those who have criticised and attacked it, and I recommend much of what he said about those who are attacking it to some of his supporters behind him.

If there is anything which I might find to criticise in this very technical description, I should certainly want further reflection. On the whole, in regard to what the Chancellor said about O.E.E.C., I am in full agreement. For the reasons I have mentioned, I will, with the permission of the House, speak in much less minute detail, much less technically and much more broadly on the general question of our economic position and the policy which has been put to us, not so much by the Chancellor today, as in his earlier statement in September and in the White Papers which the Government have published.

Perhaps I might say, as this is the first time that I have appeared not, indeed, at this Table, but at this Box, that I have not joined the Conservative Party and that I remain an Independent. It is true that, nowadays, I usually vote and speak against the Government as, when I first entered this House, I usually voted and spoke against the Conservative Government of that time. It is also true that as I have watched the evolution of Conservative policy, and as I have watched the evolution of Socialism, in practice and as applied by the present Government, I have found myself in closer sympathy with a Liberalised Right than with an over-bureaucratised Left. It is for this and other reasons which will appear that I welcomed the invitation to appear at this Box today.

Ten years ago, the right hon. and learned Gentleman and myself used very often to sit next to each other, not rarely in sympathy as well as in physical proximity. He has travelled far since then; so far, indeed to the extreme Left at one time, that he passed beyond the limits of tolerance of even the Socialist Party. Now, in his high and responsible office, I cannot but sometimes feel that he is occasionally deflected by the pressures of his earlier associates, and sometimes, perhaps, embarrassed by the memories of his earlier utterances. But, at this moment, I am almost embarrassed myself by the distance he has travelled in his circular progress to such -a point that by far the greatest part of what he has said today finds me in full agreement with him. There were, however, in what he said a few echoes from his earlier past. I do not think it was perhaps, altogether the best method of rallying the nation to defence against the Communist menace to take such pride in the part that he himself has taken in the evolution of the British Empire. [An HON. MEMBER: "Get on with it."] Well, we have again had a lucid exposition of the particular subjects—the rather limited subjects—with which the Chancellor dealt. We have admired the clarity of his exposition as we have, in the past, admired his candour and his courage. I can say, certainly for myself and probably for most of those around me, that at least we would sooner have him than anybody else on that Bench in his present office. That is, after all, not a very extravagant compliment. Certainly the Chancellor shares one very great advantage with the year of whose record he has been speaking today—the year 1948. Both the Chancellor and the calendar year are, at least, a welcome contrast to their immediate predecessors. That brings me to the first main point I want to make.

Hon. Members

Hear, hear.

Mr. Churchill

Take your medicine.

Sir S. Cripps

It is not medicine; it is jam.

Sir A. Salter

My first main point is not so much about what the Chancellor has said today concerning progress in our national recovery—for he said very little—as about what he has been saying during the last few weeks. In effect, what he said in September, and has not modified today, is that we have made a great improvement in 1948 as compared with 1947. That is true, but if he compared 1948 with 1946 he would find a very different situation. The year 1947 was a disastrous one for this country, but it is a rather convenient foil for any apologist on the Government Benches who is speaking of the recent change in our situation.

Let us look at the main figures which have not been modified by anything which the Chancellor said today. Take our current trade deficit. It is running this year at the rate of, I think, £280 million. Last year it was £630 million, and in 1946 it was £370 million; that is to say, it is just a little better this year than it was in 1946. But take what matters more, our deficit in relation to the Western Hemisphere—£390 million this year, £670 million last year, and £360 million in 1946; that is to say, £30 million worse this year than in 1946. But that is not the worst. During the whole of this time we have been depleting the resources of our own reserves and of foreign aid. In 1947, partly as a consequence of the coal shut down—itself due to administrative incompetence and resulting in a loss of something like £200 million of overseas trade, I think the Chancellor told us, the drain upon our resources of foreign exchange and foreign aid was no less than £1,024 million that year. Although, of course, we have not repeated that disastrous experience, I think I am right in saying that the drain in the first six months of this year was greater than in the whole of 1946.

I know that there are qualifications, some favourable some unfavourable. One of them is that, in this year, we are enjoying the benefits of the receipts from the sale of the Argentine Railways. As my hon. Friend the Member for Scarborough and Whitby (Mr. Spearman) said the other day, we are this year eating Argentine Railways to the extent of £100 million, but what shall we eat next? But, when we have made every allowance, the best we can say, in looking at the record of the trade deficit of these three years, is that we have nearly recovered in this year the loss of ground in 1947, and that, in the fourth year after hostilities ceased, we are nearly back to where we were at the end of the first 18 months. That seems to me—and I do not think it can be contradicted—a very serious situation.

But what about the future? The Chancellor said again, as he has said before—and I need not emphasise it to the House—that it would be utterly disastrous for this country if we are not able by the time Marshall Aid comes to an end—which we must expect will be in 1952 at the latest—to sell enough exports to pay currently for our essential imports. But by that time we shall not only have to produce enough to do that; we shall have to produce enough to sell in a competitive market, and, in all probability, a buyer's market at that time. I agree that we have made a considerable increase in our exports, but the rate of increase has been levelling off, and the present progress is not such as to indicate that, at the present rate and with present tendencies, we shall have achieved our goal by 1952. Most Members will have seen a very interesting letter in "The Times" on Thursday by Mr. R. F. Kahn, which argued that case.

I think it can hardly be denied that in our present progress, we are not going rapidly enough to attain our goal in the time. There are quite a lot of conditions which are hard to change but which we shall have to change if we are to reach that goal. I see that the Chancellor said yesterday at Bristol that if we allow for the differences in mechanisation, the people in this country are working as hard as people anywhere else and are producing as much as anybody else. I am not sure that that can be sustained. My very strong impression is that both in countries in the same plight as ourselves and in countries in a better position than ourselves, people are, on the whole, working either more intensely or for longer hours, or both more intensely and for longer hours—in America, Holland, Belgium and Switzerland alike.

I do not wish now to press that point further, but looking at the situation which now confronts us, it is scarcely possible to believe that by extra mechanisation alone or by any changes in the size of our manpower, which indeed is likely to be rather less than greater, we can reach our goal by 1952 or that we can reach it in any other way than by an increase in the output per man—that is, an output additional to any increase that comes from increased mechanisation in this period. I do not think it is possible to escape that conclusion, but if so I suggest it should not be possible to escape a further conclusion, which is that in these next few years the first and overriding consideration in regard to any administrative action and any legislative proposal should be that it will help and not hinder an increase in output per man.

It is in the light of that, that I should like to make some remarks on the Government's record up to date. The Chancellor said something about the Budget today. He indicated that the Budget surplus which he originally budgeted for has been reduced, but I think he suggested that it had not been reduced to a very serious extent at present. I wonder whether he had reckoned everything that should have been reckoned when he made that rather general remark. He referred to the necessary burden of extra defence expenditure. He referred, but without giving the figures, to the very serious increase in the food subsidy figure which has gone much beyond the £400 million which was announced at one time by the Chancellor's predecessor, I think, as the limit. In addition to that, however, there is one thing which he did not refer to at all, and that is the notorious increase in expenditure under the new Health Scheme through perhaps over-generous and lax administration.

I welcomed the Chancellor's Budget surplus when he introduced his Budget. I realised that at a time of inflation it is absolutely essential that there should he such a surplus. But there is one danger about the appearance of a big surplus, as anyone who has had experience of the finances of this country will agree, and that is that it tends to relax the control of expenditure and extravagance in the public services. It is much more likely that there will be lax and extravagant administration if there seems to be a surplus upon which the Department can draw. The very great danger of that is that we may to an unnecessary extent be left with taxation permanently on a level which is incompatible with national recovery and national prosperity.

I said I agreed that it was essential for the Chancellor to have a Budget surplus in order to arrest inflation. He introduced the most distinctive new feature of that Budget, the capital levy, solely on the ground that it should help in the battle against inflation. Some of us said immediately at the time that so far from having that effect, such a tax would have the opposite effect. That was admitted by a Government spokesman in another place within a fortnight of the introduction of the Budget. I do not think the Chancellor himself would at this moment contend that the capital levy had helped at all to reduce inflation. What his critics said was that it was bound to have a serious effect upon the cost of National Savings. What has happened in the past year about savings? So far from net savings having merely come down, they have simply ceased. In the last year there have been £443 million worth of withdrawals or encashments against £434 million of new savings—an actual net deficit of £9 million.

I do not contend that the capital levy is the sole cause of that, but it is undoubtedly a contributory cause. If anything was wanted to make that contribution greater, it was the speech of the right hon. and learned Gentleman's predecessor made at the moment when the capital levy was introduced. At the very best, it cannot be contended that the capital levy has done any good in regard to the one purpose for which the Chancellor told us that he introduced it, namely to reduce inflation. When a sacrifice has to be made in the national interest I am all in favour of it falling more heavily upon those most able to bear it. But if a particular sacrifice does no good at all to the country and does harm, then its imposition is merely spiteful. That is an instance of what I meant when I suggested that sometimes I think the right hon. and learned Gentleman has had to yield to pressures against his better judgment.

Before I pass from the question of internal finance, might I just ask—because this is very relevant to the inflation problem—what is happening to the Government's policy for a considerable reduction in capital investment? How far has the £2,000 million been reduced, in the Government's present policy, and in particular how far has capital investment been switched to the kind of capital investiture which will produce results in the next four years? How far again have the Government been successful in the redeployment of labour? Is it the case that by the combined effect of direction of labour and financial policy they have secured an actual increase of a substantial kind in the essential industries, or have they done no more than arrest an actual decline? I do not know the precise answers to those questions; obviously we need to know them in order to assess the position, but whatever may he the precise result it is obviously a pretty sombre picture.

It is in relation to that picture that I suggest we ought now to look at the Government's new proposal for extending the scope and scale of nationalisation. And we should have regard also to their record in what they have nationalised already. I have watched their socialisation critically but not hostilely for the last three years. I was and am in sympathy with the kind of picture which the Leader of the House has frequently painted to us in his less recent speeches—the picture of a public sector with about 20 per cent. of the nation's economy, a private sector with about 80 per cent., with every proposal to add to the first sector having to prove its case on the merits of the change, and with the public sector and the private sector alike so established that they can pay their own way. I agree with those principles. I profoundly disagree with the application of them by the Socialist Government during the last three years and I will suggest why.

The fact is that both the ordinary capitalist system and socialisation each have their characteristic dangers and defects. The difference is that the dangers of the first have been faced and their problems very largely solved. We know a great deal now about how to counter the kind of depression, the kind of difficulty, that arises from an excess of production over demand. But the dangers of large socialisation are of a very different kind; they are how to prevent, without the aid of external stimulus and external criteria, a sagging inefficiency and increasing costs. I said that the problems which result from a capitalist competitive system have been faced and, to a large extent, solved, and I would refer to the Coalition Government's White Paper on Employment, though I do not propose to discuss that in detail.

The problems, no less serious, of socialisation have not even been faced by those who introduced socialisation so rapidly. Let me refer to one of them. What is the position in these great public monopolies, with a range extending over things so different as harbours, ships, railways and road haulage, so constructed financially that the receipts from one part can be used for expenditure on another, so wide in their range that the consumer has no alternative; what is the position when, for example, something arises which threatens considerable additional cost—it may be extravagant administration, it may be a demand for higher wages or shorter hours? The whole collective system of bargaining with its traditions, which has been most practicable and beneficial in relation to ordinary industry, has been taken over where the fundamental underlying factor that has made it practicable and beneficial no longer exists. When there is bargaining between management and men in private industry, the underlying fact which makes that system beneficial is that both sides know that beyond a certain point—though they may dispute what is that point—bankruptcy will involve both sides in disaster.

In the great public monopolies that restraining factor no longer exists. They can draw on other parts of a vast concern. They can pass the higher costs on to a consumer who has no alternative and, in the last resort, they can draw on the taxpayer to meet their losses. When there is a bargain in those circumstances there is no longer that more or less equal compulsion on each side. On one side you may have people threatening to strike and on the other side you may have a management threatened with the immediate breakdown of an important public service but knowing that they can avoid it by a concession of which the result will be very distant and even doubtful.

What happens in those circumstances? It is inevitable that there will be a tendency to higher costs all the time, and they will be passed to the consumer, who cannot avoid them because he has no alternative. I think the mind of the Government towards this kind of problem is perhaps best shown by the form in which they originally introduced the Transport Bill in which they proposed that the trader should not even have the opportunity of carrying his own goods. Under pressure that particular provision was happily taken out, but the very fact that the Government introduced it shows that when they got the first glimpse of what is really the basic problem of Socialism, how to supply some alternative to the ordinary compulsion that operates when bankruptcy is possible; their first instinct was to run away from it, and to try to exempt those who run a national concern from either external stimulus or external criteria. That is the explanation why, I think, in Bill after Bill we are starting off with both higher costs and financial losses.

That would not matter so much, although it would be serious, if it affected only 20 per cent. of the national economy. But it is most misleading to speak of the economy of this country as divided into a 20 per cent. public sector and an 80 per cent. private sector, because everything in the private sector depends absolutely on what is done in the public sector. I do not object to 20 per cent. and 80 per cent. as a frontier between the two. What I am afraid of is the most deadly form of infiltration across the frontier. I fear that, bit by bit, increasing costs in the public services, which provide for all private industries their power, their fuel, their lighting, their heating and their transport, will make the task of the private industries impossible, and that the private industries will be starved into ruin and destitution by the cost of their necessities.

That is the more serious because we rely for our export trade, with what has become the minor exception of coal, entirely upon the private industries. Domestic industries may be able to pass on higher costs to the unhappy consumer at home, who has no alternative, but the exporting industry can do no such thing. That, I think, is the crucial difficulty of our future balance of payments problem. By 1952 we have not only to produce enough to pay for our imports. We have to produce enough, in a hard competitive buyers' world market, to sell to consumers who have all the world to choose from. That is not all. There is a limit, as everyone in the House knows—not unchanging, but a limit at any moment—to what the whole machine of Government—Ministers, officials and Parliament together—can bear without the certainty of administrative incompetence and the danger of corruption as 'well. We all share the common anxiety that that limit should not be passed. But undoubtedly the load at this moment is too great.

It is because of that load, because of the rapid extension of socialisation, and not merely because of personal incompetence that we have had the succession of administrative blunders in the last few years. That, and not Ministerial contempt for Parliament, is the real reason why Parliament has lost and is losing so many of its effective rights by gags, censures, closures, guillotines and restrictions on Debate. That, and not Ministerial enjoyment of power, is the real reason for the over-concentration of authority in the Bench opposite which, to combine two phrases used by hon. Members in the last few days, is creating a society of zeros and Neros. Lastly, that and not merely official ambition is the reason why the voluntary organisations of this country are being undermined—the voluntary organisations which, for over a century, have humanised political bureaucracy and broadened the basis of political democracy.

There is one other disadvantage of these great national monopolies which, I think, is now being realised by the workers. If a man is dismissed from a great monopoly, he may be sentenced either to destitution or to degradation from the status of a skilled worker to that of an unskilled worker, and the sentence may be for life. What is the inevitable consequence of that? It is, obviously, essential to efficiency that sometimes, for incompetence, or slackness, or subversive action, or persistent absenteeism, it should be possible to remove a man. But it is incompatible with the rights of a free society that, if a man is dismissed, he should be liquidated, as he is in a dictatorship country, or sentenced, as he may be by a great public monopoly in this country. to permanent degradation.

In that dilemma, what is, of course, likely to happen is that many men who should be removed will not be in fact removed, and efficiency will suffer; while a few will be removed, some, perhaps, for the crime of not belonging to a particular union, or even working too hard, and will then suffer a punishment altogether disproportionate to their offence.

These seem to me to be features of Socialism in practice, as we have observed it for these years, which we ought to have in mind when we come to the Government's present proposal to extend the area of nationalisation by now including within it the most complex and the most efficient of our basic industries. They are proposing, as we all know. by the aid of the Parliament Bill, which is really a constitutional outrage, to enact that Bill quickly.

Mr. Follick (Loughborough)

Is this the right hon. Gentleman's last speech from the Front Bench?

Sir A. Salter

It is something of a triumph that a Bill with only a single operative Clause should manage to make a breach in three time-honoured customs of the Constitution. First, though a law changing the Constitution, it has not been preceded by an all-party consultation. Second and much worse, it has a retroactive provision which makes it deemed to have been in force before it has been enacted. In the third place, it is directed against a known and particular case, like the notorious Act which was to burn or boil a named bishop's cook. That, I suggest, is a constitutional outrage.

And for what purpose? What is gained by the introduction of this Measure at this moment? Is it in order to finance a capital expansion which would otherwise be impossible? Capital expansion does not mean simply or mainly money. It means the allocation of men and materials which would otherwise be engaged in producing articles for immediate consumption. There is a shortage of both. Government financing will not add to either.

Are the Government convinced that if, as an alternative, they issued the permits for the necessary amount of labour, and gave an assurance against nationalisation, the industry would not be able to raise its own money up to the limits of the men and materials available? Of course, it would. Nor do the Government, by tampering with the Constitution, gain anything even in time. If they win at the next Election, they can, obviously, enact the Bill very quickly; if they lose at the next Election the Bill will not be in operation, and it can, obviously, be quickly annulled.

I turn again to my main theme, which is our present position in regard to our export trade and the balance of payments. We are still living on our reserves and on bounty. We have, all these three years, been producing much less than we have been consuming. Last year, in 1947, I believe we were consuming more than we produced to the extent of the equivalent of about £1 a week for every family in the country. How can we fill that yawning gap, as we must do before 1952? Is it possible that we can do it unless we enlist every economic force at our disposal, unless by eliminating inflation, and restricting the area of control, we make the ordinary economic motive forces the servants and allies of public policy, instead of inducing them to work against it as they do at present; and unless, to quote an earlier Marshall, Alfred Marshall, the great Cambridge economist, we enlist the strongest and not merely the highest motive forces of human nature in the service of social good?

We have been shielded—we are still for the moment shielded—by American aid from the consequences of consuming more than we produce. And I think one or two things should be said in regard to this aid—not so much to the right hon. and learned Gentleman or to the Leader of the House, both of whom have again recently acknowledged frankly that our position would otherwise be desperate, but certainly to some of their supporters behind them.

The greatest asset to all the free peoples of the world at this moment is the miracle of American productive expansion under the impetus of freedom and economic incentives. The benefits of that expansion have lifted the standard of living of American workers and the standard of English and European workers far above what would otherwise have been physically possible. Those benefits have been offered to free countries without distinction, whether they are Socialist or not; offered to countries which have, under pressure and reluctantly, rejected them, as well as to others that have accepted them. The whole of the policy upon which this aid has been based, even in this Presidential year, has been kept above politics and based on bi-partisan support. The staff that has been appointed to administer the aid—the American staff—has been selected without any political bias, and it is one of the ablest teams of men I have ever known engaged upon a considerable international task.

That is what American aid means to us and to Western Europe at this moment. But some of the dupes or disciples of Communist propaganda have said two things. They have said that America has done this because she wants markets for her exports, and they have talked about American economic imperialism. I would just say this. Anyone who knows anything about the American situation—and I have just returned from a visit to America, as the Chancellor has himself—knows that with American high prices and unsated domestic demand, if Marshall aid had been decided by Congress upon the basis of American economic interests, Congress would certainly have preserved the goods and the productive capacity for the American public, and would not have enacted that law.

As regards American economic imperialism, surely we should consider this: that there is a movement now for the integration of a vast area of Western Europe, including Great Britain, into a single economy and that area includes something like 250 million people—nearly twice the population of America—people rich in resources of industrial energy, and industrial skill and organisation. Divided, those countries might well be a subject for exploitation by a superior economic power. United, they may in time become an equal or superior rival to America herself.

What has been the attitude—what is the attitude—of America, of both the great parties in America, and of the public of America, to this movement? Has it been to retard a movement which may create a rival for America? Or has it been to urge and push and persuade us to go further and faster than we are going of our own accord? The answer to that is obvious; and it is also the answer to that mean and shabby libel. Is it possible for any of us without shame to reflect on and contrast it with the attitude of the Labour Party towards the participation of Labour Members in the conference at the Hague last May, two years away from any election, because that conference was being presided over by my right hon. Friend or because they could not endure the thought that free democracies should freely decide, as most of them have, to be ruled by non-Socialist Governments?

