§ I will conclude by giving a broad indication of the effect of this programme on our economy. This heavy and growing burden comes at a time when we already need a further large increase in exports to meet our rapidly rising bill for imports. In meeting this situation the Government have one clear aim before them; to see that we carry as much of the load as possible ourselves, now, and refrain from mortgaging the future by running into debt abroad or reducing the investment on which our industrial efficiency depends. This will be a task of great difficulty because the industries which will have to carry most of the increased defence orders, the engineering and metal-using industries, are the very ones on which we have relied to make 585 the biggest contribution to exports and to industrial equipment.
§ This means that the measures we must now take will be far-reaching and will affect every citizen and almost every industry. There will have to be financial measures to check civilian demand. On these I will say nothing; the Chancellor of the Exchequer has them under consideration and will inform the House when he opens his Budget. But, in addition, there will have to be a series of more direct economic measures. Within the compass of this statement I can give only a broad outline of these, but it will be elaborated by Government spokesmen in the coming debate.
§ Our task is to turn over progressively to defence production sections of the engineering industry, especially those producing aircraft, vehicles, radio and radar equipment, and machine tools. Some new factories will have to be built; and authority has already been given for two additional tank factories and for several new production lines for the most modern types of jet engine. But for the most part we must rely on existing capacity; much of the new work under this increased defence programme must replace work that is already going on. This will inevitably reduce the exports of these industries, particularly now when labour and materials are so scarce.
§ We must therefore call on the rest of industry in two ways. When the main contracts have been placed, those sections of the engineering industries which are now producing goods for current consumption will be called upon to take some of the strain of producing components and so forth under sub-contracts. Secondly, these and other industries, such as the textile industry, will have to expand their exports still further.
§ In this way we aim to maintain a balance in our overseas accounts, at the expense primarily of home consumption, although some reduction in the supply of plant and machinery will be inevitable. There must also be some reduction in the civil building programme, though we shall do our utmost to avoid large or widespread interference with it. If, as the programme develops, it appears that exceptional measures are necessary to ensure the availability of labour, we shall not hesitate to take them.
586§ The fulfilment of defence orders must be regarded as of special importance, and carried through with all possible urgency. Some firms, for their own protection, will have to be given directions about the volume of defence orders which they must accept, and the timing of these in relation to other orders. In other cases, where a firm is doubtful whether a defence order should have preference over other obviously important orders, such as equipment for a generating plant or an export of special importance, the firm should immediately consult the Supply Department concerned, which will arrange for the necessary guidance to be given.
§ In this way we shall ensure that the defence programme is carried through without introducing the idea of "an overriding priority" for defence which, as all our experience in the last war showed, creates more problems than it solves and produces bottlenecks which very soon interfere with the whole production machine.
§ This programme will have far-reaching effects on the pattern of industry. To carry it through effectively and smoothly, the Government will need the fullest support and co-operation from managements and men. They are confident that this will be forthcoming. Both sides of industry will be taken fully into consultation at every stage of the programme.
§ As I have said on a number of occasions—and, indeed, as has been said by President Truman—a sound and robust economy is an essential condition for the preservation of free institutions. It is also an essential support for military strength; and, in preparing this programme, the Government have weighed very carefully its probable effect on the social and economic standards of life in this country. I make no attempt to deny that it must affect our standard of living; we shall all have to make some sacrifices in the face of rising prices and shortages of consumer goods.
§ But, though the burden will be heavy, it is not more than we can bear. If we carry it in the way I have suggested, we shall not destroy the recovery which we have made in the last few years; nor shall we imperil the future strength of our economy. I trust that, despite the difficulties, the great productive efforts which have made that recovery possible 587 will be maintained, and I am confident that all sections of the community will give their full support to this national effort to make ourselves strong enough to deter any attack upon our freedom and our way of life.
§ Mr. ChurchillWe are all obliged to the Prime Minister for the terse and evidently deeply considered statement which he has made to the House upon these grave issues. Needless to say this is not the time for us to debate them. I hope that an opportunity may be found not even next week but the week after for a debate upon this subject of defence, which should have at least two, perhaps three, days' discussion. We must all do our best to measure these matters as carefully as we can in the interval.
I will venture to say only this: this is the third statement we have had in the last six months—one before we separated for the Summer Recess, then the proposals which were made when we met again, and now this one; three separate statements, progressive in their character, magnitude and intensity. But in my opinion the fundamental issues and dangers with which we have to deal have not altered in that period. They were there six months ago, perhaps 12 months ago. What we are receiving today, which we receive with all respect, is a further revised estimate of what is necessary and what would have been necessary six or even 12 months ago. In addition to that, we wonder very much, as the estimates have risen, whether action has corresponded even to these slow, steady and repetitive rises in the estimates?
The other aspect which we must carefully consider at this juncture is whether this is the final estimate, whether it is an estimate which corresponds with the realities which we have to face. Naturally, we all understand the difficulties under which the Government—any Government—labours in these matters, and the effect they produce out of doors on the public and on the electorate. But we shall give our most careful consideration to all these matters and we hope that a full debate of two or three days may be provided for us before any long period has elapsed, and probably the week after next.
