HC Deb 27 June 1951 vol 489 cc1395-522

Order for Second Reading read.

4.12 p.m.

The Lord Privy Seal (Mr. Stokes)

I beg to move, "That the Bill be now read a Second time."

I would remind the House that on 1st May my right hon. Friend the Minister of Supply gave a brief outline of what was intended. Since that date a White Paper has been published which gives fuller details. The Bill and the White Paper and the two Orders clearly explain what is before the House. I do not propose to detain the House by explaining in detail, but in presenting the Bill it would perhaps be as well to explain that the Government's power to trade is derived from a Ministry of Supply Act of 1939.

The Order printed in the White Paper transfers those functions, as indicated in the First Schedule, from the Ministry of Supply to the new Department and in the Second Schedule from the Board of Trade, which, in turn, had certain powers transferred to it from the Ministry of Supply in 1946. Further, responsibility for the Raw Cotton Commission, which was set up by the Cotton Centralised Buying Act of 1947, and the Board of Trade functions connected therewith are to be transferred by the Transfer of Functions Order shown in the White Paper at Annex I, subject to qualificatious which I shall explain a little later.

Perhaps at this stage I might express to the House the regret of my right hon. and learned Friend the President of the Board of Trade that he is not able to be in his place today. He has asked me to say that he is sorry not to be here and that he supports the policy contained in the Bill. I hope I shall be expressing the views of the whole House in wishing him a speedy return to good health and to his place with US. [HON. MEMBERS:Hear, hear."]

The Bill has been designed to provide the utmost flexibility so that duties can be added or subtracted, as may prove advisable as time goes on. May I say at the outset that I have been most anxious to consult as far as practicable the main people affected by these changes. Consultations have already taken place between myself and other Ministers on the one hand, and representatives of the Federation of British Industries, the T.U.C., the representatives of both the cotton and wool trades, the representatives of the manufacturers in the light metals and non-ferrous metals trade and with the British Chemical Manufacturers' Association.

I think it can fairly be said on my behalf that we have already done what we can, before presenting the Bill to the House, to find out the views of those who are most affected, and I am only too glad to express my thanks for the helpful way in which they have discussed matters with us, as a result of which there have been significant modifications making, I hope, for more efficient working of the Department. With all these discussions it was inevitable that there should be delay in presenting the Bill, but I hope right hon. and hon. Gentlemen will think that that delay has proved to be worth while.

Perhaps I may briefly state to the House what I term, in my own heading, "the object of the exercise." It is this. As far as practicable the intention is that all raw material questions should be dealt with in one place instead of in several, but more particularly that a responsible Minister, with time at his disposal, undistracted, should focus attention on raw materials supplies and be free to watch both the short and long-term requirements.

I emphasise that as I see it this is not a short-term problem alone. When the defence problems have been mastered there will be a long-term problem about which I shall have something more to say towards the end of my speech and which must be tackled. The action which we are taking now will, in my opinion and in the opinion of the Government—or perhaps I should put it the other way round—be a big step towards a long-term solution of a very urgent problem.

I should add this. As the House knows I recently paid a visit to Washington. If I may use the vernacular, if anything stood out a mile during my conversations with responsible persons—and I do not think I had any conversation at all with anybody who was not responsible—it was that in these overseas negotiations it is vital that the person conducting them should have the whole story in his hand and should be responsible for the whole range of raw materials. What is even more important is that he should be quite certain that he has the right figures.

Having spent a considerable part of my life dealing with figures I know, as we all know, that one can prove anything with figures. It is vital in this matter of international negotiations, if one is to have the confidence of others—and there the a great many others concerned—that the Minister or whoever is conducting negotiations should be quite sure of his facts and should have authority to speak.

I hope, therefore, that those people—and no doubt there are a great number of them—who, for one reason or another, do not like all that is now proposed will bear in mind what seems to me to be the over-riding consideration—that we shall not get out of this trouble of the shortage of certain materials in the short-term or find a cure for those shortages, and others which may occur in the long-term, unless we put up with a certain amount of inconvenience in order to get the job tackled at the right level and in the appropriate manner.