I have said that America is giving this aid, which is a matter of life and death for us in Western Europe, without discrimination between Socialist and non-Socialist Governments, though she is non-Socialist herself. But let us not be deceived. America will not judge us on our system. But she will judge us on our results. Marshall Aid has been enacted only for one year. Next year new appropriations will be required. Whether they will be voted, and what they will be, will most certainly depend largely on what progress we in Europe have made in the meantime. By our performance we shall be judged; by our fruits we shall be known. I have said enough to show the difficulty we shall have in doing our part to attain the goal which must be attained before the time has passed.

We have been considering today the economic situation, but uppermost in all our minds, underlying all that we do, is the menace to our freedom, the challenge to us to secure such unity in ourselves and unity with our friends, the free democracies of Western Europe, as alone can avert that menace. Debate, discussions, controversy and, in due course, electoral contests there will be, and there should be. But what unites us in common interest is immensely greater and, above all, more immediately greater than all that divides us. Cannot we all on all sides of the House put first and foremost the single and central task of these next few fateful years? We have a great task to achieve. It is not beyond our power, but we cannot succeed without concentration of purpose, wisdom in policy, an increase in both combined and individual effort. Surely, the Government should give a lead and an example. Surely, the responsible Executive of this country should subordinate or postpone everything that is either harmful or irrelevant to the achievement of these next few years of fate upon which all our future hangs.

5.4 p.m.

Mr. Ellis Smith (Stoke)

The Leader of the Opposition described the Gracious Speech as providing us with an opportunity for holding an inquest on national affairs, and today we have certainly had an undertaker at the Box. In the past, every General Election has produced new policies and new promises. Each new Parliament has resulted in a betrayal of the policies and promises made. Superimposed on these promises and policies have been slogans of deception, deliberately coined for the purpose of deceiving the British people—"Hang the Kaiser"; the "Red Letter"; the Post Office savings scare; "Save the Gold Standard"; "No More Moscow Gold"; "No More R.O.P.".

This is the first Government that will face the electors looking them straight in the face and able to say that almost every policy of the party outlined at the last General Election has been carried out. Wherever Ministers have acted as real Labour Ministers, applying a real Labour policy, they have met with real success. The Leader of the Opposition talked about our taking his medicine. I wish that he had remained to take some medicine. When he was speaking last Thursday about the "degenerate intellectuals," my hon. Friends around me were saying: "Whoever can he mean?" I immediately replied, "Why, one of his new-found friends, the hon. Member for Keighley (Mr. Ivor Thomas)."

We are today, as the right hon. Gentleman said, considering the Gracious Speech. I find myself in complete agreement with the opening words, and I hope that those words will find expression in the Government taking the initiative in a policy based upon those opening words. I was pleased to hear, and also to have it confirmed on the wireless the other night by the man to whom the people of this country owe more than to any other single man in the Government for the way that he has held this Government together, the Prime Minister, that the Government intend to give full support to the United Nations and to strive to fulfil the aim of world peace.

Later, we read in the Gracious Speech: My Ministers … fortified by the generous aid of the United States That aid is not generous. Then we have: My Ministers are taking steps to ensure … that the best use shall be made of the men called up under the National Service Act. How many more times is that going to be said? In my young days, when we went into the Services, the same applied, and time after time we have been faced with this same position. It concludes by saying: You will be asked to consider a Measure for the future organisation of Civil Defence. On that it should be clearly understood, and it is accepted by all students of modern warfare, that there is no defence whatever in modern war——

Mr. A. R. W. Low (Blackpool, North)

Oh!

Mr. Ellis Smith

Does someone doubt that?

Mr. Low

Yes.

Mr. Ellis Smith

All right, I will repeat that there is no defence in modern war. That hon. Members should introduce such levity when we are considering issues of this kind is an indication of the lack of responsible approach to this question.

Sir Peter Macdonald (Isle of Wight)

Will the hon. Gentleman tell that to the Secretary of State for War who is asking us to raise recruits for the Territorials?

Mr. Ellis Smith

I thank the hon. Gentleman for his interruption, but that is a question of defending this country, and I hope that we are all prepared to defend our country. When modern war starts on a large scale there is no defence. I am not asking hon. Members to accept my word for that, and before I conclude I shall quote the Prime Ministers of this country and of Canada and leaders of all the other countries in support of what I have said.

Mr. Beverley Baxter (Wood Green)

Will the hon. Member clarify our minds, which are a little muddled? [HON. MEMBERS: "Hear, hear."] It is quite true; we are even more muddled than usual after listening to the hon. Member. One moment he says that there is no such thing as defence, and the next moment he wants us to organise for defence. Would he clarify that?

Mr. Ellis Smith

If the hon. Member will stay until I have concluded my remarks he will hear me produce the evidence. The modern Brutus should hesitate before saying very much. Judging by the writings of the modern Brutus we can very easily place him in a certain political category.

Command Paper 6707 seems to have been forgotten by most people in this House. The British people and the Commonwealth made a mighty effort to win the war. We went short—or the ordinary people did—and were in danger, working every night. We ought not to have gone down on our knees cap in hand in the United States. We should have tabled more of the facts and said, "Our immediate difficulties are due to the gigantic war effort of the British nation, the purchasing of materials at inflated prices, and the disposing of our assets before others even entered the war"; and we should have reminded them that when this Government was elected the United States cut off Lend-Lease as soon as they possibly could, which was equivalent to trying to push us under while we were strugging in the water. The United States has never, and does not now, appreciate the gigantic war effort made by the people of this country.

Mr. Dodds-Parker (Banbury)

Yes, they do.

Mr. Ellis Smith

The United States and Britain do not appreciate the gigantic efforts made by the Soviet Union as their contribution to winning the war. Really, the world is in debt to the British and Russian peoples.

I am very concerned about what is going on in Germany for the second time in my life. Hitler said: "If we are defeated we will leave the fatherland in such a state that the victors will fight over our country." In another speech Hitler said: "We will win the war or leave Germany in such a state that Germany will win next time." I want to make it clear beyond all possibility of doubt that so far as the working class in particular are concerned, and so far as the people in general in Britain are concerned, there will be no next time. If anyone doubts what I am saying about what is going on in Germany, here is the evidencè. It is admitted that one of the greatest authorities on developments in Germany prior to the war was William Shirer who wrote the book "Berlin Diary." He has recently written another book, "End of a Berlin Diary," in which he states that the danger is that the Nazis will profit by the political battle between the United States and the Soviet Union; that is the growing cloud which he sees in the place where the horizon should be. On 25th June, 1947, the former Under-Secretary of the United States, Dean Acheson, said: We are about to embark on a policy of rewarding our enemies and punishing our friends. Unless we insist on German economic and industrial disarmament the Germans, with modern technique, could be ready for another war by 1955. That is what I am afraid of; that, supported by finance from other quarters.

I want to say, quite frankly, that along with the people I belong to and live with, I feel increasingly uneasy about the international situation. I do not accept the inevitability of war. Man is sickened by war; man is ready to be organised against the mass murder which modern war means. The people of this country have led the world in the struggle for a higher life, security, social justice, free speech, the right to vote and the right to organise. The task now imposed upon all real men and real women is to use those democratic achievements in order to prevent the drift towards international suicide. Prior to 1914, during war all those at home were safe. In the 1914–18 war we used to pass through London and cross the Channel knowing what the boys were going through, but knowing also that our relatives at home were all safe, and that life was going on; all those at home were comparatively safe in their beds, except workers in munition centres. In the 1939–45 war, in our country—and I emphasise that it is increasingly becoming our country—those at home were no longer safe. People in other parts of the world were safe, and becoming richer at the same time, but in our country night after night our fellow countrymen were subjected to bombardment.

In war—if one is ever allowed again—this country is now the most vulnerable in the world, for atomic bombs can be directed in V/'s and V/'s, which are now being built to travel 6,000 miles. In any future war 12 bombs dropped on Britain would be the finish of every one of us, together with our industrial capacity. War is idiotic criminality; modern war is modern madness. Mankind is now faced with the greatest challenge to real manhood and real womanhood.

Mr. Dodds-Parker

Do the 12 bombs include the Minister of Health?

Mr. Ellis Smith

I have known the hon. Member for many years, and I have a great respect for him, but he does not do justice to his personality by asking a question like that. I am prepared to discuss anything with him afterwards, but do not let us be drawn into that kind of thing now. I do not mind being asked questions on what I am saying, but not on a side issue like that.

The problem is not one of years hence. The problem is right here. Atomic warfare, bacteriological warfare and cosmic ray warfare have now all been perfected in every leading country of the world. This means that science is either to be used for the mass murder of the people of the world—whom we love, for, whether their skins be black, white or yellow, they all belong to somebody, and they are all thought well of by some mother and father—or for man's benefit by the application of science to the human frame and the elimination of unnecessary suffering. If man allows another war each city in our country will become another Ypres or another Passchendaele.

Professor Oliphant is one of the greatest authorities in the world on this subject. He is a man with whom I am proud to be friendly. He is a man who has done his duty and is continuing to do his duty, but he is a man who dreads the consequences of that duty. This is what he says: We have now reached the stage of one city, one bomb. The atomic bomb, weight for weight, is about ten million times as effective as the most powerful explosive we have today. In the last war we had to use tens of thousands of people to provide aircraft and airfields and trained crews to bomb Berlin; next time, one aircraft will do the job. The only possible navy of the future is one that will operate under the sea. Thousands of men are continuing with jobs which give them their livelihood, but they are feeling increasingly uneasy and sickened because they want to build to preserve life instead of to destroy it.

The military, the multi-millionaires and the monopolists are now the people wielding powerful influence behind the scenes in the United States. It is these people who changed the Roosevelt policy; it is these people who hated that real American gentleman of modern times. They have used the radio and the Press since 1945 to carry out a terrific barrage against the country which bled itself white in its war effort. It is these people who drove out Mr. Byrnes and had him replaced by General Marshall. It is these people who recently prevented President Truman from carrying out his friendship movement. These people are the allies of world reaction. They have their darlings in several countries and political parties, and they will soon have another as a result of the Presidential election. It was my privilege to meet Mr. Wendel Wilkie in this House when he visited this country during the war. I can only regret that he was such a young man when he died.

From September, 1945, to May, 1946, military circles in the United States were talking increasingly about the need for a war with Russia. The military people were gathering influence, and they insisted upon generals being appointed to every Embassy and to any other vacancies that occurred in American diplomatic centres throughout the world.

Mr. Baxter

What is the name of the general who was appointed to the American Embassy in this country?

Mr. Ellis Smith

That is, to all vacancies except those in Britain. We had that very fine gentleman, John Winant. They could not remove him very well. I am not asking Members to accept my word. Let them read "The Economist" where they will see it all outlined. It was on 24th March, 1946, that John O'Neill, science editor of the "New York Herald Tribune," warned the American people of the danger of war with Russia. It was on 18th March, 1946, that the brothers, Joseph and Stuart Alsop, who were very close to all the leading American military men, said in their paper: Some generals are worried by the fact that the American Constitution virtually requires this country to accept a surprise attack before girding itself for war. Here is the golden key which provides us with an understanding of how we have reached our present position. The "New York Post," on 12th March, 1946, wrote this: Admiral Leahy, President Roosevelt's Ambassador to Vichy, was a firm partisan of Marshal Petain, and is a declared enemy of all the progressive movements of Europe which he labelled Bolshevism pure and simple. On 11th March, 1946, Malcolm Hobbs, O.N.A. correspondent, reported from Washington: The ascendancy of the military to a position where it virtually controls American foreign policy is becoming an established fact. On 29th March, Bert Andrews reported in the "Tribune" that Byrnes was about to be moved, and that so long as President Roosevelt held the reins of command the Big Three unity was assured. On 16th December the Moscow Conference was opened, and on 19th December the "New York Times" reported on its front page that Winston Churchill would soon arrive in America to spend a vacation in Florida. He arrived in the United States on 14th January, 1946, and there he met President Truman. Mr. Byrnes and Mr. Baruch went down to Florida to see the "British vacationer." He spent hours and hours discussing the international situation with them. President Truman travelled with the Leader of the Opposition for almost 24 hours on the train, and he then sat by his side at Westminster College, Fulton, Missouri, to hear the "new Crusader" suggest an Anglo-American fraternal association.

I say without any hesitation that this man, the Leader of the Opposition, is more responsible for the worsening of the international situation than any man in the world. Here is further evidence of what I am saying. The "Manchester Guardian" today states: The Truman doctrine was conceived the day he sat at Fulton, Missouri, in the immense shadow of Churchill. There is a slight inaccuracy about that. All those who have been associated with the right hon. Gentleman for many years know that he is a great fighter for what he stands for, and that he is not a shadow wherever he is. Just as he has fought for what he thinks right and has fought for reaction, so those who are younger, born of a movement which reflects the aspirations of the common people, have a great responsibility to fight to save the people from the mass murder which would result from another war. The Leader of the Opposition is now the equivalent of an international incendiary and has more responsibility for this tension than any other man.

Mr. Michael Astor (Surrey, Eastern)

Drivel.

Mr. Smith

I do not mind the hon. Member saying that. As a matter of fact, I prefer a man to tell me to my face what he thinks rather than to tell someone else. This applies to any hon. Member. I should be glad to discuss these matters in any public hall, as I have so much confidence in what I am saying.

The latest provocative speeches of the Leader of the Opposition will arouse further suspicion throughout the world. He is constantly fanning the flames which could start another war. He no longer speaks for Britain and the Government ought to have made it clear to the world long before now that the speech he made at Llandudno is not the outlook of the British people. The speech of the Leader of the Opposition last Thursday was the most irresponsible of the many irresponsible speeches he has recently made. The key is to be found in the last few pages of that very fine book, "The Gathering Storm." I am not making capital out of this, because I am the first to give all the credit due to him for the part he played in the war. He said something like this, "After all I have done, the British electorate turned me out." He and his rich American friends throughout the world thought after the General Election in this country that all the world was going Left and he started, first at Fulton and then at Zurich, with reactionaries of the United States, to rally world reaction against the people of the world.

Last Thursday, at that Box, the right hon. Gentleman delivered a speech in which he insulted one part of the Commonwealth after another, and then used words in regard to hon. Members of this House which he ought never to have used. He was talking about the need for a Secret Session, and he then said: I would not be deterred from this expedient by the fear that there may be elements in this House who feel towards Great Britain no sense of comradeship or brotherhood."—[OFFICIAL REPORT, Thursday, 28th October, 1948; Vol. 457, c. 260.]

Hon. Members

Hear, hear.

Mr. Ellis Smith

Some hon. Members accept that, do they?

Mr. Astor

And the hon. Member must accept it.

Mr. Ellis Smith

The reply is that during the war we had many Secret Sessions——

Mr. Astor

In a different House of Commons.

Mr. Ellis Smith

Yes, and that is why we are getting the results now. I hope we shall have another and a different Government after the next Election— [HON. MEMBERS: "Hear, hear]—and I have sufficient confidence to say that it will be a Labour Government with more drive than there has been in the past. During the war we had many Secret Sessions and not one word leaked out. Our Parliamentary Labour Party had no Captain Ramsay. It would be very interesting to know what names there were in his book.

On 15th November, 1945, the President of the United States and the Prime Ministers of Britain and Canada made a statement in which they said: We are aware that the only complete protection for the civilised world from the destructive use of scientific knowledge lies in the prevention of war. Every nation will realise more urgently than before the overwhelming need to banish the scourge of war from the world. It was stated by Professor Oppenheimer that 40 million people could now be killed in one night by one attack with atom bombs. Our country would be completely devastated by a few modern bombs and this island would be uninhabitable for 25 years.

Mr. Baxter

We have heard that before.

Mr. Ellis Smith

And it will be repeated until the people of this country not only change this Parliament at the General Election, but clear out a few more who do not reflect the feelings of the people. War is not like an earthquake, but the result of man's failure to solve the economic problem, his refusal to cooperate with his fellow men throughout the world and his increasing expenditure on armaments and modern research. All this is increasing international tension. My generation saw the loss of many of our best boys. Thousands of them lay all over the world, lads as good as me.

Mr. Astor

Better.

Mr. Ellis Smith

Better, if the hon. Member likes to think that.

Mr. Astor

I am only going on the hon. Member's speech this afternoon.

Mr. Ellis Smith

Yes, the hon. Member is entitled to his opinion and I am entitled to leave it to the people outside. I am entitled to say that there were thousands as good as many of us and many better than we are. When we came home we threw in our lot with the Brotherhood Movement, the League of Nations Union, the Labour Party and the Co-operative Movement, playing our part to prevent a similar catastrophe ever occurring again. Other people used the Press and other instruments of propaganda, and the result was that we drifted and drifted until we found ourselves in 1934 in a situation in which all that was best in life was challenged. In 1939 we had to face up to it and we threw all our energy into winning World War II.

Now that we have passed through two world wars people have the audacity to talk of another world war occurring. I have no hesitation in saying that the time has arrived when this movement of ours should say that Britain's foreign policy must be Britain's. We want to be friends with the people of the whole world, not with one part of the world, but the whole world, whether their skins be different from ours or not. I remember those great characters, Bob Smillie, Herbert Smith, Arthur Henderson, Fred Bramley and George Lansbury. Those were the people who built up this great movement and laid the basis on which we should build. In my view the British people ought to be taking the initiative through the Government and saying to the world that the time has arrived when this drift should be stopped; we are not taking one side or the other but appealing to the world to use science for the purposes of benefiting mankind instead of murdering mankind.

5.39 p.m.

Professor Savory (Queen's University of Belfast)

May I be allowed, Mr. Bowles, on the first occasion I have the honour of speaking under your Chairmanship, to say how delighted I was that you were appointed because I have observed with so much pleasure your conduct in the Chair and I have greatly admired your immense knowledge of procedure and of the Rules of this House.

I very much regret that I am not able to reply to the very eloquent speech of the hon. Member for Stoke (Mr. Ellis Smith), but, unfortunately, I can make only one speech. Last Wednesday the hon. Member for Fermanagh and Tyrone (Mr. Mulvey) made a very bitter attack on Northern Ireland. I did not intend to take part in this Debate at all, but at a meeting of the Ulster Unionist Party I was asked by my colleagues to act as spokesman because they felt some reply was necessary. I greatly admire the sincerity of the hon. Member for Fermanagh and Tyrone and always try to respect honest convictions. After having heard his speech and the speech he made last June, I regret that he and his colleague deprived us of the pleasure of their company during ten whole years. They were elected in 1935 and they did not take their seats until 1945, ten years later. I myself was the first to stretch out to them the right hand of fellowship.

It will, however, be understood that we also have our principles, and I am compelled as deputed by my colleagues to reply to the speech of the hon. Member for Tyrone and Fermanagh. In his speech on Wednesday he occupied 32 minutes of the time of the House and last June he occupied 35 minutes. I was sorry that I was not able to reply to him on that occasion, but it was a Friday and the Debate came very quickly to an end. Consequently I was unable to catch Mr. Speaker's eye. I regret that the hon. Member for Tyrone and Fermanagh is not here tonight. That is not our fault. He was here on Thursday, and I did my utmost that evening to catch the Speaker's eye. I am sorry he is not here, but that will make me all the more careful not to misrepresent him in any way whatsoever.

During his very long speech the hon. Member went into a number of details. I have here the complete reply to every one of those charges, but it is impossible for me with my eye on the clock and with the short time at my disposal to reply to those arguments. Most of those points are matters which concern exclusively the Government and Parliament of Northern Ireland. The hon. Member for Tyrone and Fermanagh has very eloquent colleagues in the House of Commons in Belfast, and he must entrust his arguments to them and ask them to put his case. Being obliged, therefore, to limit myself very strictly I will try to confine myself in my few remarks to the points which concern only the Imperial Parliament.

The hon. Member for Tyrone and Fermanagh said this in his plea that Ulster should be incorporated in Southern Ireland: Partition was forced upon the country without an Irish vote being cast for it in this House. That is perfectly true. The reason was that in 1920 all the Ulster Members preferred infinitely to maintain the Act of Union of 1800. That was perfectly satisfactory for them, and that was what they had been striving for through the Ulster movement. As a means of compromise, it being pointed out to them that it was in the interest of peace, they accepted the Act of 1920, which set up two Parliaments, one in Belfast for Northern Ireland and one in Dublin for Southern Ireland. It was done solely at the request of His Majesty's Government with the hope of bringing about peace in Ireland.

If I might for one second strike just a personal note, I should like to say that I am almost the only surviving connecting link between North and South, because I was appointed for life by the Lord Lieutenant of Ireland to be Commissioner of Intermediate Education for Ireland. I had to go every month to Dublin. There I met very distinguished citizens—the very eminent Provost of Trinity College, Dublin, the extraordinarily able Lord Chief Justice, and a man of great eminence, the Archbishop of Dublin. It was a pleasure to me to meet these gentlemen and to come into contact with them. I always tried to promote mutual understanding and conciliation between North and South.