§ Mr. Clement DaviesMay I join in that application for the fullest possible 588 time? There are three matters with which the Prime Minister has dealt which are closely integrated; the call-up of men, production and the financing of it all. May I also ask for at least two days, maybe three, and I prefer, if I may ask it, that the debate should be taken the week after next rather than that we should be hurried on such an important matter.
§ Mr. John HyndIs my right hon. Friend in a positon to give the House any further information on the procedure which is to be adopted for dealing with the special hardship cases in connection with Class Z men?
§ The Prime MinisterMay I first say in reply to those three questions that it is all agreed, I think, that we should have a full debate on this subject? The extent and the timing of it would perhaps be best discussed through the usual channels. It is our desire to meet the House. In regard to the point raised by my hon. Friend the Member for Attercliffe (Mr. J. Hynd), I cannot give the details in a statement like this. I think it would be much better to await the debate. I cannot make a full statement on those matters now.
§ Captain RyderWith regard to the statement about the selective call up of reservists, may I ask the Prime Minister if he will bear in mind that this is a matter which may well be used by the Communists to foment discontent in the country, and will he forestall that by instituting a searching examination into all possible cases of hardship so that this House may be fully and accurately informed as to the scale of that hardship?
§ Lieut.-Colonel LiptonWill the Prime Minister indicate, in order to remove or reduce such anxiety as does exist, whether there is any age limit beyond which men will not be called up under this Class Z scheme for 15 days' training?
§ The Prime MinisterThat again is a detailed matter which might be raised later. There might be exceptional cases of older men, certainly for certain sedentary occupations, but broadly speaking one does not expect having to exceed a reasonable age limit.
§ Mr. OakshottThe Prime Minister emphasised the importance of raw materials and the importance of work on 589 ships for the Navy. May I revert to a matter which was the subject of a supplementary question earlier in regard to the ban on overtime working in our shipyards? Is the Prime Minister aware of the inevitable delay which will result in the handling of vital raw materials essential to the defence programme and in work on naval and other vessels? Will he take immediate steps to try to secure a settlement of this dispute at the earliest possible moment, and an immediate resumption of overtime work?
§ Mr. Emrys HughesDoes the Prime Minister realise that we have entered a new phase which will result in a costly and ruinous arms race? Has he taken account of the effect that this will have on our potential enemies? Does the Prime Minister think that they will not increase their reserves of man-power and armaments and that we shall not be in a worse position next year than we are today? Does not the Prime Minister realise that what is needed today is a new diplomatic initiative which will end this arms race, a race which will bring us nearer ruin and reduce the standard of living of the people of this country?
§ The Prime MinisterThe hon. Member will know that we have consistently been trying to get those reductions. He will also know, because the figures have been given, of the immense forces built up by another country. Reduction should begin there.
§ Mr. GammansIn view of the significant omission in the Prime Minister's speech, may I ask if he is satisfied that this very ambitious programme can be fulfilled with the present length of the working week?
§ The Prime MinisterA good deal of overtime is already being worked. That is obviously a matter which should be worked out in industry.
§ Mr. MikardoDoes the Prime Minister recall that the Government told us only a few months ago of a three-year budget of £3,600 million; and that that, with some American help, was the most we could possibly manage without seriously damaging our economy? How does he reconcile that with today's statement that we can bear £4,700 million?
§ The Prime MinisterMy hon. Friend is inaccurate in that. What I said at that time was that that was the most we could manage without taking special measures. We are now taking those special measures.
Brigadier ClarkeDoes the Prime Minister realise that whereas the Class Z reservist is very anxious to serve his country, he is equally anxious to see that no people avoid military service as they did previously, in particular people like the Lord President of the Council, the present Minister of Labour and the Minister of Defence?
§ Mr. SpeakerThe hon. and gallant Member had no business to make those remarks. One must not make personal imputations or assertions. I rebuke him.
§ Mr. H. HyndThe Prime Minister mentioned in connection with the call up to the Army that men who had been discharged before 1948 or had been previously called up before 1948 would not be called up. Does he mean immediately before 1948, and, if so, does that mean that no one who served in the last war will be called up under the new arrangements?
§ The Prime MinisterI cannot make an absolute statement. Broadly speaking we shall try to get the people on the basis of those who last served to be called. If we are doing so on the basis, as we must, of getting the men who are required for the tasks, it may be that there are key men in certain places who will be required, and who have actually served.
§ Mr. Martin LindsayIs the Prime Minister aware that his statement, so far as it goes, will be welcomed all over the free world, and not least by our friends in the United States, who have hitherto been bearing the greater share of the burden?
§ The Prime MinisterI really cannot let that statement go, because it does harm. The hon. Member knows quite well the fact of the deployment of our troops in various parts of the world who have been holding the line in many places for many years.
§ Mr. ChetwyndAs the statement of my right hon. Friend concerning Z reservists only covers a fraction of the 591 millions involved, and as all those who are not affected will feel threatened for a considerable time, would he please hasten the full details so that we can remove this anxiety from the millions who will not be affected.