That also goes for what seems to me to be the second most urgent problem, and that is the question of having some single control in dealing with the commodity price level. What we have in mind is to try as an objective to get things a little bit nearer to normal. There is, as anybody who studies the commodity market knows, very serious fear of inflation on a wide scale. Many commodity prices are now at an extremely high level compared with what they were a year or 18 months ago, and my right hon. Friend the Chancellor of the Exchequer and I are very much concerned with this problem.

We welcome the downward trend that there has been in certain materials, which would indicate a return to—shall I say—sanity and more orderly buying. In addition to our aim of preventing inflation, we shall also aim to assure a fair price to both producers and consumers. There is obviously a need for concentration on the future requirements of long-term planning and development the world over. of which I shall have something to say a little later.

Perhaps I should add this, that the Bill does not necessarily mean entering into a greater range of public purchasing. By and large public purchasing to date has in these matters been conducted only where shortages have occurred. The intention of the Bill is not to frighten people into the belief that wider and wider public purchasing is to be indulged in: nothing of the kind is the case.

Let me say something of the guiding considerations with regard to the duties and staffing of—if I may so call it—my new Ministry. Having been on the other side of the fence for a very long time I am very conscious of the problems which confront industry when changes are made, and how irritating those changes can be. Therefore, as I have said to the representatives who have been to see me from time to time, I am endeavouring as far as possible to make the changes with the least possible dislocation of and inconvenience to industry. In fact, as far as possible I hope that industry will continue to deal with the same people. In other words it is not the intention to set up another huge staff of people whom industry has never seen before.

Instead, there will be a transfer of certain staffs from the Board of Trade and the Ministry of Supply to my Department. I think I could, perhaps, most aptly describe it as a hiving off from those two Departments and a re-hiving of the same people in my hive. [HON. MEMBERS: "Busy bee."] I have not been called a queen bee before, although I have been "Lord Festival" for some time. As I see it at the moment, the total additional staff required over and above the transfers will not be more than 100 persons in all —which I do not think can be regarded as wildly extravagant.

Mr. Ellis Smith (Stoke-on-Trent, South)

How many transfers will there be?

Mr. Stokes

I was coming to that. It depends on how many get axed. [HON. MEMBERS: "By whom?"] Well, the people who come to me will be axed if I do not want them, obviously. However, Timber Control will come to me in toto,and that numbers 900. I expect that the total of the remainder who will be transferred will be a little larger than that, but not above 1,000. They will all be bodies at present in Government employment in one or the other of the two Departments, and will not be replaced when they leave.

As I said at the beginning, there is bound to be some inconvenience to industry, but I hope that the assurance I have given will make industry feel better about it. Nobody displayed any despair or despondency when coming to talk to me about it, and I think that it will help to allay any fears there may be about inconvenience to know that the essential, related sections of the Board of Trade and of my Department will be housed in the same building. I have said already that the Bill has been drawn in a flexible manner so as to permit adjustments, and I repeat it now, so that the House may be aware that it has been so drawn to meet new situations as and when they may arise.

With regard to the range of my responsibilities over materials, I think that the White Paper sets out in a fairly comprehensive way what those materials are, but as, since this White Paper was first published, hon. Members and others have asked me questions, perhaps it would help if I dealt particularly with one or two of them. When my right hon. Friend the Chancellor of the Exchequer winds up the debate he will deal with any others about which questions may be asked during the debate. First of all, timber and the Timber Control. I want to make it quite clear—for a number of hon. Members have talked to me about this—that that comes to me 100 per cent. So far as traders and persons who use timber are concerned, they will continue to deal as before. There will be no change at all.

Mr. Oakshott (Bebington)

Does that mean that the issue of licences will be handled by the right hon. Gentleman's Department, or by the Board of Trade as before?

Mr. Stokes

No. That will be handled by Timber Control as before.

Mr. Oakshott

Through the right hon. Gentleman's new Department?

Mr. Stokes

Yes. I take it over lock, stock and barrel.