The hon. Member for Tyrone and Fermanagh now comes forward and says that we must be placed under a Dublin Parliament and objects very strongly to the Act of 1920 which set up those two Parliaments. I would remind him that the Act of 1920 provided for a Council of Ireland. That Council of Ireland was to consist of 20 members elected by the Parliament of Northern Ireland and 20 members elected by the Parliament of the South. They had under their control this Council, which in itself controlled such common interests as railways, fisheries, contagious diseases of animals and so forth. That would have been a most valuable connecting link between North and South. The Act empowered these two Parliaments to vote for union and to come together. Let me remind the hon. Member for Tyrone and Fermanagh that while the Parliament of Northern Ireland nominated its 20 members, 13 from the House of Commons and seven from the Senate, and made those nominations on the very day after the Parliament of Northern Ireland had been inaugurated by His Majesty the King, the Parliament of the South boycotted the arrangement and refused to nominate its half of the Council. Therefore, if the valuable link, to which I personally attached enormous importance, never came into existence it was not the fault of Northern Ireland.

The hon. Gentleman goes on to say: Successive Governments"— including the present Labour Government— during all these years have supported every effort to maintain the British stranglehold over a portion of Irish territory. … If conditions existed which forced the Government of Great Britain to annex Brittany in France it could not be expected that the French people would remain indifferent to that gross act; or if France dominated England and annexed six of the Southern British counties, what would be the reaction of the people of Great Britain to that injustice? I deprecate that extravagant language, because when the hon. Gentleman talks about the British stranglehold over a portion of Irish territory he surely forgets that if British troops are there it is because the Government of Northern Ireland, which is supported by an overwhelming majority of the people of Northern Ireland which have returned the Government election after election ever since the year 1921, welcomes them there. When he talks about a British stranglehold I must tell him that these troops are very often our own beloved Ulster regiments. Even if they were not they are our soldiers just as much as they are soldiers of England, Scotland or Wales. They are our Army and they receive a welcome from us. We are delighted that they should be with us and we always do everything we can to make them as happy as possible. We look upon them, in fact, as brothers.

I must be very brief. I must apologise to the House if I pass rapidly from one point to another, but I want to confine myself to the essential arguments put forward by the hon. Gentleman. He says of Tyrone and Fermanagh: Tyrone and Fermanagh, two Nationalist counties, should never have been included in the area known as Northern Ireland. … If a plebiscite were held in the four counties of Tyrone, Fermanagh, Armagh and Down, there would be a majority in favour of the counties being included in Southern Ireland."—[OFFICIAL REPORT, 27th October, 1948; Vol. 457, c. 210, 211, 214, 215.] I do not know where the hon. Gentleman gets his figures. I have taken immense trouble to go through the votes of those counties at the General Election and at the recent by-elections in Down and Armagh, and my figures show that in the four counties taken as a whole there is an overwhelming Unionist majority of at least 15,000.

The hon. Gentleman says that Tyrone and Fermanagh, two Nationalist counties, should never have been included in the area known as Northern Ireland. Admittedly, there is a Nationalist majority in those two counties taken together, of about 8,000. Otherwise, we should not have had the pleasure of welcoming here the hon. Member for Fermanagh and Tyrone and his colleague. That is obvious. When he says that those counties should have been included in Southern Ireland, surely he has forgotten the Boundary Commission.

Under the Agreement of 1921 between Great Britain and the Free State, the so-called Irish Treaty, it was laid down that a Boundary Commission should be set up. The Government of Southern Ireland did everything they could to force that Commission to come into being. Northern Ireland, satisfied with the Act of 1920 and with the boundaries which that Act had given to them, looked upon this proposal by Mr. Lloyd George as a breach of faith and refused to nominate a representative for Northern Ireland on the Boundary Commission. A special Act of the Imperial Parliament was required to enable the British Government to nominate a representative for Ulster. Very well. We then had these three gentlemen. One was a very eminent educationist, and the Minister of Education, a great professor and Irish scholar whom I knew and respected, Professor John McNeill. He was the representative of Southern Ireland. The gentleman whom the British Government nominated to represent Ulster was Mr. J. R. Fisher. The British Government called in, as chairman, an absolutely impartial South African judge, the very eminent Mr. Justice Feetham. They were the three Boundary Commissioners.

What was their duty? It was as laid down in Article 12 to determine, in accordance with the wishes of the inhabitants, so far as may be compatible with economic and geographic conditions, the boundaries between Northern Ireland and the rest of Ireland, That Boundary Commission sat on the spot for several months. They went along the whole of the Border. They visited the disputed territories. As a result, they came to a unanimous vote and to a unanimous report. Had that report been published, it would, ipso facto, have become the law of the land. What happened? Unfortunately, on 7th November, 1925, the now defunct "Morning Post," by a deplorable leakage, published a map showing what purported to be the boundaries which had been adopted by the Commission.

The result was electric. What did the Boundary Commission propose? So far from transferring the counties of Tyrone and Fermanagh to Southern Ireland, as the hon. Gentleman insists should be the case, they proposed to transfer a part of East Donegal from the Irish Free State to Northern Ireland. They proposed also minor modifications of the border. When this map, which was thought to be correct, reached Dublin, Mr. Cosgrave was in a state of panic. He immediately recalled his representative on the Boundary Commission and forced him to resign his post as Minister of Education. He applied to London to prevent the report of the Boundary Commission from being published. He went to London and there he met the British Government.

Mr. McAdam (Salford, North)

The Tory Government of 1925.

Professor Savory

Yes, it was the Government of 1925.

Mr. McAdam

A Tory Government.

Professor Savory

What does that matter? It was Mr. Ramsay MacDonald who insisted upon appointing the extra Boundary Commissioner. It was in 1925. [Interruption.] I hope that the hon. Gentleman will let me continue and will not take up my precious time. There is no doubt about this interview between Mr. Cosgrave and the British Government. The British Government called over to London Sir James Craig, who was afterwards Lord Craigavon. A most important Tripartite Agreement was made. It was signed by the Prime Minister of England and the Chancellor of the Exchequer on behalf of the British Government, by Mr. Cosgrave and Kevin O'Higgins on behalf of Southern Ireland and by Sir James Craig and Sir Charles Blackmore on behalf of Northern Ireland.

The principal clause of that agreement was Clause 1, which recognised all the existing boundaries of Northern Ireland and was a confirmation of the allocation to Northern Ireland of the six counties, plus the county boroughs of Belfast and Londonderry. The second clause I will also describe. It was important that Mr. Cosgrave should take something with him when going back to Dublin which he could show to his people. The British Government, by an act of unparalleled generosity, agreed to wipe out Article 5 of the Treaty of 1921 under which the Southern Irish Government had undertaken to pay their fair share of the National Debt and of war pensions, subject to any set-off that there might be on the part of Ireland, and subject to arbitration if the parties could not come to agreement. The Prime Minister of Great Britain declared in the House of Commons that the Treasury estimated that the liability of Southern Ireland was £155 million sterling. Mr. Cosgrave admitted that that liability, terrific for a small country, prevented him from launching successfully a loan either in London or in New York. The whole of that immense debt and liability was wiped out by the superb generosity of the British Government.

That tripartite agreement was approved in December, 1925, unanimously, by the Parliament here and by the Parliament of Northern Ireland and—do let me insist upon this—by the Dail by a majority of 55 votes to 14 on the Third Reading. The Parliament of Southern Ireland by this vote, by an overwhelming majority accepted that tripartite agreement under which they recognised, permanently and for all time I contend, the existing boundary of Northern Ireland, including the provision that the six counties and two county boroughs should be part and parcel of the Constitution and Government of Northern Ireland.

Here I come to a point to which I attach very great importance. I must ask for the indulgence of the House because this may be the only chance which I shall have to put this before the House before I lose my seat at the General Election.

Mrs. Leah Manning (Epping)

Find another.

Professor Savory

I should be delighted to find another if the hon. Lady could help me. The point to which I am coming is that the Treaty of 1921 was a most solemn agreement. It was an obligation contracted between the Government of Great Britain and Southern Ireland. In recommending its acceptance to this House Mr. Lloyd George used these words: There has been complete acceptance of allegiance to the British Crown, and acceptance of membership in the Empire and acceptance of common citizenship."—[OFFICIAL REPORT, 14th December, 1921; Vol. 149, c. 33.] That was the statement of Mr. Lloyd George when he introduced the so-called "Treaty" to this House. Many people in the Smoking Room and elsewhere have put to me the question: "What about the Statute of Westminster?" In the Debate on the Second Reading of the Statute of Westminster Bill the Solicitor-General, summing up, said: What is going to bind the Irish Free State to maintain the Treaty is the sacred and solemn obligations involved in the Treaty … I assert that His Majesty's Government have no intention of condoning or excusing or permitting the repudiation or a breach of the Treaty."—[OFFICIAL REPORT, 20th November, 1921; Vol. 259, c. 1251.] When the Second Reading was going through, Mr. Cosgrave, who was then the President of the Irish Government, wrote to the Prime Minister these words: I need scarcely impress upon you that the maintenance of the happy relations which now exist between our two countries is absolutely dependent on the continued acceptance by each of us of the good faith of the other … We have reiterated time and again that the Treaty is an agreement which can only be altered by consent. It was as a result of that letter from Mr. Cosgrave that this House refused to insert an Amendment exempting the Treaty of 1921 from the Statute of Westminster.

But the Statute of Westminster says in its Preamble—this is the key of the whole Statute of Westminster: The Crown is the symbol of the free association of the members of the British Commonwealth of Nations. When Mr. de Valera came into power in 1932 and introduced a Bill to abolish the Oath of Allegiance to His Majesty, a very distinguished Labour Minister, being then Secretary of State for the Dominions, wrote to Mr. de Valera on 9th April, 1932: His Majesty's Government in the United Kingdom adhere absolutely to the view stated in my despatch of 23rd March that the Oath is an integral part of the Treaty settlement. The question of the legality of amendments to the Treaty came before the Judicial Committee of the Privy Council. It was on the attempt to abolish the right of appeal to the Privy Council. Under Clause 2 of the Statute of Westminster, the Judicial Committee of the Privy Council decided that legally, technically, the Irish Free State had the right to make this amendment but—I call the attention of this House to this most important phrase; it is the unanimous verdict of the Judicial Committee of the Privy Council: It would be out of place to criticise the legislation enacted by the Irish Free State Legislature, but the Board desire to add that they were expressing no opinion on any contractual obligation under which, regard being had to the terms of the Treaty, the Irish Free State lay. Therefore the contractual obligation of the Treaty has been reserved. I would ask hon. Members to make this vital distinction, the distinction between the repeal of an Act of Parliament and the repudiation of a Treaty. In accordance with this decision of the Privy Council, the Treaty still remains. The Treaty is as valid as ever it was and it is a contractual obligation between the Government of Great Britain and the Irish Free State. It still maintains its full validity. That was why I asked the Prime Minister this afternoon if he had referred the matter to the legal advisers of the Crown.

The right hon. Gentleman the Member for Woodford (Mr. Churchill) was one of those who promoted and signed the Treaty of 1921. He also signed the Tripartite Agreement of 1925 to which I have referred. However, on 1st May, 1935—nearly four years after the passing of the Statute of Westminster—the right hon. Gentleman the Member for Woodford wrote these important words: We have suffered many disappointments and deceits about the Irish Treaty, and the shameful manner"— The words are those of the right hon. Gentleman— in which it has been broken and repudiated by Mr. de Valera has lowered the standards of good faith upon which the interests of small peoples depend. I represent a number of constituents in Southern Ireland—my former pupils, doctors, ministers, priests—and even though they live in Southern Ireland, as they are my constituents I have a right to speak for them. Since the proposal of Mr. Costello to abolish the External Relations Act, I have been inundated with letters from the Loyalists of Southern Ireland. I shall not inflict on the House more than this one, which is from a very eminent resident in Dublin, a most distinguished graduate: We are wondering what the reaction of Costello and company will be to the Commonwealth's plain warning. Will these fanatics risk everything for the pleasure of crushing the Irish minority? I hope you and other historically minded Members of Parliament will consider our rights, and that depriving us of British citizenship is to rob us of the most precious of our rights. Mr. McBride, the Minister for External Affairs, said in a document distributed to every Member of Parliament by the High Commissioner of Eire: The Crown and outward forms that belong to British constitutional history are merely reminders of an unhappy past that we want to bury. They have no realities for us and only serve as irritants. For the Minister of External Affairs of Eire, the Crown is an "irritant." In view of that language, how can it ever be proposed to force us, who are devoted admirers of the Crown and the British constitution, into a union with an Irish Republic which talks, as Mr. de Valera has talked many a time, about a foreign king?

I cannot tell the House with what satisfaction we heard from our Prime Minister that most important and vital sentence which he pronounced on Thursday. We are extremely grateful to him for it. Nothing could have been more honourable and nothing could have been fairer when he said: No change should be made in the constitutional status of North Ireland without Northern Ireland's free agreement."—[OFFICIAL REPORT, 28th October, 1948; Vol 457, c. 239.] Hon. Members will allow a university Member to say in these magnificent Latin words to the Prime Minister: Rem acu tetigisti.

6.10 p.m.

Mr. J. L. Williams (Glasgow, Kelvingrove)

I listened attentively to the eloquent speech of the hon. Member for the Queen's University of Belfast (Professor Savory), as I had listened to the speech of the hon. Member for Fermanagh and Tyrone (Mr. Mulvey) to which he was replying. However, I do not suppose the hon. Member will expect me to enter into this controversy, being a Member for a Scottish constituency—and a Welshman at that. I wish to get nearer to the economic Debate which preceded the speech of the hon. Member for Queen's University, and I can only wish that Northerners and Southerners in Ireland will soon attain a higher measure of common understanding. Despite all the difficulties envisaged by the hon. Member, I believe that a united Ireland is coming.

I am concerned about a fairly small sector of the economic field which is, however, of some economic significance to a large number of people in this country, and certainly it is to the people concerned. In the Gracious Speech I read with interest that a measure will be passed to provide for reviewing the rents of shared rooms, and of houses and flats let for the first time since the war. I only wish in this connection that the field had been extended to bring in other sections. I regret that in the Gracious Speech there is no suggestion of an amendment of the law governing the tenure of business premises in Scotland, a matter which has been mentioned in this House on many occasions. May I remind the House of the situation?

About two years ago a large number of cases of hardship in this connection were brought to the notice of this House, and in March of last year a Committee of Inquiry was appointed by the late Secretary of State for Scotland, Mr. Westwood, to investigate the position in which tenants of shops were placed at the termination of their tenancies, and to consider and advise on the matter. In the Report of that Committee, issued last November, we read: At present the evidence discloses no grievance which is both widespread and substantial, though some cases of hardship have been brought to our notice. Therefore, no immediate legislation was recommended, but the Committee thought the development of the situation might require to be watched carefully, and they made certain suggestions in the event of legislation being considered necessary.

Soon after that report came out—the report now is best known as the Taylor Report—the problem became much more acute. Buy-or-quit notices were received by a large number of shop tenants, especially in the large towns, and cases of hardship were many. Early this year the situation had become so serious that some of us pressed the Government to bring in new legislation to give more protection to these business tenants whose livelihood was being threatened in this manner. As the end of the Session drew nearer and no change of the law was in view, some of us asked for a standstill order until new legislation could be introduced.

However, on the eve of the Easter Recess, the Secretary of State announced that he could use special powers under Defence Regulation 51 to requisition properties, and might do so in certain cases unless the notice to the shopkeeper was withdrawn. These powers were used, and used to the advantage of the tenant in a number of cases, but the powers are inadequate to meet the situation. Many shopkeepers are again under buy-or-quit notices, and I suggest that when this happens, as I find it happening today with a large block of shops and houses in my constituency, seven months before the end of the term, it is not unreasonable to say that we are faced this time with probably an even greater volume of hardship than we faced before. Most of these tenants are told to buy or quit; some of them just quit.

By way of illustration may I remind the House briefly of two or three forms in which this hardship is inflicted? First, there are large blocks of shop and house property which are sold to big investment concerns to resell to the tenants if they pay the prices. But if not, well, the house tenant is protected by law; the shop tenant is not, and if he will not pay the price he must quit. That is why I suggested earlier that it would have been desirable to have the law governing the tenancy of business premises brought somewhere nearer the law governing dwelling houses. Secondly, there are smaller blocks where the trader is told to purchase not only his own shop but house property as well. It may be that the shopkeeper has not got the money, or he may have no desire to buy house property which he cannot use him self. In any case, very often the price is prohibitive. Thirdly, there are ramshackle buildings where the owner seeks to unload decayed property on a shop tenant.

Sir William Darling (Edinburgh, South)

In Glasgow?

Mr. Williams

The trader is forced to buy because his goodwill value is at stake. I know of a case in my constituency which is rather more specific than Glasgow, which the hon. Member for South Edinburgh (Sir W. Darling) suggests, where the tenant has been asked to pay £300 for a small shop considered to be worth less than £100, but as his goodwill value is much larger than £300, the owner is likely to collect that amount. Then there are blocks of business property where more offices than shops are involved. Here again the tenants are served with buy-or-quit notices with all the uncertainty that it involves, and causes widespread repercussions upon the economic and social life of the community.

Most of those under the threat to quit are small shopkeepers, one of the largest groups of self-employed citizens who have survived the growth of our economic system, the small people and the small man that once received the close attention of the distinguished gentleman at the head of the Beaverbrook Press. Nowadays, however, these small men are not championed in this fashion. The fountain of salt water in the "Daily Express" has run dry as far as this category of small men is concerned. A large proportion of them are newsagents and tobacconists; their number easily comes first. Then there is a wide assortment, including bakers, butchers, chemists, opticians, dairymen, drysalters, cobblers, hairdressers, painters, publicans, and so on, all forming a very long queue of people who, in the main, are of quite modest means, waiting anxiously for a greater security of tenure from this Parliament.

I know a disabled ex-Service man of the 1914–18 war in my constituency who has spent the last 25 years in building up a newsagent's business. He is now told to quit or buy at a given figure, which is both excessive and beyond his means. I know another ex-Service man, of the last war, who three years ago bought a drapery business for £2,000. He is now told that he must get out or pay £1,000 for his premises. By any standard the price is too high, but negotiations are not entertained. He has the choice of finding £1,000 to pay for the shop or of losing most of the £2,000 invested in the business.

The method introduced last March to deal with shop tenure cases has been criticised severely in some quarters. Indeed, it has been dismissed as useless. I do not share that view, nor do I think it is necessary to do so in order fully to establish the case for new legislation. The present method, however, certainly is inadequate, and should not be regarded as more than temporary. For one reason, only certain types of businesses can hope to qualify for requisitioning. The important factor of hardship does not count at all. A newsagent or hairdresser who has put his life's savings into his business cannot normally avail himself of this provision. I will mention here the case of a hairdresser, again in my own Division. Last May an application was made for requisitioning by the Secretary of State but the right hon. Gentleman—whose difficulties I appreciate fully—was not able to agree to the requisitioning. The hairdresser had to walk out, but only last week I was informed that the shop is still empty. This aspect of the problem is one which requires earnest consideration.

The use of Defence Regulations in this field does not give the tenants concerned the same degree of confidence as would new legislation. Let us take, for example, the case of a shopkeeper conducting a business which may be regarded as an essential service, such as the sale of food. He will feel that, in the event of a threat of eviction, he has a fair chance of having his premises requisitioned; but he is afraid that, before long, the owner will announce that the premises, which he is unable to buy, have been bought by somebody else who is prepared to conduct the same type of business, perform the same essential service and meet the same consumers' needs; consequently, he can visualise the new owner taking court action and his being evicted after all. All these are different aspects of the shop tenure problem.

In my view, we should go back to some of the suggestions made in the Taylor Report. For example, if the landlord wishes to sell his property on the termination of tenancy he should be required to give the tenant the first option to purchase. That, of course, is being done now in some cases, but the Taylor Report goes further and recommends that such property should be sold at a price that is fixed independently, which is very important. There is the suggestion of the use of valuers for this purpose, and the recommendation that where agreement between landlord and tenant is not reached the matter should be settled by summary proceedings, which are both cheap and expeditious. In putting my suggestions to the Secretary of State for Scotland I must point out that, if the weeks are allowed to go by, as was the case last winter, without his grappling with the situation, we shall be saying again, as we said in the early months of last winter, that time is running out. We do not want to find ourselves, in March, 1949, in the same position as we faced in March, 1948, when we were unable to obtain new legislation.

I am glad to find towards the end of the Gracious Speech some mention about other Measures being brought forward if time permits. I hope, therefore, that the problem will yet be considered, that there is something under the counter for the shopkeeper and that something worth while will be done before the end of the Session.