§ The Prime MinisterWe shall try to notify them as soon as possible. We shall try to give reservists as long notice as possible.
§ Colonel RopnerWhile appreciating the grave inconvenience which will be caused to reservists who are called up, may I ask the Prime Minister to give an assurance that between now and the days of the debate he will consult again with the Minister of Defence, or the Secretary of State for War, to make quite certain that the period of 15 days for which it is proposed to call up many reservists is in fact adequate? Even another week may more than double the value of the fortnight's training.
§ The Prime MinisterWe have naturally consulted with our advisers, and we think that under proper arrangements—it is of course absolutely essential when men are called up that they should be properly and fully employed—at least a fortnight is adequate.
§ Mr. BowlesMay I ask my right hon. Friend whether coal miners who may be Z reservists will be exempted?
§ The Prime MinisterI should like to look into that particular point.
§ Sir Peter MacdonaldWill the Prime Minister give an assurance that the efforts of this country will, so far as possible, be linked up with those of the overseas Dominions, and especially the Colonial Empire, in their production of raw materials? It is vitally important that we should get as many minerals as possible through our colonial production, and I should like to know if steps are being taken to accelerate the production of raw materials for the rearmament programme.
§ The Prime MinisterThe hon. Member will recall that that is one of the matters which I discussed when I was at Washington, and not only the allocation of raw materials, but also the searching out in order to increase the supply. If I may refer to the previous question, I think that was covered by what I said about 592 reservists who would be retained for essential work.
§ Mr. Arthur LewisIn view of the need for keeping down the cost—and everyone agrees that huge fortunes should not be made out of armaments—would the Prime Minister consider introducing the necessary legislation for the immediate nationalisation of the armaments industry of this country?
§ The Prime MinisterI think that the hon. Member must look a little more closely into this. Apart from what is called the armaments industry, rearmament does cover an immense range of industries—sub-contracting and so on, the engineering industry and the rest. From the point of view of practical politics it is out of the question to nationalise the whole or every part of industry engaged in rearmament.
§ Mr. NabarroIs the Prime Minister satisfied that the intensified industrial programme promulgated in his statement will be met by an increase in production by the fuel and power industry?
§ Mr. YatesMay I ask the Prime Minister if he realises that there is a considerable volume of opinion in this country which is not Communist, but which will be absolutely horrified by the statement he has made this afternoon—[HON. MEMBERS: "Nonsense."] May I ask him whether the cost of £4,700 million is to fall absolutely upon the economy of this country; and whether he considers that a direct approach to our potential enemies in the way that an approach was made to President Truman, would be far better before this programme is put on its way?
§ Mr. Boyd-CarpenterIn view of the statement of the Prime Minister that a reservist, whose occupation would in war be a reserved occupation, will not be recalled with the other reservists, can he say whether it has now been decided to publish a list of such occupations?
§ The Prime MinisterThat will be dealt with later on in detail.
§ Mr. CollickDid I understand my right hon. Friend to say that naval reservists are to be recalled for a period of 18 months and that it is to be on a selective basis? Surely that must inevitably be grossly unfair?
§ The Prime MinisterThese detailed matters are rather difficult to deal with by question and answer, because there are various types of reservists. I think it would be better if we left some of these things for the debate.
§ Mr. Henderson StewartIs it the intention, before the forthcoming debate, to furnish the House with further particulars of the new production of arms that is intended; the types and amounts of new production, the amount of equipment and so on, so that we may be better informed before the debate?
§ The Prime MinisterThe hon. Member will realise that there is a limit to the amount of information we wish to give to the world in general on these matters.
§ Mr. ChurchillAs there have been so many questions on a subject we are not proposing to debate for a certain number of days, I should not like the conversation to be closed without giving the Prime Minister the assurance that these proposals will be examined with fidelity, candour and good will by us. We shall speak our minds upon them with no other thought but what is the best method of securing the safety of our endangered country.
§ Mr. Ivor Owen ThomasMy right hon. Friend has indicated that it is likely 594 —or at least this is what I concluded from his statement—that the selection of Class Z reservists for recall is likely to cover all men who served right through, from 1940 to 1948. Can he give an indication as to the possibility of issuing an appeal for volunteers to fill those posts on a selective basis and thus minimise the hardship that might be caused by a compulsory call-up over the whole group?
§ The Prime MinisterI should like my hon. Friend to realise the nature of the problem with which we are faced. It is not just the question of getting so many individuals; it is getting people who have had the training, and who fit in, and therefore make a complete unit. A general appeal for recruits would not do that; therefore there is need for this selective call-up. I need hardly say that it is open for volunteers of the Territorial Army, the Regular Army and the other forces to come forward. The more people who volunteer the better, and the less recourse we shall have to the call-up.
§ Mr. SpeakerI wonder if I might appeal to the House? If I may say so, we are learning nothing from all these questions. It is a complicated document and we shall debate it in due course. Could not we have more restraint in the number of questions being put?