The second main item which comes direct to me is sulphur, sulphuric acid and fertilisers. They have not been separated because, obviously, they are so mixed up that precise separation would be impossible. Eighteen new plants or conversions for the production of sulphuric acid by means of pyrites and the anhydrite process are also planned or already under construction. The first plant is expected to be operating in July this year. All of that work, as the House will know, was put in hand by the late President of the Board of Trade.

Mr. Follick (Loughborough)

Not late, but present.

Mr. Stokes

It is not really necessary to be pedantic about it.

The effect of this will be that by 1954 the total of sulphuric acid produced from pyrites in this country will have risen from 280,000 tons to 900,000 tons, and the effect on the raw sulphur position will be that our imports will be reduced by 50 per cent. By 1955–56, which is a very considerable step.

Third, wood pulp and paper. I am assured by the trade that they are not in the least concerned about the changes. In fact, they feel reassured, knowing that it is coming over 100 per cent. to my Department, because they may stand to gain by the extra concentration that there will be in the field of procurement.

Materials for ferrous alloys, such as ores and concentrates, come to me, but not iron and steel production, on which I shall have something to say in a moment. I told the House earlier that we had consulted the non-ferrous and light metal trades, and I want to explain here that the metals only will come to my Department, and what is known as the semi-fabricated material will remain with the Ministry of Supply. That was decided after consultation with both trades. It seems the best thing to do, and likely to cause the least inconvenience, while, at the same time, ensuring the biggest concentration on the procurement of the raw material. In that connection, I should say that the Non-Ferrous Metals Directorate at Rugby will come over in its entirety to my Ministry.

I now turn to the textile industry, which presents an especially difficult problem. The division between raw materials and manufacture is awkward, but anybody who knows the slightest thing about what is going on in the international field on procurement would have to admit that, whatever the inconvenience, it would be quite impossible to tackle the range of raw materials the International Materials Conference is attempting to tackle unless the procurement of both wool and cotton were under the person responsible for the whole negotiations across the wide field of raw material supplies. I emphasise that the arrangements are so made as, I hope, to bring about the minimum of inconvenience.

I am not quite sure whether it is made clear in the White Paper, but appointments to the Raw Cotton Commission will be by joint agreement between the President of the Board of Trade and myself, but the Raw Cotton Commission itself comes over to me, as stated by my right hon. Friend the Minister of Supply in the debate on 1st May. Wool and cotton, beyond the procurement stage, remain with the Board of Trade, and the Textile Fibres Committee, which has done such admirable work under the chairmanship of the Parliamentary Secretary to the Board of Trade, will continue under my right hon. and learned Friend the President of the Board of Trade but will have on it a senior member from the Ministry of Materials so as to ensure the maximum collaboration.

With regard to this problem, the Ministry of Materials will be responsible for the general policy of the procurement of both the raw materials, the cotton and the wool, and this includes formulating and carrying out policy in the international field. Cotton, as hon. Members know, is on public account. Appointments to the Commission will be made jointly by myself and the President of the Board of Trade. In practice the Board of Trade and the Raw Cotton Commission have not in the past required any statutory directions, and the emphasis here is to underline that the Board of Trade is continuing its responsibility in the textile field.

With regard to wool, there is no public purchase, and the two Departments will work together to ensure the maximum efficiency.

Mr. Osborne (Louth)

Could the right hon. Gentleman say how the Minister will procure the wool, if he is to take responsibility for purchase?

Mr. Stokes

At the moment there is no public purchase of wool at all. It will remain exactly as it is at present.

Mr. Osborne

That is my point. How will the right hon. Gentleman guarantee procurement if there are no public purchases?

Mr. Stokes

There is no question of public purchase. I shall be in touch with the authorities who at present procure wool. I know this is a thing which very much exercises the minds of the wool and cloth merchants in Bradford. It is not proposed that there should be any change at all, because the liaison which hitherto was directed to the Board of Trade will come to me. I hope that that satisfies the hon. Gentleman. I was trying to explain the difference between the relationship between myself and the cotton industry and the relationship between myself and the wool industry. The fundamental difference between them is that cotton is on public account at the moment and wool is not.