6.28 p.m.

Mr. A. R. W. Low (Blackpool, North)

I am afraid that I am not competent to argue with the hon. Member for Kelvingrove (Mr. J. L. Williams) on the intricacies of Scottish law or, indeed, of Scottish economy, about which he spoke. The Secretary of State for Scotland, therefore, need not expect any trouble from me.

Before coming to the main points which I want to put to the Chancellor of the Exchequer, even though they may concern other members of the Government more particularly, I must refer to the speech of the hon. Member for Stoke (Mr. Ellis Smith). He made an unwarrantable attack upon my right hon. Friend the Leader of the Opposition. He stated it as his opinion—and anybody is entitled to his opinion—that my right hon. Friend does not represent Britain, and gave as an example of a speech which did not represent Britain, the one which my right hon. Friend delivered at Llandudno. I shall leave the matter here merely by saying I think that more people would agree with my right hon. Friend than with the hon. Gentleman.

The value of the attack upon my right hon. Friend was lessened, perhaps, by the fact that the hon. Member also attacked all right hon. Gentlemen sitting opposite. The hon. Gentleman clearly was in an attacking mood and there were no exceptions. There was, however, one particular point——

Mr. Ellis Smith

Can the hon. Member give me an example of such an attack?

Mr. Low

I am afraid I did not catch what the hon. Member said. There was, however, one particular point which I wanted to take up with him, because I disagree with him fundamentally upon it. Running through the whole of his speech was the theme that there is nothing worse than war. I am sure that all of us know enough to hate the very idea of another war, but most of us think there are things even worse than war itself. That is where I particularly disagree with the theme of the hon. Gentleman's speech.

As I come to the later part of my speech I shall mention defence proposals, as the Chancellor mentioned them this afternoon. If I do so, it is not because I want war, but because I think that strong defence is the best way to avoid war and, at the same time, preserve justice and freedom in peacetime. I am sure that the hon. Member for Stoke will credit us who think that way, with as much sincerity as he wishes to be credited with himself. The hon. Member attacked right hon. Gentlemen on the Government Front Bench, and seemed to suggest that they were not sticking sufficiently to Labour principles. I hope that that was not the reason for the extraordinary lapse, reported in the Press, which was made by the Chancellor of the Exchequer when he brought up, once again, that horrible phrase "liquidating the British Empire." It seemed to me that in the comments which the right hon. and learned Gentleman made at that meeting the other day he was trying to justify some words which he used in 1935, I think it was, and which some of us hoped he had left behind.

Now I want to come to the main points I have to put before the House. I want to talk about the economic aspects of the defence proposals put forward by the Government, and of any other defence measures that may have to be put forward. As the Chancellor rightly said today, no economic proposals for this country, for Western Europe, for the North Atlantic area or, indeed, the world, can be considered apart from the "cold war" situation of today. They must be considered against that background. Any plans made in the early part of this year must be reviewed in the light of the Government's decision to introduce a measure of rearmament, and otherwise to strengthen our defence Forces. The Chancellor mentioned the damaging effect of any further substantial increase in defence needs. I cannot see what events can take place in peacetime which would justify a further increase; I cannot see that things can get worse in peacetime than they are today. If the right hon. and learned Gentleman is worrying about the effect of defence measures on his economic plans for peacetime, he must concern himself with the proposals which are necessary to deal with the present.

It is with the proposals which are necessary in the present situation that I wish particularly to deal. It is extraordinary that in Cmd. Paper 7545, which is the Government's plan for their part in European co-operation, no mention is made of the need to take further defence measures. No mention has been made by the Chancellor today of the need which Western Union countries must have found to increase their defence measures. That must have a grave effect on our economy, on their economy and, what is perhaps as important, upon the aid which the United States is called upon to render. Even if it does not have an effect on the quantity of that aid, it is likely to have an effect on the allocation inside the broad, general plan for that aid.

I want to ask the Chancellor this straight question: Is he satisfied that there is a real European Recovery Plan to meet present circumstances—circumstances different from those facing the 16 countries when they first met?

Sir S. Cripps

indicated assent.

Mr. Low

The Chancellor has nodded, and I will accept that, but I wish he would tell us more about it, or, if he cannot tell us about it today, would try to do so in the near future. The trouble which faces the right hon. and learned Gentleman may be this: That the Government have been entirely unable to make up their minds as to exactly what is to be done. The last time defence was discussed—in the recent short Session—the hon. Member for East Coventry (Mr. Crossman), with whom I found myself in general agreement, attacked the Government for wasting men, money and materials as a result of their indecision in this important field. We may make that attack, but we cannot tell whether we are right or wrong because the Government will not say what they are doing. If they say we are damaging the country's credit in the eyes of the world, we are only doing it because of their own obstinacy in refusing to tell us what they are doing. They have had many months in which to consider the proposals that are necessary. Difficult though it may be to draw a balance between the demands of a sound economy, on the one hand, which I fully realise, and the demands of essential defence measures on the other hand, they have had long enough to strike some kind of balance.

There are some points I want to put, about the economic effect of two aspects of defence proposals, which have a direct impact upon our economy. They are, therefore, matters with which the Chancellor is indirectly concerned, even though he may say that this is not the best occasion on which to mention them. I shall group my remarks under two heads—first, manpower and, second, supply. I am sure there will be complete agreement with me among Members in all parts of the House when I say that it must he the aim of the Government to ensure that there shall be no waste of men or materials in any defence proposals that are put forward.

First, I will take the National Servicemen. Are the Government satisfied that the present scheme for National Service will not mean a gross waste of manpower? Will it not waste the time of the Regular members of the Navy, Army and Air Force? May it not waste the time of a great many National Servicemen who are called up for a year, 18 months or two years, to learn a new trade when, by reason of the key nature of the job which they have chosen for themselves, they are not, even in the event of war, likely to be called up to serve with the Armed Forces? Further, is it not clear that there is constantly a great waste of the time of commanders and staffs in that as this scheme is working at present, it has to be readjusted at every change of the international wind? If that is clear, surely it is time that some new scheme was put into force.

I can only put forward the following as some form of constructive proposal. Have the Government considered the possibility of a much shorter term of National Service for everyone to make them fit for Civil Defence, and a longer period of service for those who are selected by voluntary choice, or if necessary by ballot, or perhaps as a result of their employment, as likely to have to serve in the Forces in the unhappy event of another war? In that way those in key positions in industry will learn all there is to be learned about their job in Civil Defence, and those who in the unhappy event of war are likely to be required in the Regular Forces will have enough time to learn all they require to know about the particular arm or branch of the Service in which they are likely to be called.

Passing from National Service men to the Regulars, here again I believe that the Government are not getting the best out of the Armed Forces because they have not adjusted the pay code. That is a matter which directly concerns the Chancellor of the Exchequer and no one else, because I believe that he thinks that we cannot increase the pay of the men in the Forces without causing the complete upset of our present system for holding personal wages and incomes. I appreciate that argument, but I ask whether it is not possible, whilst retaining the minimum pay for each rank of the Armed Forces, to increase the maximum? Is it not possible to pay the skilled man, tradesman and non-tradesman, more while still paying the unskilled man the same as at present?

In that way the attractiveness of the Armed Forces to young men who for example are on the point of choosing whether they will go into a well paid and technical job in civilian life or into what is at the moment not so well paid but just as technical and just as exciting a job in the Armed Forces, will be increased. I also put to the Chancellor the point that if he is unable to raise the pay he will deprive the Services of their greatest chance of recruiting more men as Regular volunteers, and Regular volunteers are at the same time the cheapest and most efficient members of the defence Forces.

I now wish to deal with a further point concerning man-power, namely, the Auxiliaries. We know that at the moment all parties, all responsible men in the country, are backing the Government's plan to stimulate recruiting for the Auxiliary Forces. These volunteers are the cheapest way open to the Government of making the defences of the country strong. Many points, which are too detailed for me to mention now, are frequently made which may be obstructing the Government's plan. I will mention just two. First, there is the position of the nationalised industries, over which the Chancellor can exert considerable influence. I believe that they are not coming forward and encouraging their workmen to join up simply because most of those workmen are key men in industry, and they think it mad to encourage key men in industry, who will never go to war to waste—for that is what it is from their point of view—two weeks out of their valuable year's work. They may be right, but they have in their industries a number of men who will not be key men. Will they not encourage those men to join up, whilst still, if they wish, discouraging the others? I put that to the Government as a possible proposal which might meet their difficulties. It is, in fact, what many private employers are doing today.

The other point in regard to auxiliary recruiting which the Government really must put right is that they must speak with one voice, and if possible the Secretary of State for War must say today what he said yesterday, and must still try to say the same thing tomorrow. The trouble about the Secretary of State for War is that no one believe his prophecies and when he says that there will be no war it is really doing no good to himself or to recruiting and is doing very little good to the Government.

My last point about manpower is the most serious. I believe that the organisation of Service manpower is based upon a plan for the Armed Forces which was made in 1946, the first premise, the basic assumption of which was that there would be no war in the next 10 years. That may have been a fair assumption to make then—assumptions have to be made—but that premise, that basic assumption, has failed and the whole plan requires looking into once again. There has been too much patchwork and too little real consideration.

I pass from manpower to supply. Although we have discussed manpower frequently, and we have tried to make our contributions to see that manpower is not misused or wasted, we have had little discussion here of the difficult problem of preparing in peace time for the full equipment of the defence Forces in the event of war. We discuss and approve a most expensive National Service scheme, the main purpose of which is to provide reserve manpower, but we do not seem to inquire of the Government whether they have arranged for the necessary equipment, and whether their methods of production for the Armed Forces, planned over a series of years, are not wasteful and uneconomic. It is obvious that the difficulties are enormous. They must be tremendous at any time, but they are particularly great at a time when we in this country, and indeed all countries, want to turn our efforts towards increasing our standard of life, when we want to turn all our efforts to peaceful and not warlike production.

I sympathise with the difficulties which the Government seem to have experienced in announcing their decisions for the alteration of their production plans, or indeed of their plans at all. But there is one rather odd fact about this. The one man in the Government who is responsible for this most difficult task is the Minister of Supply. The Prime Minister has said that the primary duty of the Minister of Supply is the furnishing of supplies and the carrying out of research, design and development for the Fighting Services. I ask the Chancellor and the Prime Minister whether they are satisfied that the present Minister of Supply is giving his full attention to this most difficult and important task. How can any man who has, during the last year, and particularly during the last few months, had so much to do in the drafting of an iron and steel nationalisation Measure, be able at the same time to look after the country's armaments and rearmament? How can the same man face up to the enormous difficulties of the primary task of the Ministry of Supply and also face up to the political controversy of this narrow, spiteful iron and steel nationalisation Measure? That is my question, and I should like the Government to give a forthright answer that he is such a man that he can do it; because I am rather doubtful.

Mr. Daines (West Ham, North) rose

Mr. Low

I shall not give way. I wanted the Government to answer and I believe that the hon. Gentleman is not yet in the Government.

I wish to ask one other question. It is about this so-called increase in the rate of production of aircraft, tanks and certain other things. An increase over what? An increase over the low level to which our production of those items had sunk following the economic cuts of 1947, or an increase over the level laid down in the original plan for the defence forces? Which is it? It is important we should know. If it is only an increase from the low level following the cuts of 1947 back to the 1946 basis, that really cannot be satisfactory, because that 1946 plan was made on the assumption, to which I have already referred, of at least a ten-year peace. We should have an answer to this question.

Is not the Minister of Supply the man responsible for co-ordinating the supply and production of armaments and design and research between this country and the British Commonwealth and this country and the countries of the Western Union? If he is, how can he find time to do that as well as to prepare his Second Reading speech on the Iron and Steel Bill?

Mr. Daines

Would the hon. Gentleman allow me? Surely there is an analogy. The Leader of the Opposition has time to write a book, to lead the Opposition and to paint pictures.

Mr. Low

I am very glad to see that the hon. Gentleman has such a high regard for and confidence in the Minister of Supply. If the Minister can do it so much the better. But the curious thing is that he gives us no sign that he does do it. That is the point.

I believe that the defence proposals, the reason for which we all abhor, will have more effect on the economic plans of the Chancellor of the Exchequer than he has yet let us know. It is clear from the terms of his White Paper and his speech that things are pretty tight—if I may put it that way—on his present plans. There is no reserve of manpower and no reserve in the production for which he is estimating. Yet he is prepared to tell the people of this country that though they may not get much improvement in their standard of life, they can look forward to some easement. I ask him, when he next addresses the country, to do all he can to put that right.

6.54 p.m.

Mr. Henry Nicholls (Stratford)

The Gracious Speech, and the Debate which follows, by custom appears to allow hon. Members to speak on almost any subject under the sun, subject, of course, to your Ruling, Mr. Speaker, and subject, of course, to their catching your eye. It is natural in the circumstances for hon. Members to speak about those things nearest their hearts. Some speak on trade, some on food, some on finance and some on disagreements in Ireland, or fictional amities emanating from The Hague. For my part, I prefer to speak on some of the things uppermost in the minds of my constituents.

Let me give a welcome to the proposals for at least some reforms in the conditions for nurses. I think the Measure is long overdue and will remove a blot on the national escutcheon that had to await the advent of a Labour Government before it was put right.

There is a reference in the Speech to housing and planning. I do not think it is generally understood that in planning houses we sometimes produce some derelict houses as a by-product of our planning. If I may give further enlightenment on that point, I would remind the House that when we decide to plan any built-up area, we automatically limit the life of houses within that area. If the owners apply, as they may have to do, for certain repairs to be done to those houses, we give them a limited licence, say for five years. It automatically follows that owners are loath to invest money in property which has a limited life and must of necessity go in a few years.

Unfortunately, these are not the only houses we have which are derelict or semi-derelict. It is not a small problem; I would not worry the House with a problem which was not of some significance. In West Ham alone there are, approximately, 2,000 derelict or semi-derelict houses out of a total of about 35,000 to 36,000 houses. In almost every other industrial area there are houses that are derelict or semi-derelict. One type of owner of such property cannot afford to repair the house, especially under present conditions. The second type of owner could probably afford it, but does not see why he should invest more money in houses that have a limited life. The third type of owner has no intention of spending money, no matter how badly repairs are needed. In all three cases the tenant suffers.

In West Ham, where there are some 2,000 derelict houses, it means that over 10,000 people in that one district are living in conditions which are appalling. Roofs leak like sieves, there are primitive sanitary arrangements and the tenants are without a decent place in which to prepare their food. I think the House must take some notice of that problem, especially because, as a byproduct of effective planning, there will always be such houses. I suggest, so far as the first class of owner is concerned, that we should see to it that, in regard to such expenditure as may be approved for necessary repairs, the whole or part of the money so spent should be added to the compensation which would otherwise be payable. That would at least ensure that those who would repair the houses could do so.

With regard to the third class of owner, those who just will not have their property repaired, it is time that this House did something to strengthen the law in this respect. There are people who specialise in derelict or semi-derelict houses. Frequently they are people who have some difficulty with English letters, but they do not appear to have difficulty with English figures. Without any question the tenants are squeezed and, unfortunately, they have nowhere else to go. Sanitary notices are served and are accepted with much the same phlegm as an ordinary individual accepts a 'bus ticket. The people do not put in an appearance at court and I think it is time that the law provided that such people should be hauled into court. Where owners or agents decline to carry out the decision of the court, instead of being subjected to a nominal fine, or a fine which increases in amount, they should be sent to prison. Unless something is done along those lines, I am afraid that the local authorities will not be able effectively to tackle the problem.

A further item concerns the inequity of industrial derating. In common with other industrial areas, we in West Ham have to meet the deficiency which previously was met by rates on industry. Hon. Members will recall that this de-rating of industrial hereditaments was intended as a subsidy to industry in order that industry might compete more effectively in the open markets of the world. The relief granted is permanent. The Government's compensation—that is to say, the block grants which, in a measure, provided for compensation—had a waning effect. It was rather like applying a vanishing cream to a wound. The cream disappeared but the wound did not. That is what has happened to the salve applied to local authorities' finances. Today we have lost something like £225,000 as a result of that. The block grant no longer recompenses us for what we lost.

I ask hon. Members to realise the extent to which the docks are a liability on local authorities. They involve problems in regard to infectious diseases. The main roads are used by heavy traffic and they must be kept in a good state of repair and well lighted. Concentration of industry causes an added fire risk which must be met by the maintenance of an expensive fire force. These are added complications which are imposed on local authorities by the presence of industries. I think it is time that the Government set right an injustice and did something to restore industrial rating or, alternatively, saw that the local authorities were recompensed in a proper manner. We might have expected to lose when the previous Government were in power, but this Government owe something to the industrial areas. That is where the Government's original loyalities come from, and in case of trouble, that is where present loyalties will lie. Because of that, I suggest that the Government might well give some attention to these problems.

7.3 p.m.

Mr. Emrys Hughes (South Ayrshire)

I am sorry that the Chancellor of the Exchequer has had to leave us because I think that what I have to say would have been good for his soul. I had the opportunity of being in New York at the same time as the Chancellor and I followed his speeches and remarks in New York most carefully. I was most interested in the questions that were asked him by the American Pressmen. This is one of the things which the Chancellor said: The steps already taken by Britain towards rearmament, doubling the production of jet fighters, slowing down the demobilisation rate, reorganising the Civil Defence services, increasing the reserve of the three Armed Forces, augmenting the Territorial Army by 100,000, refitting navy and reserve ships and building new ships and increasing the rate of production of armed vehicles, small arms ammunition and anti-aircraft ammunition will not interfere with recovery or with E.R.P. When the direct, important and vital question was put as to how this would affect Britain's recovery programme, he replied that it would not affect the recovery programme. He added: Any greater rearmament projects, however, would naturally alter the whole economic picture. That is the vital consideration. I do not see how the Government are to square their programme of economic reconstruction with the new rearmament programme that has been outlined. It is impossible. The Government are involved in a hopeless contradiction. They must make up their minds what they intend to do. They must decide whether they are to follow the lead of the Leader of the Opposition or whether they are to be true to their Socialism and stand by their programme of social reconstruction, and let rearmament go by the board. I deplore the Chancellor's repetition of the now old familiar tale about the Cominform. Anti-Communism is not enough. There is a great danger that the Labour movement in this country is being side-tracked into a purely anti-Communist movement. I was very sorry today to hear the Chancellor, in view of his previous record, talk in that way.

The Labour movement in this country must have something fundamentally different from the totalitarian Communism of the U.S.S.R. or the dollar policy of the United States of America. I heard the speech made by the right hon. Gentleman the Member for Woodford (Mr. Churchill) at Llandudno relayed in a Broadway cinema. I regretted very much that the name of a beautiful little town in Wales should be associated with such political tripe and tosh. It was rather significant that the two films shown in this cinema were "Fury at Furnace Creek" followed by "Mr. Churchill at the British Tory Conference." It seemed as if they were the films; one seemed to follow from the other.

Now, while the Government and their spokesmen attack polemically the Leader of the Opposition, in foreign policy they have taken over the anti-Russian policy of the right hon. Gentleman the Member for Woodford. As one who is not a Communist, I regret very much to see the present development in international affairs. I regret the lack of positive constructive international initiative demonstrated at the Paris Conference. I regret that the Government did not seek to counter Mr. Vishinsky's proposals by proposals of their own outlining an international policy for the reconstruction of Europe and the world on lines which would give moral leadership to Europe and America and result in an easing of the present tension.

I still believe that if we made the right approach to Russia and talked in terms of economic international reconstruction and not in terms of atom bombs, with all the old wrangling squabbles there have been at Paris, we would go the right way towards getting an international response. I do not know whether hon. Members have noticed that recently Stalin outlined a programme for a 15 years' reconstruction of the Union of Soviet Socialist Republics. That is absolutely incompatible with preparations for a new war. I should like to see the Government talk in terms of a big, broad plan for international reconstruction on the lines urged by Sir John Boyd Orr. I was privileged at Washington to talk to the successor of Sir John, a farmer from Oregon. The new Director-General of F.A.O. stressed the point that the most important consideration in the world today was to plan the reconstruction of the agriculture of the whole world on new and fundamentally different lines. While they pay lip service to F.A.O. and Sir John Boyd Orr in much the same way as the leaders of the Christian religion do to its Founder, I believe that the Government are not giving the attention to the plans of F.A.O. that they ought to do. The Government look upon it too much as a statistics-collecting organisation, and do not give the full weight of their power to the plans which the F.A.O. is outlining for rebuilding the agriculture and industries of the world.

Hon. Members on both sides of the House have spoken about the failure of the recruiting campaign. Of course, recruiting is a flop, but why? It is because we are too near the last war. The people of this country are not unintelligent, and they do not need to be taught their public duty by Members of Parliament. They know what a ridiculous spectacle it is to see some of the Cabinet Ministers of a Labour Government on a recruiting platform. I do not intend to go on a recruiting platform, and I wish I had the opportunity to go into the Army in order to recruit people there for useful service at home. I should get more recruits in a month than the Secretary of State for War and the Minister of Defence get in a year.

In standing for this re-armament programme, the Government are not expressing the real wish and Socialist urge of the people who sent them here. The Government should do something different—not carry on the traditions of the right hon. Gentleman the Member for Woodford but go boldly ahead on a policy of social and international reconstruction. They are doing it in some way, and, wherever they are true to their ideals, as in the broad plans of nationalisation, they will succeed, but they will fail if they follow the old imperialist catchwords and go on with their re-armament programme and their plans for another war.

There is much talk of Marxist-Leninism. Fancy the Minister of Food going on a recruiting platform. Fancy the right hon. Gentleman saying "Roll up, boys, in order to fight Marxist-Leninism." How could he do that after all the books he has written expounding Marxist-Leninism in recent years. I appeal to the Labour Government to turn their backs on the re-armament pro- gramme, to bring back the people who are being shifted away from the housing schemes and sent into the Army, so that they can get on with the housing programme and get back into constructive work. If the Government do that, and if they show that they are honest in international politics and go forward to the Soviet Government saying, "Here is our alternative programme—a world plan for the reconstruction of agriculture and industry throughout the world," even if they fail, they will have been true to the traditions of their movement, and, I believe, will rally public opinion in America and Europe to their side.

7.13 p.m.

Mr. David Eccles (Chippenham)

The hon. Member for South Ayrshire (Mr. Emrys Hughes), when talking about the Chancellor's Press conference in the United States, gave us one more example of how the right hon. and learned Gentleman's talent as a salesman has improved. I suppose it is due to the practice which the Chancellor has had in persuading American capitalists to lend money to a Socialist Government, but, every time the right hon. and learned Gentleman addresses this House now, his sales talk is better and better. I really believe that, if he got a job at the Motor Show, he could persuade the hon. Member for Orpington (Sir W. Smithers) to buy a car with a Communist under the bonnet.

I am very glad that the Chancellor has succeeded in putting himself—because he is, after all, the Government—across to our friends in the United States. Failure would have been bad for Britain, and it would have been no good for the Conservative Party. On this side of the House, we have often said that we neither need nor desire any outside help to get rid of Socialism. We also welcome the improvement in the national finances since the disastrous days of 1947. A year ago, we were going on the rocks at such a rate that no conceivable Marshall Aid could have saved us.

This autumn, if I understand him correctly, the Chancellor claims that the dollars we are to receive in the first period of Marshall Aid will be enough to plug the hole in our overseas balance of payments and to prevent a further drain of gold. I hope he is right, but plugging with unearned dollars the hole that exists today is not good enough. Marshall Aid will come to an end, and the Government have still to satisfy us on this side of the House that this gap is going to be progressively narrowed by our own efforts so that we can look forward to the time when it is completely closed. The Government also have to satisfy us that even the programmes of expenditure to which the hon. Member for South Ayrshire referred can be fulfilled without another bout of inflation and without further loss of gold. When Ministers, in their speeches in the country, refer to closing the gap, they always talk as if the one and only road to solvency is increased production. That is not true. A country, like an individual, returns to solvency when it makes both ends meet. If it can do this out of increased production, well and good, but if it cannot, then it can and it must reduce expenditure and square the account that way.

What are our prospects? The Chancellor himself, in his broadcast the other night, said that British production is now lagging. This is obvious, from Table 24 in the Monthly Digest of Statistics, from which anyone can see, making allowance for the seasonal decline during the holidays, that the curve of Britain's production has flattened out and is even showing signs of turning downhill. The upswing due to demobilisation and reconversion has spent itself, and from now onwards we must look to increased output per man and not to an increased number of men at work. The future is forecast for us in Command Paper 7545—the White Paper on European Co-operation. This document confirms what every business man already knows—that further increases in production are going to be small and rare during the next 12 months. That being so, we can agree with the right hon. and learned Gentleman that there is no immediate prospect of closing the gap which separates us from solvency through an increase in the national income.

What about the other side of the balance sheet—the known expenditures and the new commitments, the further expansion in exports to America, the unrequited help to Europe, the vital capital programme at home and abroad, and the cost of rearmament, which tolls like a funeral bell? All these commitments are going to bite deep into the resources upon which we had counted for the internal recovery of Britain.

I ask the House not to underestimate these formidable totals of first priorities. These expenditures cannot be achieved unless somewhere, somehow, important domestic projects are abandoned or postponed. We all know what will happen if the Government try to superimpose these new commitments upon the groggy structure of their Socialist experiment. Inflation will reappear, prices will rise, gold will melt away again, and the instability of a year ago will return sevenfold to breed strife and injustice in our society. In short, the Communists will be put in a position to win a big victory in Britain in the cold war about which the Chancellor spoke.

We can be sure that the Soviets understand the technique of this kind of war. They intend to make us over-reach ourselves, and they have some prospects of success. My party supports the Government in their policy of meeting the Communist challenge on every front, but we do not believe that the Government have counted the cost and made provision for that cost in their economic and financial policies. Warfare of this kind may be bloodless but, none the less, it is a staggering charge to lay upon an economy stretched and strained as ours already is. We cannot hope to win these battles unless we are willing to suffer heavy casualties. The casualties of this kind of war are the reconstruction plans that have to be given up. Have the Government the courage to put this to the people? All that one reads in the King's Speech shows that they have run away from this issue, and that they are not in earnest in fighting the cold war.

In spite of all that the Chancellor said, I have no conviction that Ministers know how the cold war ought to be fought. Do they think it is a total war? That is the important question. The Russians fight in that way. They throw in everything they have got. But what are the Socialists' tactics? For example, has a general mobilisation of resources, which we accept for a hot war, any parallel in a cold war? The Secretary of State for War asks my right hon. and hon. Friends to support him in his recruiting campaign for the Army. Whatever the hon. Member for South Ayrshire does, we support the Minister willingly, because he and we recognise that preparations for a hot war require national unity. But the cold war is fought on quite a different principle. Here there is no attempt to mobilise a national effort to meet the Communist menace. To listen to many Socialist speeches in the constituencies, and to read them in the local Press, one would think that the Tories to the right of hon. Members opposite were worse enemies than the Communists to their left. This reveals a very interesting contrast in our approach to the two kinds of war, and it is by no means easy to say whether we are right or wrong to go on as we are.

For what it is worth, I will give the House my own opinion. Hon. Members will agree that, as yet, "cold" warfare is an art without experts. We have in this House many hon. and gallant Gentlemen who are acknowledged authorities in "hot" war. But who in the democracies really knows anything about this new kind of aggression that is pursued without shooting, but with the full weight of the totalitarian resources of the enemy? The British diplomat is untrained to this business. The Board of Trade, as I will show later, know as little about "cold" warfare as the Chancellor does about cold mutton.

What is the relation between these two kinds of war? Surely, it must be true that, so long as the Russians have not got the atom bomb, and provided the Western democracies, with American backing, weld their military strength into an instrument of common defence, the chances that the Russians will start a shooting war are far less than that they will win the "cold" war. In other words, we and our friends know how to keep an official peace. If we do not grudge the expense and effort, we can do it. But we may lose the "cold" war through ignorance and mismanagement, and then all our military preparations will be of no value. If that is so, it follows that the "cold" war must claim every resource of mind and material that is not required to provide adequate forces to deter the Russians from shooting. These adequate armed forces are a first charge, but it is a matter of life and death that they should be provided as cheaply as possible.

In the Debate last Thursday many speakers, and again today my hon. Friend the Member for North Blackpool (Mr. Low), talked about our military expenditure, and how extravagant it is. I would only add that every family in the country in which there are sons of military age knows that we are not getting value for the money spent upon the Fighting Services. I wonder whether the public realise that this disgraceful waste might cost us severe reverses in the "cold" war? The Government might spend so much in trying to keep the enemy out of the front door that he had an easy task worming his way in at the back.

Last Thursday, the Minister of Defence made a general remark in this sense, but I have not yet heard that easily frightened statesman, or any of his colleagues, proclaim the obvious truth that overspending by the Government in any direction can he just as disastrous as overspending upon armaments. Today almost all European Governments are overspending on swollen bureaucracies, social welfare, public works of doubtful nature, and subsidies of all kinds. The irony is that most of these expenditures are looked upon as essential counter-attractions to the Communist menace. Taken one by one, a good case in terms of social justice can be made for almost all of them, but taken together, they add up to an intolerable proportion of the income of the people, and by leading to bankruptcy they expose one democracy after another to defeat at the hands of the Communists and their allies.

What is the record of the Government in this matter of expenditure? One example will suffice. The Chancellor of the Exchequer, in a recent speech to the bankers admitted that the rate of voluntary savings is so low that he is forced to use a Budget surplus to gather in the money which people will not of their own free will set aside. Lord Catto took up the right hon. and learned Gentleman's argument and pointed out that the taxes are now so high that not even a Scotsman can save. Here is evidence that the Government are overspending for the sake of their domestic programme and to a degree that is risking a defeat in the cold war.

I place the greatest importance upon thrift in this connection. The maintenance of saving is essential to independence, responsibility and confidence in our country. When a man has to give up saving because the taxes take so much out of his pocket, it is as though he were required to work such long hours that he had no energy left to cultivate his garden—and it is not only his garden that suffers. It is the man's character and the whole of his family life which will be most certainly injured. His value as a combatant in the cold war is cheapened, and the stifling of personal savings by high taxes has a similar cancerous effect upon the tissues of a free society. The Government's first duty in this critical Session is to show the people what are the limits of their national income and that they cannot remain free and at the same time ruin their estate by public extravagance.

I want to turn to a different front in this cold war where the Government are making a series of silly and expensive blunders. That is in their trade with Russia. On what terms ought the democracies to do business with a country which has fully mobilised its resources to overthrow their way of life? The answer depends upon whether a cold war is considered to be a total war or not. If it is a total war, then trade must be treated as a weapon and used only to gain a position or to relieve a weak section in the line. To trade with Russia as though we were the best of friends and as though the Berlin blockade did not exist is idiotic. I am fairly hardened to humiliations which our country has suffered in the last three years, but my stomach turns at the thought of the grim satisfaction in Moscow when the Soviet action in stopping us from feeding Berlin is met by the British request for coarse grains to feed ourselves, and when we offer to pay for these Russian products with British plant, machinery, railway equipment and strategic raw materials from the sterling area, all of which build up the potential strength of our enemy in the cold war.

Hon. Members may recall the shipments of oil, copper and scrap iron made by the Americans to Japan in the months before Pearl Harbour. His Majesty's Government knew something about trade as a weapon in those days. Time and again we warned the Americans that this was only a dangerous piece of appeasement. It would be very interesting to know what the Chancellor of the Duchy of Lancaster, who was then Minister of Economic Warfare, has to say about the solicitous wooing of Mr. Mikoyan in Moscow by the President of the Board of Trade.

But now we have forgotten these lessons. The President of the Board of Trade is allowed to play at peace when the enemy is at our throat. It is childish to trade on the assumption that we have excellent relations with Russia, when, in fact, nothing but the atom bomb stands between us and a shooting war. It is absurd to argue that Europe's recovery needs a considerable East-West trade as though that proved the wisdom of doing the trade while the cold war rages. Personally I do not believe that this East-West trade is so essential, provided that the overseas possessions of the democracies are energetically developed, but even if it were essential it does not alter the fact that we completely misunderstand the nature of cold warfare if we think that trade can in any way counteract, soften or dissipate the hostility of the Communists to a free nation.

Curiously enough, this delusion about trade agreements finds its place in the very earliest chapter of Anglo-Russian relations. The House will remember that our inimitable sovereign, Queen Elizabeth, filled up all her letters to the Marshal Stalin of the day, Ivan the Terrible, with commercial details, requests for privileges for her merchants and demands that bills should be paid. The Czar thought all that unimportant stuff. He wanted to discuss great abstract questions, such as love and friendship between royal personages, and he gave to the Mr. Frank Roberts of the day, Sir Anthony Jenkinson, a piece of his mind about British preoccupation with the value of trade agreements. So we see that there is nothing new under the sun, and certainly the British delusion that we can change a foreigner's politics by selling him something is very ancient. The ingenuous President of the Board of Trade will have to learn that the methods of the Co-op., under which I understand one can sell a little politics with a pound of tea, have absolutely no place in a cold war against a barricaded dictatorship. I ask the Government to tell the House and the other democracies what is their policy in trading with Russia while the cold war lasts. Why do they do it?

I want to put forward one or two suggestions about the right policy. First of all, we should make it a condition that we do no trade with any country which will not admit our tourists and our newspapers. Surely, the Government must realise that this war is a war of ideas and personal contacts, and it cannot be won by credits and inanimate exports. Perhaps they remember that during the world war, when the Lend-Lease goods arrived at a Russian port from England or from America, there was always a squad of Russian painters there with their brushes ready to daub out the trade marks and marks of origin, and to put in their place, "Made in Soviet Russia." I wonder whether the President of the Board of Trade is so simple that he thinks that that is not happening today. Of course, it is. To trade without a flow of ideas and persons has no effect whatever upon the politics of your opposite number. Secondly, why cannot we use the raw materials of the sterling area to break the Berlin blockade? What is the good of denying ourselves the weapons which we have when the Russians use this kind of tactics the whole time?

The House will see that these are very important questions which must be answered. No doubt we should also ask what sort of machinery of cold war cooperation exists parallel to the military machinery which exists under the Brussels Treaty. There are one or two experts in cold warfare in the West; there is a man like General William Donovan, for instance, and it would be well worth hearing what he has to say. Even the Chancellor of the Duchy, if he has no job to do, could remember some of the things which he did when he was Minister for Economic Warfare.

I will cut my remarks short. There is one other critical issue in the cold war to which I want to refer, and that is the provision of capital goods for raising the standard of life of the native peoples of Asia and Africa. These millions and millions of ill-equipped people are the floating vote in the East-West struggle. If the Lord President were here I would remind him that floating voters must be wooed and cherished. The main instrument which we have is the provision of capital goods in those areas, which must be looked upon as battlefields in the cold war. If the industrial democracies are in earnest—and this applies particularly to America, since she has more capacity to produce—they must set aside large quantities of capital goods for the express purpose of defeating the Communists among these native races.

I have tried to show that fighting this cold war requires many expenditures and sacrifices not previously thought of. It may mean no East-West trade for a time. It may mean giving up capital programmes which we should very much like to have undertaken. Whatever we do in the cold war has to be done after providing large sums for rearmament. Can all this be done without inflation? Is it possible to keep prices steady? Because if we do not succeed in this, the very weapons which we design against the enemy will be turned to our own destruction.

I come to the big question: has the Government the courage to draw up a comprehensive plan of reductions in expenditure which will allow us to play our full part in the cold war without risking inflation? I am certain that they have not that courage and my authority for that statement is the Gracious Speech. In that speech we learned that the Government had irrevocably decided against fighting a cold war as a total war. They prefer to continue with Socialism and to pursue it without regard to the cost in British weakness in the international struggle against Communism.

On the basis of the King's Speech the country cannot give a united lead to Europe or to the native races in Africa and Asia. By the deliberate policy of hon. Gentlemen opposite we are to spend the next year in bitter party warfare. In my view we do not need a Coalition Government to play our full part in the cold war, but we most certainly do need all our traditional common sense. A hundred and fifty years ago Thomas Jefferson said that the common sense of a people is the best army a nation can have. That is certainly true in cold warfare, but our British common sense is outraged by a Measure like the Steel Nationalisation Bill, and the restraint and discipline of our popular army is broken by the Government's overspending and extravagance. Their decision to embark at this time of world crisis upon such unproved and improvident experiments will add a page to our history which those who come after us will hurriedly turn over in sorrow and shame.

7.46 p.m.

The Minister of Food (Mr. Strachey)

The hon. Member for Chippenham (Mr. Eccles) must not resent it if I do not follow him for very long in the speech he has made, but I should like to say one or two words about a rather remarkable passage in his speech on the subject of trade between Russia and Queen Elizabeth. He drew us an interesting historical analogy with the present day and told us how Queen Elizabeth corresponded with Ivan the Terrible, that Queen Elizabeth was all in favour of trade and hard practical business matters of that sort while Ivan the Terrible wanted the correspondence to go on what I took to be ideological matters, such as love. The hon. Member for Chippenham apparently agreed with Ivan the Terrible. I agree with Queen Elizabeth, on the other hand. It is very difficult to find a working relationship with Russia at the moment—we all know that—and I am sure that Queen Elizabeth was on the right track—get down to business; and that is the one relationship, I do believe, which it may be possible to have with Russia today. I am grateful to the hon. Member for reminding us that the present Government is carrying on in this, as in other matters, the Elizabethan tradition.

Mr. Eccles

The Minister made a good shot at history, but he does not know what happened. Queen Elizabeth failed in this matter and commercial relations went badly. Had Queen Elizabeth done what the Czar wanted, she might have got on better. There is no means of influencing the Russians by trade and I challenge the right hon. Gentleman to produce any instance from British history where a trade agreement had made any difference whatever to Russian policy.

Mr. Strachey

The hon. Member is very patronising on the subject of history, but he must remember that some of us know a little of it, too. If he will recollect, the Muscovy Company was duly founded and duly fostered. The Muscovy Company prospered during the whole of the subsequent century and during the 18th century, too, and made very great sums of money for this country. It is a very new view of history that Elizabeth's attempts to trade with Russia were unsuccessful; they were extremely successful and they were undertaken by Queen Elizabeth not to influence Russia but because she and her merchant adventurers thought it was good business. We are not trading with Russia today in some attempt to influence Russian policy. We have not the slightest delusion that we are doing that. We are trading with the Russians for precisely the same good Elizabethan reason; we think it is good business to do so.

This is an extraordinary assumption by the hon. Member that for some reason trade with Russia should strengthen only Russia and not strengthen us—as if we only send commodities to Russia and receive nothing from her in return. Of course it would be very foolish for us, in trade with Russia or any other country, to give more than we receive, but we are very careful not to do that, and as long as we observe these hard-headed business principles I am quite sure that such commercial intercourse between the two countries is very valuable indeed. I think the arguments put before us that, unilaterally, without any question of any international organisation or anything of that sort, this country in effect should apply drastic economic sanctions to another foreign state—the hon. Member actually proposed it—by cutting off all commercial intercourse with Russia, is a most dangerous argument and one with which I could not agree.

Mr. Godfrey Nicholson (Farnham)

Surely the right hon. Gentleman's argument is equally valid in the case of a real war, in trading with the enemy?

Mr. Strachey

I really cannot follow the hon. Member there. He suggests that in the case of a war it would still be dangerous to trade with the enemy. What all these suggestions amount to is, that in the minds of hon. Members opposite we are already at war with Russia. That is not the view of hon. Members on this side of the House, and, therefore, that is why, I repeat, I think the arguments we have heard on that matter are not only grossly unsound historically and commercially, but also extremely dangerous.

However, I rose to make some remarks, for which this Debate on the Gracious Speech affords an opportunity, on the subject of the food situation as it is today, and our prospects for the coming winter. I cannot promise the House a very full survey of the situation. such as is given annually on the occasion of the Estimates, but I want to say one or two words about particular commodities of which there is some definite announcement to be made, or on some point to be made about our prospects, good or bad, in the coming winter. If I do not cover all commodities, it is simply because of the ones of which I do not speak there is nothing particularly new to say on this occasion.

I want to deal first with the group of commodities in which the supply situation is most difficult. The first is meat, which is the main example of a food, the supply of which to this country is still limited essentially by the overall world physical shortage and not by financial limitations. In other words, even if we had all the dollars and other scarce currencies that we could wish—and that is far from being the case—to spend on meat, we should still be unable, I think, appreciably to increase our present importation of meat. The meat just is not there in the world to buy. Does that mean, I may be asked, that the world has suddenly become denuded of its meat supplies? No, that is not the case; and it is not the case because, we must remember, we are importing, even at the present moment, some 90 per cent. of our pre-war imports of meat.