With regard to some of the metals which do not come to me, and which I can generally describe as being under the nationalised productive industries such as iron and steel and coal, while I shall be responsible for procuring the materials necessary for the manufacture of ferrous alloys, such as ores and concentrates—and, I am told, even soot for vanadium—the responsibility for the iron and steel, including matters of policy in the procurement of iron ore, scrap and other steelmaking raw materials, will remain with my right hon. Friend the Minister of Supply, working through the Iron and Steel Corporation, though to the extent to which such matters enter into the field of international negotiation in Washington I shall be acting in close collaboration with him.

As the White Paper points out, the Government have come to the conclusion that the only satisfactory arrangement in the case of iron and steel is that one Departmnet shall be responsible for the industry as a whole, and that any attempt to distinguish between the basic raw materials and iron and steel at different stages of fabrication would be artificial. In these circumstances, we have thought it best to make no fresh change in the responsibilities.

Mr. Peter Roberts (Sheffield, Heeley)

Do I understand that aluminium, nickel, cobalt, and that sort of thing, will come under the right hon. Gentleman, and that the procuring of the steel will come under the Minister of Supply? In other words, they are divorcing two very natural elements in steel making, which may not be very satisfactory.

Mr. Stokes

It is not quite as the hon. Gentleman puts it, but substantially the answer is: Yes, his definition is correct. I am not taking over the Iron and Steel Corporation. The Iron and Steel Corporation is responsible, under the Minister of Supply, for the duties I have described, and it is not at the moment thought that it would be advisable to make any change in the arrangement. As far as I can see, I shall have quite enough to do without tackling that at the same time. I do not believe that one can do that without taking over the whole industry, and to take over the whole industry would mean spending more time in this country than I deem advisable, having regard to the difficulty of procuring some of the rarer metals.

Mr. Aneurin Bevan (Ebbw Vale)

The consumption of the other ingredients in steel making will, in themselves, be determined by the steel-making capacity, which will in itself be determined by the availability of iron ore, cobalt, and scrap. If materials of that sort are under one Minister and the provision of materials of another sort immediately affected by the first under another Minister, there is likely to be confusion.

Mr. Stokes

I can see that point. I must say that I was fully alive to it when these matters were under discussion. It seems to me that the best arrangement is the one I have described. With regard to the scrap situation, in my view we shall have to spend less and less on scrap and more and more on other things as time Roes on. However, that is only a passing observation.

Mr. Jack Jones (Rotherham)

Will the position be that, as far as steel production is concerned, the Minister of Supply will retain overall control with the Iron and Steel Corporation of steel production generally, but the new Minister, my right hon. Friend himself, will be responsible for finding the molybdenum, cobalt, and so on. to make certain that the Iron and Steel Corporation has available to it all the alloys necessary for steel making? Will that be the position?

Mr. Stokes

That is absolutely correct. I could not have described it better. There is no intention to interfere with what I might call, indigenous products such as cement, bricks and china clay because there can be no advantage in making the transfer. The same applies also to oil which comes under the Ministry of Fuel and Power. In passing, I might add that diamonds and tobacco remain with the President of the Board of Trade.

May I try to give a short summary of the functions of the Department? It is, as was indicated in a question put to me a few minutes ago, my duty to ensure regular and sufficient supplies, whether on public or private account, both for the short-term and long-term requirements of industry as a whole. I have been frequently asked to explain precisely how I come into distribution. Fond as I am of bankers, I think that probably the best analogy I can use is the cheque analogy.

It is my responsibility, with the knowledge of what the total requirements are, which is decided upon, of course, by Ministers in settling the general programme, to produce, so to speak, the cake. The cake is then divided by the Materials (Allocation) Committee which has been in action under one head or another since 1939—there was a word about that at Question time in the House the other day. They decide how much of the cake is to be cut up in chunks for the various Departments who are responsible for the various sections of industry, and it is the responsibility of the production Departments to designate how much of each chunk goes to each particular firm or each particular industry in their charge.