The real shortage which we feel and find in this country comes, not from a deficiency of imports, but from a deficiency of meat which we can produce at home. We are producing only some 60 per cent. of our pre-war level of meat. That, in turn, as the House Well knows, is because we are unable to buy anything like our pre-war quantity of feedingstuffs. However, that position is improving. We are at the moment, it may not be generally realised, consuming three times the amount of rationed feedingstuffs for pigs and poultry which we were consuming at this time last year, and we are, over all, consuming half as much again of rationed feedingstuffs for animals as we were consuming at this time last year. That, of course, has had no appreciable effect as yet on our output of home-grown meat; but it will have, and, in the fullness of time, and by the biological process, it will produce, slowly but surely, increasing supplies of meat. We do attach, therefore, great importance to that. Incidentally, a very appreciable part of these feedingstuffs comes as a result of those commercial relations and our trade with Russia which we were discussing just now.

The effect of this on the animal population, though not on our actual consumption of meat, is beginning to be felt. In June this year the census showed that we had 200,000 more calves being reared than in the previous 12 months, and that 100,000 more breeding sows and gilts were were in existence than in the year before. So the home production of meat is, once again and at last, on the upgrade. But I must warn the House that even if and when—as we shall in due course—we restore home production to 100 per cent. of its pre-war level, and get our imports back by the remaining 10 per cent. which they lack of the pre-war level today—even then we should by no means feel that we had ended the meat shortage, even though we had as much meat as before the war; because today, in spite of our acute meat shortage, we are consuming 75 per cent.—taking imports and home production together—of our pre-war supplies.

So that, as the House can readily see, the full pre-war supplies would afford only a 1s. 4d. ration today, and I do not think we could regard that as the ending of the meat shortage. To end the shortage, to give everybody as much meat as he would like to buy today, we should need something very much more than our pre-war supplies, and that is why we are looking far ahead, not only in home production of meat, but in discussions with the Australian Government, for example, for the long-term increase of our supplies of meat from that particular source.

I should like to pass to the subject of points goods, because I think that there is no shortage—and I am acutely aware of this—that the public are feeling more at the present time than the shortage of particular points goods, the most desirable type of points goods. By that I mean canned meat and canned fish. Of course, the public feel that, the housewife feels that, in that she thinks those points goods are much too highly pointed. They are only high pointed because they are scarce. We do not put the points rate up for the pleasure of it. We do it only because we have to, because the goods are scarce, so that, unless we pointed them very high, they would be whipped off the shelves in the first few days of a new ration period.

So it comes to the question, why this canned fish and canned meat are scarce. They are scarce because a year ago—14 months ago now—as we announced at that time, in August, 1947, we stopped buying them altogether from the United States. As the House will remember, we then stopped buying all foodstuffs from the United States, and thereby saved no less than £12 million worth of dollars a month, which was the rate of purchase of those goods in the United States. I have told the country since then of the extent to which we have been able to find substitutes for that £12 million worth a month of American food, and in a great many cases I think we have been exceptionally successful in finding substitutes. Indeed, I would say that if I had been told we could carry on for a whole year without any purchases of food in America at all with as little hardship as we have carried on during this year, I should have been very relieved indeed a year ago.

Of course, there are United States and Canadian foods for which there is no adequate substitute in the world today; and, above all, there are these two very important points foods of canned fish and canned meat. It is perfectly true that we have not been able to find any really adequate substitutes for those two very desirable points goods. The public are feeling today the effect of that cessation of buying 14 months ago because, naturally, we eked out the stocks of these goods over the past year; but they are now running very low indeed because they have not been replenished for the whole 14 months. We are of course attempting the utmost substitution which we can. In the case of canned fish, we cannot get very much canned salmon from anywhere else in the world, except a little from Russia, as a matter of fact.

But we can get other canned fish or fish from various places. We can get tunny, which we shall be getting next year in appreciable quantities, and, although not as good as salmon, it will be quite acceptable. We got from South Africa canned snoek in appreciable quantities. Hon. Members opposite did us a good service because by making jokes about canned snoek they advertised it extremely well. We have sold it all out in the shops, and we have had to go back to South Africa, I am glad to say, to buy more. It has been found very acceptable by the British public. I agree that none of these canned fish is a complete substitute for United States or Canadian canned salmon, which we should like to have.

What are the prospects of our being able to resume the buying of these, and also canned meat and other very desirable dollar points goods? It is simply a question of the dollar earnings that we can command. I need not remind the House of the position with regard to the Marshall figures, which the Chancellor of the Exchequer has repeated today. All the Marshall Aid that we are receiving is doing—and that is very much indeed—is to fill the gap which yawns between our purchases and our earnings, and to enable us to go on buying at the level which we were buying previously. Therefore, any increase or resumption of buying must depend on increased earnings. I should be the last to suggest that there was no hope of our being able to achieve these increased earnings which will result in our being able to purchase more, and I would remind the House of the words of the recent White Paper, in which the Government said that if we earned more hard currencies in dollars and other foreign exchange generally, we should give preference to increasing our importation of foods to help maintain our standard of nutrition. The words of the White Paper were: If the United Kingdom dollar position improves so that an increase in the dollar import programme becomes possible later in the year, preference will be given to the claims of purchases designed to improve food consumption. That, in itself, even if the improved earnings are realised, does not necessarily mean that we can command the dollars necessary for the particular purchases of canned meat and canned fish, because there are many other important claims for any dollars that we may be able to earn.

I shall tonight be announcing the very modest first fruits of the undoubted improvement in our foreign exchange and earning capacity that has already been made, but so far we must confine any increase of buying to less expensive foods than canned fish and canned meat, and go for things more readily available at more reasonable prices. It is for that reason that I cannot promise the House a quick alleviation in the most desirable points goods situation in respect of the things which the public would most like, which are undoubtedly canned salmon and canned American meat.

We shall be able to get substitutes and increase our imports of other canned fish, including Russian canned salmon, which is a valuable substitute, and any other kind of substitution that we can get, but they are not as good as going back to the valuable importation of tinned salmon from the Western Hemisphere, which we should very much like to see. We do not despair of going back into that market, but it cannot be tomorrow. For that reason, we are extremely anxious to help the hard-pressed points scheme, and certain announcements which I will make in a few minutes are designed for that purpose.

The next commodity in which supply is still very difficult indeed is bacon. The future prospects of bacon are little if at all better than those of meat in general. We have largely to depend on the gradual recovery of home production, and it is recovering because, as I have said, we have made a considerable increase of feedingstuffs to our pigs. We have to work for long-term production for increasing the bacon supply, as we are doing in Queensland, where there is a very large scheme operated by the Overseas Food Corporation for the production of bacon from animals fed of the coarse grainlands of Queensland. For the next year, when neither home production nor long-term schemes can bring us much, we must largely depend on how much we can afford to buy in this case from Canada and, again, on what dollars we can command. We should be able during the coming year to maintain the present ration rate, but I should not like to say more than that.

I should mention one very short-term consideration. In the immediate short-term situation, there is a difficulty over Canadian supplies, not over what we are willing to buy but by a hold up connected with their own marketing conditions, as a result of which they cannot sell us even that quantity which we can afford to buy, and we are in difficulty for the next few weeks over the even arrival of our supplies. I am not in a position to tell the House whether this hold-up need affect the ration, but if it does so it will be only temporary, for one or two weeks, and we shall be able to find some substitute for that bacon. Immediately the situation becomes clear, I shall, of course, inform the House.

Now I turn to the group of commodities in which the supply position today and the supply prospects for this winter give us some grounds for belief that we have an improvement in sight. I take milk first. The position is very considerably better than it was this time last year. Last year, the House will remember, the allowance of milk for non-priority consumers had to be cut down on 24th August from two-and-half pints to two pints. It stayed at the level of two pints over the whole of last winter, for 24 weeks, until 26th March, and, in addition, some of the priority allowance had to be cut, reluctant as we were to do so.

This year, we have not had to come down from the two-and-a-half pints level as we did in August, 1947, and I think that it is safe to say that unless we have abnormally hard and difficult weather for milk production it should be possible to maintain the present two-and-a-half pint level right through the winter. If we are able to do that, it will be an achievement that we have not equalled since 1942, and it will be a great improvement on the year's level of milk distribution. For that, of course, we have to thank three things—we have to thank the better weather; we have to thank the very fine efforts of the farmers and the farm workers; and, last but not least, we have to thank the very fine efforts of the cows!

I turn to eggs. Again, during this winter, we shall be very short of eggs, but I think that it is true to say that there will be a very considerable improvement in that field in the spring; both home and imported supplies promise to be appreciably better in the coming spring than they have been. That is so much in the minds of some producers in this country that they are already talking of the fear of an excess of eggs. Well, I do not think they need have those fears. It is interesting to notice that actually the proportion of imported eggs is dropping, not rising. In 1949 we expect to have 41 per cent. of imported eggs, while in 1948 we had 45 per cent. of imported eggs. Therefore, I think there is no doubt that—as I think every hon. Member here will agree—we shall be able to eat all the eggs imported or from home which are produced.

I notice that my genial friend the Eire Minister of Agriculture, Mr. Dillon, was telling us that he was going to drown us with eggs in the near future. I should very much like to help him to produce every egg he can for this market, because I believe we can easily absorb them. But it might perhaps help to keep a sense of proportion if I say that in the arrangements which we have come to with the Eire Government in this matter the best that either of us can hope for, in the immediate future at any rate, is that they will be able to send us four eggs per head of the population of this country per year. That is not such a torrent of eggs from that source as will overwhelm us, but we do think that that and other markets for the import of eggs are very valuable supplements to the increasing production which we shall have at home.

I think that next spring we shall have a season when eggs will be comparatively plentiful, but that does not mean our problem will be anything like solved. As the House knows, there is a great seasonal problem here; eggs imported in the winter are what we are so much wanting, and it is in Australia and from producers in the Southern Hemisphere that we can best realise that want. Therefore, we are again very happy to have made with Australia a long-term contract for imported eggs which reach us during the winter months, when we are so particularly short.

I turn from that to the supply of fats, which I believe is today, with points food, perhaps the most acutely felt shortage of all. Our supply of fats is doubly important, in itself, and also because if we could only increase it it would enable people to eat more of other foods which are in plentiful supply: the humble chip, for example; there are plenty of them if only we could have the fat to fry them in. It is for those reasons that, as the House perhaps knows, I have always been intensely concerned with our fats supply and have started very extensive projects for the deliberate creation of new sources of supplies of fats, such as the East African groundnuts scheme. It will be during next year, in 1949, that we shall get the first very modest contribution to our fat ration from that scheme; and the fact that that contribution will be coming in has helped us to make the decision which I am just about to announce.

But it must not be thought that the groundnuts scheme in East Africa is the only place where we are making efforts to increase our supplies. We are sometimes accused from the other side of the House of neglecting our existing great base for groundnuts—the West African field. That is far from the case. We have sent 18 locomotives to the Kano railway in Nigeria; they are now running on that railway and the supply of nuts coming down from Kano is steadily increasing. We have done our utmost to increase our supplies of copra from South East Asia and cocoanut supplies generally, and to foster the supply of whale oil and the like. None of these efforts can have a dramatic effect, but all of them begin to increase our supplies a little.

The question which faced us was how to use this quite modest increase which is in our hands, because there are plenty of claimants for it, as can be imagined. One small use which we have made of it is, as the House knows, to allot some extra fats—quite a small tonnage actually; it was all we could afford—to fish friers, because I was so anxious that we should increase our supplies of fish and chips during this autumn and winter. We used the amount of fat which we should have to allow an influx of new fish friers into the trade, because we thought that in this trade what was needed, above all, was an increase, not only of the supplies to existing fish friers but an influx of new competitors into the trade who could at any rate help to get us, not only more fish and chips but a little cheaper fish and chips too.

I am afraid that unfortunately that view was not altogether shared or appreciated by the existing fish friers, and I had the curious experience—and it is not the only one I have had as a simple Socialist—of, to my surprise, finding that those principles of free competition in private trade which are preached to us so assiduously from hon. Members opposite are very differently received in the trade concerned when I attempt to impose—I can only use that word—decontrol, or a measure of it, upon them. As I was saying at Question Time this afternoon, it is, in my view, in those sections of the economy which remain in private hands, and are likely to remain in private hands for a long time—and fish frying is certainly one of them; it would be very low on our priority list, I think—that I do believe in competition; I do believe that there it is the only safeguard which can possibly exist for the public. Well, our existing fish friers thought it would be a futile manoeuvre, because they felt that their own rate of profit and remuneration was so modest that it would hardly tempt newcomers to come in at all. We have not found that to be the case.

Mr. Walter Fletcher (Bury)

In looking at this question of fish frying, has the Minister taken into account the different conditions of fish and chip shops in industrial areas and those in suburban and other areas, because there is a deep variation in those conditions which governs the whole of the wisdom or unwisdom of his present action?

Mr. Strachey

Well, we thought that it should be judged by the new entrants themselves, where they found a suitable place which would be profitable to them, and therefore which showed that there was a need for the new entrant to come in. There have been a great many applications. Most of these applications have proved on examination to fulfil the conditions which we laid down, and nearly all of them are being granted. I am afraid that since 20th September, when this announcement was made, we have had so many applications, and have made so many grants of new licences, that, for the time being at any rate, we cannot go any further, and from today we shall not be able, for the time being, to consider any more applications. When all the present applications have been dealt with we estimate that we shall have injected some 2,000 new fish friers into the trade, -and we cannot help believing that their activities will be healthy; they will produce a healthier trade, and one which will be serving the consumer better.

I now come to points which were raised forcibly by a deputation from the fish frying trade who came to see me. As was mentioned at Question Time this afternoon, they raised with me the case of certain fish friers who, owing to the working of the allocation system and the data of their pre-war supplies, have had the very small supply of under 3 cwt. of fat for an eight-week period. As from 5th December we shall be able to increase the allocation of fat to those small fish friers who receive less than 3 cwt. per eight-week period and bring them all up to the 3 cwt. per eight-week period level.

Mr. Baldwin (Leominster)

Will the Minister consider the issuing of fats to country dwellers who do not get the advantage of these extra fish and chip shops? If the fats are available why not let the country dwellers open up shops?

Mr. Strachey

There are two points there about which I shall say something in a moment. It would be quite wrong to think that all of these 2,000 new fried fish shops will be in urban areas. We have been very careful to encourage applications from, for example, mobile vans operating in rural areas.

Mr. Baldwin

indicated dissent.

Mr. Strachey

I assure the hon. Member that is the case, and I think he will find that there has been a good deal of help there.

Mr. Baldwin

I can tell the right hon. Gentleman, from my experience of the mobile vans in my part of the country, that they attend where there is a big surplus of population.

Mr. Strachey

I am afraid that I must pass on from that. The amount of fat we could give, either to existing fryers or new entrants, was very limited because we were scraping up all the supplies we could command for other uses. When we looked round, we looked at the domestic ration which is the most important thing. In the domestic ration, the overall fats ration, the cooking fats ration, is probably the most important thing, and it is during the winter months that cooking fats are so very badly needed.

Therefore, I am glad to be able to announce that we shall give a temporary increase in the cooking fats ration of from one ounce to two ounces from 5th December next for 16 weeks—that is, to the end of March. That will raise the total of the oils and fats ration from eight ounces to nine ounces for those weeks. I am not for one moment suggesting that it is a large increase, but at any rate it is something which will help us over the winter months. I should not like to mislead the House in any way, or to suggest we can give any guarantee whatever that we shall be able to maintain that nine-ounce ration after the end of next March. I can tell the House very simply why. It is because these additional supplies that we have been able to scrape together just suffice for that increase for the winter weeks to the end of March next. These are supplies from our existing sources within the sterling or soft currency areas.

If we were to extend the nine-ounce ration beyond the end of next March, as far as we can estimate at the present, it would involve increased dollar buying, and we can give no guarantee at this date that we shall command the increased amount of dollars necessary to buy the increased amount of fats, assuming they are available from dollar sources to maintain the ration during next summer. That, surely, is another very striking example of the direct dependence today of the level of our fat ration and food consumption generally on our exports, and upon our exports above all to hard currency areas. I went to the Motor Show last week, as I dare say did many others, and I saw the glossy outlines of those beautiful new cars, Austins, Morrises, Jaguars and the rest, and very beautiful they were, but to my prejudiced eyes they looked like ounces of fat, sides of beef, extra pounds of sugar or extra foodstuffs in one form or another, and that, in a sense, is what they really are, because these exports, like others, are going out to be transmuted as it were into these extra food supplies. Today, it is literally true that exports are food.

I come now to the last commodity with which I want to deal, and that is sugar. The House will have noticed that sugar, and particularly our stocks of sugar, have been the subject of a good deal of comment recently in the Press. I have had to restate, perhaps wearisomely, the reasons why we do not give publicity to the level of our stocks. I can only repeat what I have said so often before, that, not in my opinion but in the opinion of the very experienced and practical businessmen who actually do the buying, to reveal our stock figures would be the greatest dis-service we could do them in their very difficult work. I have had, when definite and specific assertions are made by large—I will not call them responsible—national newspapers that our stocks are at some particular level—700 thousand tons was the one given—which bears no resemblance in fact—to contradict such statements. When I contradicted that statement, I was apparently considered to be extremely irritable. It was in the national interests, however, that these very irresponsible statements should be corrected.

I have also been taken to task by Mr. King of the National Union of Retail Confectioners, who is reported in the "News Chronicle" as having said that I have never contradicted the assertion that our sugar stocks are not 700,000 tons but 30 million tons. It is quite true that I have not contradicted that statement; it did not seem necessary to do so. It is not the question of stocks which is really the relevant question at all. If our stocks had been 700,000 tons, that is only four months' supply—we could have distributed that amount in four months. What matters is not the stock at a particular moment but the income, that is how much you are able to buy. I have repeatedly said that I do not despair for one moment, even though our stocks were nothing like at this fantastic level, of buying a little more sugar, and that if and when we could that we should certainly distribute it. I have gone so far as to forecast an increase in one of the rations, namely, the sweet ration. That is one of the ways in which the increased quantity of sugar might be distributed.

I am glad to be able to tell the House that the extra quantity of sugar has been bought, and that I am in a position to say how we shall use it. It always seems unwise to me to make an announcement on how we propose to allocate a particular commodity before we have actually bought it and it is in hand. It was not until this moment that I was able to make an announcement. We have considered very carefully how best to use this quite limited additional quantity of sugar which it has proved possible to purchase, and to purchase at a considerably more favourable price than would have been possible some time ago.

What we propose to do is this. On 5th December, as an interim measure, we shall increase the sweets ration from three-quarters of a pound to one pound per period. In the new year, we have proposed to the manufacturers that, when they have built up their production and therefore their stocks of the cheaper kinds of sweets, we should de-ration the cheaper kinds of sweets altogether—probably the sweets of under 2s. or under 2s. 4d. a pound. We have not fixed the figure yet, but we can provide the sugar for that purpose. The advantage of such an arrangement would be that it would keep the rationing of the more expensive sweets which use other scarce ingredients, such as fats and cocoa powder that are still very scarce, and make it possible to give children their cheaper sweets unrationed. I have no doubt that during the new year that is what we shall do in one form or another.

Again, on 5th December we shall complete the de-rationing of jam. We shall take all preserves, including marmalade and imported jams, off the ration altogether. The only exception to that is honey, which is now on the ration, which we shall transer to the points scheme. We must do that, otherwise it would be possible for manufacturers to buy honey, quite legitimately for manufacturing purposes. We think it must be preserved for the domestic consumer and put on the points scheme, because honey is the equivalent to sugar for the manufacturers. We do not propose to vary appreciably our existing arrangements for the price control of jam.

Again, on 7th November we shall provide more sugar for certain manufacturing purposes—for biscuits, golden syrup, cakes and flour confectionery. We shall also provide more sugar for the manufacture of certain small but quite important commodities, such as coffee essence, cornflakes, table jellies and the like. The object of the use of this sugar for manufacturing purposes is essentially to give assistance to the hard pressed points scheme. Commodities into which this sugar goes are retailed under the points scheme, so by devoting more sugar for this purpose we can improve the points scheme. We shall retain enough sugar in hand to make some bonus issues, for instance, to provide a bonus issue for jamming in due season and, finally, again on 5th December, we shall increase the domestic sugar ration by two ounces—from eight ounces to 10 ounces.

Mr. T. J. Brooks (Rothwell)

Is my right hon. Friend trying to do anything for the soft drinks industry?

Mr. Strachey

Yes, but it will be very little.

8.32 p.m.

Major Sir Thomas Dugdale (Richmond)

Supporters of the Government seem to be very satisfied with the speech which has just been delivered by the Minister of Food. I will say at once that we on this side welcome the minor increases which the right hon. Gentleman has been able to announce, as taking effect just before Christmas. At the same time, we should like to warn the Government not to allow some of their spokesmen to make statements such as were made when small increases were announced about this time of the year in 1945. By accident, I came across a speech made by the Parliamentary Secretary to the Ministry of Food on 4th December, 1945, in which she said: The extra food at Christmas is just a taste of things to come"—

The Parliamentary Secretary to the Ministry of Food (Dr. Edith Summer-skill):

They have come.

Sir T. Dugdale

Yes, but three years afterwards. The hon. Lady also said at that time: We know where every available scrap of food is, and we are planning ahead so that you may enjoy it as soon as possible. What were the things to come? The cheese ration, for instance, was reduced from three ounces to two ounces in May, 1946, and was further reduced to one and a half ounces in April, 1948. In respect of other commodities it was the same story. Although the number of points was increased in July, 1946, from 24 to 32, it has been assessed that at that time 48 were needed to buy the equivalent of what 20 points would have bought in 1945. So I hope the Minister's announcement tonight will not be the forerunner of reductions in the early part of next year.

Having said that, I would like to refer to the Government White Paper which was issued last week. The Minister quoted from paragraph 22 of that Paper when he said that extra dollars would be spent on food if they were available. I quote from the same paragraph, which says: Food supplies at this level"— that is, the existing level— are perhaps sufficient to make possible a diet that is technically adequate. But it is also dreary, and the dreariness reduces the effectiveness. I entirely endorse that statement about present-day rations. What a record for three years of Socialist government, after the promises that were made in 1945. I have one more quotation from the Election address of the Minister of Transport: Housewives should vote against a further lowering of the standard of living through reduced rations. Housewives had their rations reduced after that.

I want for a moment or two to refer to bread grains. The 300 million dollars which we expect to get to pay for bread grains from Canada will pay for all the wheat which Canada has undertaken to send us under the Anglo-Canadian Wheat Agreement. That is a minimum of 140 million bushels of the 1948–49 crop at two dollars per bushel. I will discuss the question of feedingstuffs later, but I mention milling offals now, because, owing to the conditions of the Agreement, a certain quantity of wheat contracted for under it, is imported in the form of flour. Of the 1947–48 crop, 750,000 tons were delivered as flour, out of a total of 4,300,000 tons. I would like the Minister to consider what has become of the 250,000 tons approximately of offals made from the 500,000 tons of flour, All the 1947–48 wheat crop was paid for at, I think, 155 cents per bushel, so it would appear that we have paid for offals which we have not received. I would like the right hon. Gentleman to bear in mind the great importance of trying to import grain so that we can have the benefit of the offals when we make that grain into flour.

I turn to sugar. I am certain that all Members on this side of the House will wholeheartedly welcome the Minister's announcement about a betterment of the sugar ration in the immediate future. Sugar is one of the most heat-giving foods, and is most important for the well-being of our people. I am, however, a little mystified on two points. First, as to jam-making; will housewives in country districts, who make their own jam, benefit as a result of jam being taken off the ration, by a corresponding increase in the sugar ration?

Mr. Strachey

I do not know what the hon. and gallant Gentleman means by "corresponding." They will have the increase in the domestic ration and a bonus issue for jam-making next summer. The jam-sugar switch lapses when jam is taken off the ration, because there will be nothing to surrender when that happens.

Sir T. Dugdale

I thank the Minister for that answer. They will benefit to that extent. On the broad issue I imagine that this extra ration of sugar has, in fact, come from stocks.

Mr. Strachey

No.

Sir T. Dugdale

From the White Paper it would appear that next year the anticipated E.R.P. payments for 1948–49 will be £6,250,000—that is converted from dollars—if the sugar is purchased from Cuba as compared with an expenditure of about £35 million in 1947–48. How does the Minister propose to make up the balance to maintain even the eight-ounce ration without taking into account the increased ration which he has announced tonight? I expect he hopes for greater supplies from Empire countries, and I hope very much that he will give particular consideration to that point, because I understand that the Sugar Manufacturers' Association in Jamaica are asking the Government to arrange a long-term sugar policy.

The present contract, I believe, ends in 1952 and as recently as 29th October, the assistant manager of the Association was reported to have said—I cannot vouch for this statement—that the Jamaica sugar surplus would be 183,000 tons next year but that they could easily produce 500,000 tons if Britain would only assure them that she would take the lot. I hope the Minister will look into that and find out whether there is any substance in that statement, because that would be a very valuable contribution. I understand that the Mauritius Economic Commission recommended increased production from those islands, and it is possible to effect such an increase. Apart from these small instances, I understand that, even now, we are exporting sugar from this country to the extent of nearly three times as much as we did in 1946. If that is so, in what way is it of benefit to us to export all this sugar? Only one of the 15 countries to which we are exporting sugar is a hard currency country, and I believe that country is Switzerland.

Mr. Strachey

The hon. and gallant Gentleman might like an answer to that question now because it is an important point. We are buying a certain amount of dollar and other hard currency sugar for refining in this country and we are re-exporting it, but we only re-export it against hard currency payments, and whether it goes to a country which is a hard currency country or not, they pay for it, on that particular transaction, in hard currency. Therefore, we do it because it gives us a very substantial dollar or hard currency profit. The refining of this sugar is very like any other part of our export trade. We buy the raw material, process it in this country and re-export it. I am sure the hon. and gallant Gentleman will agree that that is a very valuable process, with which we do not intend to interfere. It is done by private enterprise, but it is none the worse for that.

Sir T. Dugdale

I am glad to have heard the right hon. Gentleman's statement; I have no doubt it will be of great benefit, but I think the matter needed explaining inasmuch as there was a great deal of confusion in the minds of the public as to exactly what was going on.

I turn now to meat, which is one of the subjects the Minister of Food discussed early in his speech. He said that meat was different from other commodities in that he did not think there was any financial consideration involved. I should like to ask him about that. I agree with him that taking a long view, it will be possible through British farming, and through development in Australia and elsewhere in soft currency areas, to step up our ration to 1s. 4d. or beyond.

But what about 1949? The agreement with the Argentine expires in December. At a rough figure, we buy from the Argentine at an annual rate of £100 million and we sell at an annual rate of approximately £40 million. How are we to pay for our meat imports which this year—and I imagine next year—form a quarter of our ration? This year the position has been comparatively simple because of the sale of the Argentine railways. My hon. Friends on this side of the House have said before that this year we have been eating the Argentine railways. Next year, no doubt, we shall be able to complete the meal by eating the stations; but this process must come to an end. Certainly, it cannot go on indefinitely. The House would like to have an early opportunity of receiving some more information on this point. I do not think that, with all the increases which we anticipate and for which we hope in home production and in supplies from the Empire, we can get to the goal in the years immediately ahead.

I turn to the question of animal feedingstuffs. I am still of the opinion that animal feedingstuffs cause one of the chief bottlenecks which prevent increased home production at this moment. I know that there are a great many points of view on this subject, but I am satisfied that if we are to maintain a great increase in our home production, a large proportion of the money which we can spend in dollars should be devoted to the purchase of animal feedingstuffs. In this connection, I refer to a speech made by the Prime Minister in August, 1947, when he said that the maximum supply of feedingstuffs must be maintained.

The Minister of Food did not say very much about this great problem today. I hope that he has it in mind. The position, although improving, is still most acute in the countryside. There is acute anxiety amongst all those people who want to plan their production ahead. They are anxious about whether or not they are to get the necessary feeding-stuffs when the animals mature into full age. In August of last year the Organisation for European Economic Co-operation estimated that the United Kingdom's total requirements for coarse grains in 1947–48 would be seven million tons. We got six million tons out of the seven million. According to the same authority, our requirements for 1948–49 will be 7,800,000 tons. I understand that this year our home production of coarse grains was 5,400,000 tons. Therefore, we shall still need to import about 2,400,000 tons from abroad. I do not know where that amount is coming from, and the Minister did not enlighten the House on that point.

I hope the Government appreciate the seriousness of the position, and I urge them to do their utmost to fill the gap in order that we may develop our home production in this country. I believe it is now confidently expected that between 300 million and 500 million bushels of maize may be available for export from the United States. If that is so, and if, as I understand, the price is gradually coming down from approximately 2.8 dollars in December, 1947, to 137⅝ dollars for December delivery, it would seem that much more could be done in that direction to fill this very important gap. I commend that to the Minister's notice for investigation.

I was disappointed at Question Time today to hear the Minister say that he is still unable to reduce the extraction rate of flour for the British loaf. If it were possible to reduce it by as little as 2½ per cent., we should have about 130,000 tons more milling offals a year, which is more than we imported during the whole of 1947. In addition, I think the House would agree that we should make the bread appreciably more palatable to eat. It is important that we should have a reduction in the extraction rate at the earliest possible moment.

While speaking about bread, I want to mention an administrative point. There really is much confusion in certain parts of the country at the present time concerning the allocation of flour, and believe the Minister could put this matter right if he gave it his personal and urgent attention. During the summer, the Minister told the House and the country that a decision about the de-rationing of bread only depended on the next harvest. Since then, B.U.'s have been abolished, but, in fact, bread rationing has not, because the bakers are now allocated flour on the basis of their last year's supplies. Anybody with a knowledge of administration will realise that this is a bad system, because it ignores any movements of population. Consequently, flour arrives at the wrong places and in the wrong quantities. In the big cities, that can be adjusted very easily, but in the country districts much unnecessary inconvenience is caused. I ask the Minister to pay attention to this, and as an example of what is happening I would like to read a letter received during the weekend from one of these housewives who are having trouble in this regard. I think this is only one of many thousands of such cases. She writes as follows: I have a household of three, myself and a married couple, the man working as a grocer's assistant. Last Saturday, when I went to the shop where I get my bread, I was told that in future only regular customers would be supplied and I would have to give a definite order. The bread comes twice a week, and I said that I should want my usual amount—two 2 lb. loaves twice a week. This morning, when I went to fetch it, I was told that so little had been left by the baker that all customers' orders had been cut, and that I could only have two 1 lb. loaves. Is it reasonable to expect three people to live on 2 lbs. of bread for four days? This is typical of the letters which many hon. Members are receiving in consequence of this muddle over the clearing up of bread rationing, and I ask the Minister to look into this matter and have it put right. The United Kingdom harvest this year was 10,400,000 quarters, compared with 7,800,000 quarters in 1947. The total European harvest was 170 million quarters compared with 114 million quarters in 1947, an increase of over 40 per cent. I suggest that the Minister of Food can surely free bread from all forms of rationing, and, I repeat, turn to the next step of reducing the extraction rate of flour.

Before turning to one other subject that I wish to mention, I should like to refer to an item in the Gracious Speech which has, so far, not been referred to in the Debate on the Address. Although it is not a question concerning the Department of the Minister of Food, I hope I may have an answer to it. I refer to the Bill which will be laid before the House to modify the constitution and powers of producers' marketing boards. Although, as I say, it is not directly a concern of the Minister of Food, I hope that an early opportunity will be given to some spokesman of the Government to tell the House what will be contained in that Measure, and what it will be designed to achieve.

I wish now to say a few words about the countryside and the dwellers therein, because I know their difficulties perhaps as well as most other people in this House. I draw the attention of the Minister of Food to the very large number of people who live in the rural districts of this country and who are apt to be forgotten. I believe that he and his Ministry have the mistaken belief that because a family live in a rural district, they are better off for food than are those who live in a town. In my view, the exact opposite is the case. The country folk have no industrial canteens, no teashops, no cafés, and no hotels at which they can get meals off the ration, perhaps once a day, or even two or three times a week. They have to rely entirely on rationed foods. I admit that the Minister could answer me by saying, "What about eggs?" It is true that in some cases eggs are an exception for those who keep poultry, but the keeping of poultry is by no means universal. In fact, I would say that country people who keep poultry are in the minority.

The present ration, even with the increase which the Minister has seen fit to make, without any other source from which to augment it, is very small. It is probably true to say that when it comes to the delivery of meat in the countryside, the quality is poorer than that supplied in the town. The reason is that it is the custom in the countryside for the butcher's van to go out once a week to supply customers. By the time the butcher gets into the country district, the best cuts from that week's ration have been sold to his customers in the town. I ask the Minister to do all he can to help to ease the lot of the housewives all over the country, but particularly those in the rural districts.

That brings me to a contentious point which I think must be raised once again—the thorny problem of the ration for the agricultural worker. I ask the Minister to reconsider that position. As I understand it, the recommendations of the working party on the subject were never actually published, but it is common knowledge, I believe, that they did recommend better allowances. The Minister, speaking of that report, said: This has been very carefully considered both by my Ministry and by the Advisory Committee of the Trades Union Congress, but I regret to say that the recommendations in it were not acceptable.—[OFFICIAL REPORT, 12th April, 1948; Vol. 449, c. 601]. That was on 12th April. The fact remains that the present system of seasonal allowances leads to injustice. In one field workers may be hoeing root crops, in which case they get an extra allowance. In an adjoining field other workers may be hoeing some other crop or planting potatoes, and they get no extra allowance. As an administrative action does that make sense? The meat ration for the miner is twice as much as the ration for the agricultural worker, and the miner has the benefit of canteens as well. I do not in any way begrudge the extra meat ration for the miner, but surely, in view of those facts, the Minister must agree that the whole position should be reviewed again, and I hope he will see that that is done.

Then there is the question why the extra rations, such as they are, cannot be drawn direct by the farmworker or his wife. I cannot accept the reasoning of the Parliamentary Secretary, who said that many people who would be shopping with the farmworker's wife would feel aggrieved if she had extra rations. Surely that is a false argument. The miner draws extra rations direct, and in many districts the miner's wife, the farmworker's wife and the farmer's wife all go to the same shop at the same time on the same day in the week. That is certainly true in areas with which I am familiar, such as Durham, the West Riding of Yorkshire and Northumberland. There is no question of any distinction between various sections of the community. I ask the Minister to give favourable and sympathetic consideration to this matter.

In conclusion, I commend to the Minister the fact that the British housewives are a wonderful people, and the Minister, apart from all his other duties, has a great human problem to consider. I ask him sympathetically to administer the various regulations which he may think necessary, so as to lighten the housewives' burden in every possible way and at the earliest possible moment, because their lot is a very difficult one.

9.4 p.m.

Major Wise (King's Lynn)

As a countryman, I am very pleased indeed to follow the hon. and gallant Member for Richmond (Sir T. Dugdale), and I want to say at once that there is very considerable agreement among the countrymen on this side of the House and those on the other side with his latter remarks. I want the Minister of Food to take particular note of the question of farm-workers' rations and feedingstuffs as out- lined by the hon. and gallant Member. There is a lot that comes from the opposite benches with which I do not agree, but I certainly agree that much could be done to improve the position of those who live in rural Britain. The Parliamentary Secretary knows full well that for many months I have had this matter very much at heart. I plead with the Government to take note of the difficulties and inconveniences which the people in these sparsely-populated areas in the countryside experience in shopping and obtaining feedingstuffs.

There are two points that I wish to make very briefly, not in any sense with the idea of criticising; I want to make suggestions which the Minister might think worthy of consideration. He mentioned the question of bacon and also the increase in pig production during last year. For many months I have been agitated by the slaughter in this country of pigs which have not arrived at bacon weight. The Minister says we have had an addition of 100,000 breeding sows and gilts during the last year. In the normal course those breeding sows and gilts will produce—or should produce—during the next year over a million little pigs. If we take half and half—I do not know what is the proper percentage to take—in gilt pigs and hog pigs we are likely to have an increase of 500,000 hog pigs. Thus if we are able to increase our feedingstuffs from abroad and if possibly we are able to increase the price we can give for heavier pigs, we are likely to have from these breeding sows and breeding gilts no fewer than 500,000 additional bacon pigs.

I am glad to hear that we may see an increase in imported feeding-stuffs in the present year. We are encouraged in agriculture by the fact that we can now make more use of some of our home-grown products for the feeding of our livestock. There is one point I would like to emphasise to the Minister, and that is the price which is payable for bacon pigs. At the present time the highest price is paid for a pig of 10½ score and that pig, which apparently, according to the Minister, is a desirable pig to send into the bacon factories, fetches, at 10½ score, a price of 378s.—£18 18s. 0d. An 11½-score pig, which is 20 pounds heavier, fetches only a price of 359s., which in effect means that the heavier pig has a reduction of 19s. in the price. So we go on through the weights of the pigs, through 12½ score to 13½ score. The difference between a 13½-score pig and a 10½-score pig is a minus balance of 44s.

It seems to me ridiculous that in this country, where we are crying out for bacon, where the men of our countryside are looking for bacon with their meals as in the past, we are advocating the slaughter of pigs of immature bacon weight. I think this is a matter which should be looked into and I hope that the Ministry, when they are considering the New Year's prices, will encourage the production of heavier pigs, because I am certain that it is in the interests of the economy of the country. It is far easier for the farmer to feed the heavier pigs and it is far better that we should produce something which will mean a higher tonnage of meat for consumption at home.

There is another point which I think should be mentioned, and which is referred to in the Gracious Speech; and that is the question of the marketing boards. I represent possibly the finest agricultural constituency in the country. [Interruption.] Well, some hon. Members may differ, but I believe that the King's Lynn Division of Norfolk produces more home-grown foodstuffs than any other division. We have the fine barley lands; we produce potatoes and sugar beet; we have the fruit areas of the marsh lands, with their apples, strawberries, plums, and so on.

Mr. E. P. Smith (Ashford)

What is the acreage?

Major Wise

I do not know, but that we have at that end of Norfolk the largest farms in Britain and some of the finest small farms there is no doubt whatsoever. It is on the question of the market gardens that I want to speak. I hope that at long last the Government will be able to bring in some Measure to help the market gardeners with their products. Let me quote an example of the sort of thing that needs to be remedied. This occurred only last week. A constituent of mine sent to a market in the North 33 chips of 12 lb. each of tomatoes. I believe that the tomatoes were selling in the country town shops last week at about 1s. 3d. a lb. These tomatoes went North, and when she received her cheque on 27th October last week, she received a sum of £1 13s. per 33 chips of tomatoes—a shilling a chip and a penny a pound. I hope that the Ministry will take cognisance of the fact that our market gardeners cannot possibly hope to make any sort of livelihood out of their job if that sort of thing prevails. On 15th October this market gardener sent to the same market 50 bags of cabbages of, I believe, 20 lb. a bag, for which she received 9d. a bag; that is, less than a halfpenny a cabbage, and those cabbages were being sold to the consumer at 4d. or 6d. a lb.

Mr. Edward Porter (Warrington)

What market was that?

Major Wise

A market in Yorkshire. I believe that that sort of thing happens everywhere. I am asked to name the market. The market was Hull. In the same way, I believe, Brussels sprouts are being sent from British farms to obtain 6d. a bag, but are being sold to the housewives at 6d. a lb. New marketing arrangements for our vegetable products are overdue. I am pleased indeed to see that at any rate that portion of our agricultural policy will be dealt with in this Session of Parliament.

I speak as an agriculturist. Agriculture is doing a fine job. We will produce the stuff for home consumption if we can get a proper reward. We are doing it all along the line, in the North, South, East and West of this country. I can tell the House that some of our people are working really hard. Close to me was a large field of early potatoes; they were lifted, and another crop is now being harvested. In a field adjoining my residence, in my own Division, the tractors are at work almost at sunrise, working all day, and long after it is dark the fellows are taking the potatoes to the pits.

Mr. Baldwin

For a shilling's worth of meat a week.

Major Wise

Yes. We are advancing our methods and working with a will. In another field close to where I live, I had the happy experience during the harvest of seeing no fewer than seven combines at work in one field, a thing which before this year was almost unheard of on any British farm. That is "going some"; that is getting on with the job. I can assure the Government that if they will tie up these loose ends and give agriculture, in all its aspects, a fair and proper share of the good things it produces, then we shall produce what the country requires.

9.16 p.m.

Mr. David Renton (Huntingdon)

I find myself so completely in agreement with every word that has been uttered by the hon. and gallant Member for King's Lynn (Major Wise) that I am reminded of the fact that divisions in this House are sometimes, not only between Right and Left, but, also, although we regret it, between town and country. When that division is to be found, one has to wonder where one finds the Minister of Food and his Parliamentary Secretary. We find them courteous, charming, intellectual, skilful debaters, and completely out of touch with everything that goes on in rural England today. They both represent town constituencies, and the feeling about them in my own constituency is that, as a result of this year's astonishing muddle with regard to harvest rations, only an organising genius with a knowledge only of urban affairs could have conceived such a muddle. We did at last discover today that the Minister of Food has not the points goods that he would like to have. Whether that was the position at the time that he promised them to the harvest workers, I do not know; but, at any rate, they were not there for them.