It is my responsibility to see that the cheques drawn in favour of these Departments on me are honoured. I do not think that I can put it more simply than that. I know that it is not going to work out quite like that. for obvious reasons, but that is, broadly speaking, how it will all function. I think that it is going to be all right.

Mr. Edelman (Coventry, North)

May I ask the right hon. Gentleman, for the sake of clarity, if he will specify what the size of the cake is to be?

Mr. Stokes

That is a matter for a very high policy committee which is nothing more or less, of course, than the Government. The Government decide on the total plan. It is not as if we were suddenly starting off to organise the industry of 50 million people, or about that, because the Census is not yet out. From the records existing in the Departments, it is known what industry consumes of different materials now; that is well known by the various Departmental Committees. There is no difficulty in arriving at the amount of material that is required.

The difficulty is, when we cannot get enough, to know how we are to divide it. Surely this adage—if it is an adage—is a perfectly true one, that one cannot have enough unless one has too much. Everyone in industry knows that. We have never got enough unless we have got too much, and when dealing with materials in short supply, we have to put up with the fact that they are in short supply, that we are not going to have enough, and that there has to be a division of the cake.

Having been told what is required, I shall do my best to acquire a cake that is rather larger than has been stated, but in the process I may fail to do so, and then it is for the Materials (Allocation) Committee to decide how much of the smaller cake is to be divided in favour of the various Departments and for the sub-division and honouring of the cheques thereafter to be done in the way I have described.

On the short-term, day-to-day, problems when industries and particular sections of industries go short of small amounts, and so on, they will continue to look to the production Departments for their immediate help. I, of course, shall be responsible for price control to ensure that prices conform generally to the policy as a whole.

The important part of the work of my Ministry will obviously be both the conservation of material and the development of other resources and of alternative methods. I shall naturally co-operate with the Natural Resources (Technical) Committee and the Department of Scientific and Industrial Research, where, I think, a tremendous amount can be done. I propose to make the maximum use of the practical knowledge there is in those two bodies. The examination of alterna tives is, of course, a long-term project, involving, in many cases, considerable capital outlay. That is specially so—and those who know about ores will bear me out—as regards ores particularly from overseas, which are becoming more and more difficult to get and lie deeper and deeper. That gives me as a mechanical engineer food for reflection which has nothing to do with the job that I have at present.

Alternative methods and uses are very much bothering those of us who have to make use of such things as lead and zinc. It has always seemed to me absolutely absurd that we should waste the amount of zinc that we do on galvanising. When people realise that lead and zinc are likely to be in permanent short supply, the sooner alternative methods are found the better for everybody. According to statisticians, at the present rate of consumption there is only 14 years' proved supply of lead in the world and 21 years' proved supply of zinc, so the quicker the technicians and people who understand these chemical processes get on with the job of finding alternatives the better for everybody.

I think that it will be my responsibility to see that there is economy in the use of all these materials while, at the same time, it will continue to be the individual responsibility of the production Departments to use their best endeavours to see that there is no waste or abuse by the consumers. It will be my responsibility to look after both home and overseas development so far as they affect materials under my Department, and to give help where necessary.

Mr. Bevan

I am sorry to interrupt my right hon. Friend, but we should like to be assured that he will have enough power to carry out the duties he is undertaking. For example, will he have power of exploration in this country? Will he have power to enter upon land; will he have power of boring; will he have power of development, if that is not done by private enterprise, because, as my right hon. Friend will recollect, that has been a matter of consideration, and it is not certain that enough physical exploration by modern methods has been done in Great Britain?

Mr. Stokes

I am obliged for the interruption. I am going to tackle that job. We deliberately left the question of exploration, etc., out of the Bill, because it would complicate it unnecessarily, but I am advised that if I have not the powers to do what is necessary, not very much difficulty will lie in the way of my acquiring them, and it is my intention that I should do so.

Mr. Walter Fletcher (Bury and Radcliffe)

As the right hon. Gentleman referred to overseas development, will he say what the relationship is to be with the Colonial Development Corporation?

Mr. Stokes

I am coming to that matter in a minute.