May I give another small example of the kind of lack of sympathy which goes on, and I hope that this will not be considered an extreme case. The village of Stilton, which gives its name to the cheese, happens to lie in my constituency, although the cheese has never been made there. It was made, until the war, for several hundred years in villages in Leicestershire and sent to Stilton for passengers on the Great North Road. Recently, I went to a public house called "The Stilton Cheese," hoping to get a snack before I attended a meeting. I knew that I should not be able to get any Stilton cheese, but I thought that I should be given some inexpensive sort of cheese which the Minister of Food authorises in place of it, and I said to the man at the bar, "Can I have some bread and cheese?" He said, "Yes, sir. We have some very fine Gorgonzola." Gorgonzola is not an inexpensive cheese, and it is not a British cheese. I have no expert knowledge, but I understand that Stilton cheese can be made in this country and could be available just as cheaply as Gorgonzola, which has to be imported.

Mr. E. P. Smith

Is the hon. Member aware that, if he had dined in the House this evening lie could have enjoyed, as I did, a piece of real Stilton cheese—the first I have tasted for seven years?

Mr. Renton

I am very glad to know that. I hope that some Stilton cheese will find its way to Stilton and replace the Gorgonzola there.

Mr. Strachey

Perhaps the hon. Member will allow me to inform him that Stilton cheese is now again being made in this country.

Mr. Renton

I am very glad to hear it, and I hope it will be distributed on the scale we expect. I may say, it gives me immense pleasure to hear that, and to some extent it compensates me for the disappointments to which I have had to listen this evening.

I should like to mention something said by the Chancellor of the Exchequer during his interesting and encouraging speech this afternoon, because it links up with what the Minister of Food was saying. The Chancellor said that the creditor countries in Europe must be liberal in their import policies. Well, naturally we must be liberal; but at the same time we owe a debt to our own farm people, whose interests the hon. and gallant Member for King's Lynn was so ably putting forward just now. We must be very careful indeed not to let this country become a dumping ground for foreign vegetables and fruit. The Chancellor of the Exchequer set for this country in its relations with countries to which we were to export the very admirable trading principle that "we have to export what our customers will buy." If we are to set ourselves that standard, we should at least expect it of other people as well.

I now wish to ask one or two questions of the Minister of Food, hoping that if he feels like it, he will interrupt me in order to clarify the Government's import policy. To be perfectly candid, at the moment that policy appears to be one of drift from glut to glut. At least, that is what it seems to have been like this year. I would add that at Question Time today I was delighted to hear his statement about onions; and I hope that the Minister will prohibit the import of onions until it is quite clear that the consumers' interests require that they should be imported. Obviously, we must put the consumers' interests first; but it would be no satisfaction to the British consumer to know, so long as he gets his food cheaply, that British farmers were going bankrupt, which is what would happen if there were too big an excess of foreign imports.

After a few uneasy and uncertain weeks, plum imports were stopped; but they were stopped too late in August to prevent some British growers, including some in my own constituency, from having some losses which, it is felt by the farming community, could have been avoided. Generally speaking, I think it is fair to say that the Government have done the right thing, but they have done it too late. By postponing their decisions, they have created uncertainty on the part of growers and traders; and by postponing the decision with regard to plums they have, in fact, caused some loss.

We are entitled to know the system which the Government are applying in carrying out their import policy. We are entitled to know whether they are getting really good estimates, which should now be available, of what the British crop will be. Now, today is 1st November, and it is only today that the Government have decided not to allow imported onions to come in from Holland or elsewhere on 15th November. But I suggest that the Government, knowing the acreage targets for onions, knowing what sort of season we have had, and knowing that we have had plenty of rain in August, could have known by 1st September instead of 1st November roughly what tonnage of onions there was likely to be, to within a few thousand tons, from the home-produced crop. Incidentally, it would have been much fairer to the foreign countries concerned, because they also want to make their plans ahead; they do not want to enter into arrangements to send goods here which eventually are to be diverted somewhere else because of the plans being changed.

There is a belief among growers that the Government are overlooking a very vital factor in regard to the import of vegetables and fruit; and that is that, generally speaking, many parts of the Continent can produce supplies earlier in the season than is possible in this country. If foreign imports are allowed to continue to come in until the peak of the home season, as has happened with plums and is still happening with tomatoes, there is bound to be a serious glut in most areas. I shall give the House an example of what I mean. Take the bottling of plums. Most housewives are going to bottle a certain quantity of plums and make a certain amount of plum jam. They will generally prefer to use English plums, but because they want to make sure of getting their plums, they buy the foreign plums which are the first to come on to the market. It is really a question of timing. The Government should not wait until the home market is at its peak before stopping the foreign imports into this country. The purpose of the import policy should be to create confidence among growers, preventing them from making a loss, while at the same time paying regard to the interests of the consumers.

May I now say a word to supplement what has already been said with regard to rations, in their widest sense, for the agricultural community? First, let me deal with the meat ration for agricultural workers. I would remind the Minister that a few months ago I put down a Question asking him how much meat European voluntary workers who were working on British farms were receiving. He told me that the amount was 2s. 7½d. worth per week, and in answer to a supplementary question added that British workers living under the same conditions received the same amount. That is perfectly true, but for the fact that British workers live for the most part in their homes and not in class A hostels. In my constituency, scarcely any British workers live in hostels. This discrimination is not a kindness to foreign workers, because it does not make them any more popular. I think it is partly due to accident and partly due to our present system of discriminatory rations that this position arises.

I am very diffident about criticising this too much, but I can say that it was considered very significant in the countryside at the time of the harvest that there was no shortage of meat and high-caloried points goods in the industrial canteens, the mining areas and the industrial areas, as compared with the fantastic shortage in rural areas.

Mr. Strachey

It is not in the least the case that the shortage of canned points goods was confined to rural areas. It was an overall cut which was evenly distributed throughout the whole country.

Mr. Renton

Can the right hon. Gentleman tell me then whether, in the industrial and mining areas, there was a surplus of unexpended points because the goods were not available, and whether there was a rush of Members representing such areas to put down Questions on the subject in the same way as those representing rural areas were doing?

Mr. Strachey

The explanation is, of course, that the farm workers at this period are given a great number of points. They were also given an increased allocation of points goods to meet it, but if everyone elects to spend his or her points on one particular commodity, in this case canned fish or canned meat, then that commodity will run out and points will have to be spent on some other commodity. That no doubt happened when the rural areas got their due proportion of the scarce points goods like canned fish and canned meat, because that fact has to be taken into account in regard to the increased allocation they got at harvest time.

Mr. Renton

I feel bound to say that that statement of the Minister will be read with considerable amusement in my constituency if it is published there. That is all I can say, and my constituents must be the judge of this matter. The right hon. Gentleman and I are simply wasting the time of the House going on with the argument. My constituents know whether the goods were there and they know that the bread during the month of September had to be packed with marmalade or just anything because there was nothing better with which to do this heavy harvest work.

Mr. Strachey

I am not saying the goods were there in the rural areas. I spent a large part of my speech emphasising that there was a real and grave shortage of these points goods but that was in the industrial areas as well as in the rural areas. I am denying that there was any favouritism between the different parts of the country.

Mr. Renton

I am much reassured to hear what the Minister said, and I hope during the course of the next few months when there is a great deal of heavy work to be done on the farms, that he will do all he can to remove the impression that already exists about such matters.

I wonder if it is too late in the day to give the Minister, and more particularly the Parliamentary Secretary, the benefit of some sound second thoughts about the order which requires that the statement of rations for seasonal workers shall be in with the food office officials at least 24 hours before the beginning of each harvest operation, because the right hon. Gentleman and the Parliamentary Secretary are the laughing stock of the countryside over this. [HON. MEMBERS: "No."] Hon. Members opposite know perfectly well that it is impossible for a farmer to tell who is going to turn up for hay-making or potato-picking. Hon. Members also know very well, because I believe that some of them have tried to argue the case, that a far simpler and more straightforward scheme would be the one which the Minister, or perhaps it is the Secretary of State for Scotland, allows to apply in Scotland, and which also applies in Northern Ireland—that is they do not have an equivalent order at all. I cannot see, even in spite of the hon. Lady's views about the modern woman with which she dealt when the order was discussed, why the farmer or his wife, or the foreman or anyone else should be made to act as an unpaid official of the Ministry of Food to carry out such an order as this.

Finally, may I make a plea which is not the first of its kind I have made. I hope that as the food situation in this country improves, as we are told it is going to improve, something will be done to help the self-employed workers—the smallholders, who are responsible for a great deal of the food production of this country. The reason why they are given no extra rations at all is, I suppose, based upon two assumptions: first, that they live on a farm; and, secondly, that they can get their midday meal at home. In the majority of cases down on the Fens at any rate—it is different up on the clay land—the majority of the smallholders work in such conditions that these two assumptions cannot possibly be met.

As the hon. and gallant Member for Richmond was saying, it is as true of the smallholder as it is of the other people living in the countryside—they have not always got eggs or a pig. I know some of these smallholders work mostly on root crops, on which they do a hard day's work with little to go on. Many of them in the last two or three years have complained to me. I have had correspondence on the subject and I have put Questions down. I hope that we have impressed the Minister of Food that there is a case for these people, and that he will give them consideration as well, for the whole of the farming community have a great contribution to make—it is our biggest industry—and if that extra effort is to be forthcoming they must have more consideration from the Government than they have had during the past five or six months.

9.36 p.m.

Mr. Shurmer (Birmingham, Sparkbrook)

It is not my intention to weary the House for any length of time, but I should like to thank the Minister for the small concessions he has announced this evening. Small though they are, we know that these concessions will be welcomed by the people when they read the news tomorrow morning. Secondly, I should like to have an answer to the Question which I put to the Minister today when I pleaded for a little extra rations for Christmas and an extra sweet ration for the children. My right hon. Friend said he would be making a statement about the matter in the near future, and as he thinks about the question, I ask him to continue to think of that old rhyme: Christmas comes but once a year, And when it comes it brings good cheer. The people are hoping for a little extra cheer this year at Christmas.

The hon. and gallant Member for Richmond (Sir T. Dugdale) sarcastically referred to the record of three years of the Socialist Government. I am proud to support a Government which is feeding all the people of this country all the time, instead of feeding some of the people all the time and the majority of the people some of the time, which was formerly the position. Perhaps the hon. and gallant Member opposite and many of his friends do not know, or do not want to know, or probably forget, what was happening at about this time after the 1914–18 war, and even during the intervening period. If they represent industrial constituencies—I represent one and have lived in one for the past 30 years while I have been in public life—they may have seen little boys or girls outside the factories begging for a piece of bread that may have been left by a workman. Have they ever seen women late at night waiting for the meat shops to shut up in order to get the scrag ends?

I am sorry that we get a ration of only 1s. 4d. per week. I happen to have two in household, and it comes very hard, except that I am able to be away from home and go into our own canteen. Nevertheless, a family of four or five, in spite of the ration being only 1s. 4d. for each of them can get a decent piece of meat once or twice a week whereas previously they could not do so in the great industrial centres. They just got the scrag ends as the shops were about to close, or they would go down to the great shambles in the towns and cities. We remember also the time when hundreds of thousands of cattle were slaughtered and burnt in the Argentine instead of being sent to this country because their owners could not get a high enough price. Although people were needing meat they could not afford to pay for it.

On the question of points goods, may I say that nine of my hon. Friends and myself who represent constituencies in Birmingham have spent a lot of time during the Recess going into the question of the distribution of foodstuffs. We had considerable help from the regional office in that city. We still want to know whether points goods are distributed evenly. Are they distributed evenly in the towns and cities? It is well known that in some of the better shops in the centre of Birmingham one can easily get points goods, while in the outskirts and suburbs it is difficult to do so. It is rather strange that some of these shops in Birmingham are those where the better-class people do their shopping.

My daughter who is stationed in the slums of Glasgow as a Salvation Army officer was spending a day with us on Saturday. When her mother told her she would not get "Carnation" milk to put on some tinned fruit we had, my daughter said: "Why, in the shops in Glasgow you can see plenty of points goods crowded up on the shelves." Strange to say, I was in Glasgow at Whitsuntide. One often hears stories taken by people from one town to another about the conditions that exist in other towns, but—and I do not want to fall foul of Scottish Members in saying this—it is true that in Glasgow there are plenty of points goods in the shops. We are far less fortunate in Birmingham than the people in Glasgow. I would like to know whether points goods are evenly distributed throughout the country.

On the question of milk, I am glad that the Minister is able to carry on with the two and a half pints of milk. I would not mind if that ration were reduced, so long as it was not reduced to the children. I was listening to a speech about a fortnight ago in the Birmingham City Council, at a function which Commonwealth Ministers attended. The Attorney-General from Ontario made an interesting speech, but the part of it with which I was impressed was when he said: "My Lord Mayor, it has impressed me this week to see that you give to your children half a pint of milk per day." He went on to say with emphasis: "You do not know the great dividend you will reap in the future as a result of this daily half pint of milk to your children."

This summer I called at a farmhouse in Westmorland where they told me: "We had three little children here from Bristol during the war. Never once had those children tasted fresh milk until they came to this farm." That is true of hundreds of thousands of children in this country. I would, therefore, be prepared to give up my half pint of milk because of the children, and for the sake of the dividend that we shall reap in the future. To be patriotic is not only to think of the future of the country but to think of the people. The country may be great today but it will be much greater tomorrow as a result of the milk we are giving to our children. I am glad that the Minister is able to retain the two and a half pints per week.

On the question of fat, I happen to know something about fish friers. I have not done fish frying myself, but, as a result of being chairman of the Market Committee of the Birmingham City Council I became chairman of the fish friers of Birmingham. Knowing nothing about fish frying, I am the fish friers' president, as the Parliamentary Secretary will know from the correspondence I have had with the Department. I am glad that the Minister was able to issue 2,000 licences, mostly to the rural areas.

Mr. Strachey

Oh, no. All over the country, including the rural areas.

Mr. Shurmer

The Minister made a statement regarding competition among fish friers. There is a difficult position in Birmingham in this respect. Fish friers only open during three days a week, at the most. At the present time, the majority of them are in the working-class districts. If we allowed a new fish shop to open in the same street as one which at present is open only on three days a week, it would open on the other three days. Then we should be engaging more people on that sort of work instead of on productive work. There is not the slightest doubt that the Minister has taken into account the question of high profits made by fish friers. The Fish Friers Association in Leeds have objected. They have advertised their businesses with a large turnover and huge profits. When they want to sell a business people often add on a little extra. It is wrong to open new fish shops in great industrial centres when those already there open only on two or three days a week. I am glad that some of those who have only a small allocation of fat are to have a little extra. I am also pleased that the domestic issue of fat has been increased. Many people buy chips in order to render them down to get the fat. That is perhaps not known to the Minister. It is being done by people in Birmingham. Hon. Members may be amused, but that is true.

I am glad that the ration of sweets has been increased. Some of the shops are fully stocked up. It is rather strange that some of the multiple shops have such good supplies. I should like to know where all the biscuits go. One can go into the working-class districts and find little shops which are lucky if they can get a couple of boxes of biscuits. One can go to the great stores, such as Lewis's, Woolworth's, Marks and Spencer, or Littlewood's and find huge vans unloading large numbers of tins of biscuits. I do not think that we have an equal allocation of biscuits throughout the country. I should also like to know what happens to all the broken bis- cuits. At one time one could always buy broken biscuits. I wonder whether the manufacturers mend them now and send them back to the shops. I do not think that the workers get a good allocation of biscuits. I know that biscuits are unrationed, but I hope that the Minister will use his influence to persuade the biscuit manufacturers to distribute them more evenly. I can tell him that the Co-operative Societies do not get them. They go to the multiple shops such as Lewis's, Woolworth's, Littlewood's and Marks and Spencer.

Why do we get all this row about rations? I could buy two lb. of butter before the war; I could buy two lb. of bacon, and many other goods before the war which I cannot get now; but whilst I was buying those goods, there were hundreds of thousands of people who could not buy anything at all. They were only too glad to get the bare necessities by means of a grocery ticket from the board of guardians or from the soup kitchens. I am not unhealthy as a result of being deprived of a little today. All the hullabaloo from the Housewives' League is created by people who cannot get what they want. Heaven help this country if those people had the opportunity to take over today. They would see that they got all they wanted, and the others would have very little. Whatever the propaganda, people today realise that for once in their lives, they are being decently fed, even if they do not get all that they want.

9.50 p.m.

Mr. Douglas Marshall (Bodmin)

I hope the hon. Member for Sparkbrook (Mr. Shurmer) will forgive me if I do not follow him in his chase after the elusive biscuit. I have only ten minutes left and there are one or two particular points I want to make.

The hon. and gallant Member for King's Lynn (Major Wise), who I thought made a most interesting speech, with most of which I thoroughly agree, referred with pride to his division as being the most wonderful agricultural division in England. I would not quarrel with that, as I represent Cornwall, but, concerning his reference to what was said by my hon. and gallant Friend the Member for Richmond (Sir T. Dugdale) about extra rations for agricultural workers, I thought my hon. and gallant Friend did not sufficiently qualify his statement concerning the miners and the agricultural workers. It does appear to me to be strange indeed that the coal miner received a special allocation of meat, and has canteen facilities, which I quite agree he should have, while at the same time the man who goes down a Cornish tin mine is not so favoured. Why should there be that difference? Perhaps the Parliamentary Secretary will look into that matter.

At the beginning of his speech, the Minister of Food appeared to me to make a remarkable point with regard to the continuing meat shortage. So far as I understood it, his argument was that the reason we were short of meat was because there is an overall meat shortage in the world at the present time, and that it had nothing at all to do with the question of dollars. The Minister went on to say that the difficulty about purchasing further supplies of feedingstuffs was dollars. He cannot have it both ways. If he had, two years ago, purchased the feedingstuffs we would have more home-grown meat now. He also referred to building our home meat supply eventually to the 1938 level. But why only this level? Why should it not be considerably larger?

The Minister also referred to canned foods, both meat and fish, and, with regard to salmon, he regretted that there was nothing else which could really take its place. I do not agree with that at all. The Minister never mentioned the development of the pilchard industry. The same criticism applies in regard to sardines, and I would ask the Minister to inquire into the whole question of canning fish, especially dog fish, to take the place of imported salmon. Whether or not this item of food could take a great place in our diet, I think these are matters which warrant a searching inquiry, and I trust that the Parliamentary Secretary will consider that I am being constructive in making this suggestion. I see no reason why the possibilities of canned mackerel should not be investigated. There is a difficulty about this canning problem, however, and I heard only last week in Cornwall of a serious shortage of tins for the canning industry. These are matters which upset production and to which the Ministry should give attention.

With regard to fats, we all welcome the announcement of concessions made by the Minister, but let us remember that it is the hard work of our men and women which has given us these concessions, and not the Minister of Food. We should fully recognise that point. I endeavoured to rise while the Minister was making his statement, although I realised that he could not keep on giving way. I wanted to say, when he said that no more applications will, in fact, be accepted from fish friers, that I hope that where applications have been made before and turned down, but not re-applied for owing to sickness or because people could not apply in the time allowed, those cases, will be treated as ordinary applications.

Dr. Summerskill

I must warn the hon. Gentleman that he should not tell such applicants that their applications will be accepted. I do not think it would be fair to tell those people turned down that they can apply after the 31st. All those who come in this month and have not already heard, are being considered, but I think he must understand that no new applications can be made with any certainty of being accepted.

Mr. Marshall

I have not time to continue that argument, but I hope the hon. Lady will understand that I do not agree with her on that point.

I wish to refer for a moment to the question of the fishing industry in general. This applies very much more to the Minister of Agriculture than it does to the Minister of Food, although it is still a question of food. The Gracious Speech mentioned the introduction of a Bill which has not yet been presented to the House. Oddly enough, it was the one subject which the Prime Minister did not mention when speaking on the Gracious Speech. I hope that when we consider the fishing industry, we shall try in every way we possibly can to develop the inshore fishing. We must find a way of treating freshly caught fish as a different commodity from fish caught in the far seas. I believe these matters are necessary, and that they will ultimately not only provide us with increased food production, but will maintain the security of the ports and help in the defence of this land.

In the very short time left to me, I would like to make a general reference to the Gracious Speech. My own feeling is that the most important matter in it is the gravity of the international situation. We all know that is so, and yet it is overwhelmed by controversial legislation. My quarrel with the Government is that they will not spotlight the things that really matter. I suggest that they should take heed of the following two well-known sentences: Well-arranged time is the surest mark of a well-arranged mind. The great rule of moral conduct is, next to God, to respect time. These two profound sentences are never realised by this Administration.

Debate adjourned.—[Mr. G. Wallace.]

Debate to be resumed Tomorrow.