The House will expect me to give a summary of my recent visit to Washing. ton. My object in going there was to make personal contact with people in the American Government and with the various representatives of other nations, who are sitting on this International Materials Conference. My own view is that it is practically impossible to deal effectively with problems of this kind unless one knows what the other chap looks like, what are his reactions and vice versa. That has been a guiding principle in trade, as many hon. Members will agree from their experience.

My main object in going there was to make these personal contacts and it was not, so to speak, with the idea of producing a rabbit out of the hat. I had a most friendly and co-operative reception all round. I found among responsible people an understanding of the urgency of keeping materials flowing to us through the pipe line and not allowing them to lag behind into the latter half of this year; and an outspoken determination to do everything possible that could be done to help us.

I am most grateful to our friends across the Atlantic for the reception given to me. It will be within the knowledge of everyone that this International Materials Conference does exist. It was initiated as a result of the visit of the Prime Minister in December last year, and it consists of a central committee numbering 10 and seven other committees, which deal with the main materials which are in short supply. They are dealing with scarce materials, and it would be quite stupid to expect that a series of committees of that nature, after only three months working, would arrive at agreements and decisions in next to no time. It is the considered opinion of responsible American officials in Washington, as, indeed, it is of our representatives over there, that no very great decisions can be expected until those committees have all reported back to their own Governments, which they have got to do and have had answers back again, which means that the effective operation of the committees cannot be expected until the fourth quarter of this year.

Our American friends are very much alive to our problem. I discussed it with Mr. Wilson and Mr. Gibson, and they are determined that arrangements shall be made to ensure that supplies go on, as indeed was made clear in Mr. Wilson's directive, where he set out the principles designed to assure supplies of scarce materials to the United Kingdom and to the Allies.

Mr. Ellis Smith

Is it a fact that the Minister said in a public speech that it would be optimistic to expect any direct results to accrue until the end of this year, and, if so, is that considered a satisfactory arrangement in view of the serious position?

Mr. Stokes

I am trying to explain the workings of these committees. I said the other day—I do not know where I said it, but I have said it several times—that the work of the committees cannot come into full operation until the necessary data has been worked out and verified, and until they have had their recommendations approved by the various Governments.

I was going on to explain that our American friends had assured me that they would do everything possible, quite regardless of how soon these committees function, to see that we get sufficient supplies very largely based on the examinations which these committees are making. Anybody who knows anything about international committees—this is my first shot at them—will know that they are not terribly speedy at operating. I am coming to the details of some of them in a minute. I should like to make it quite clear that arrangements have been made to ensure that the necessary supplies of essential materials, which come from the other side of the Atlantic, will be made secure for us.

Here may I pay tribute to the help afforded to me by our Ambassador in Washington. As a commercial traveller, I have had some experience of ambassadors in my life-time, and I can say quite fairly that I have never come across anybody with a better idea of the overall economic problem and the needs of industry than has Sir Oliver Franks, and I am most grateful to him for all the help he gave me during my visit there.

In his directive, Mr. Wilson describes this scheme as A part of a wider give-and-take among the Free Nations. His Majesty's Government welcome that declaration. As for the actual results in Washington I should like to mention one or two details about the committees which may be useful to the House. Sulphur is to us at the moment probably the most important material, and that committee has made giant strides. It is almost on the point of final conclusions and is a great deal ahead of some of the other committees. A final decision has not yet been reached on the third quarter's allocation, but I see no reason whatsoever to alter my conclusion that we shall not receive enough to meet our essential requirements, which is what I said immediately on landing from Washington a month ago.

Mr. R. S. Hudson (Southport)

Did the right hon. Gentleman say that we would not receive enough supplies?

Mr. Stokes

No, I said we certainly shall receive enough for our essential requirements.

Mr. Hudson

The right hon. Gentleman said the opposite.

Mr. Bevan

No, it is two negatives.

Mr. Stokes

I am sorry if I misled the right hon. Gentleman, but I am not very fond of notes because I cannot read.

We shall receive enough for our essential requirements. The provisional allocations of tungsten and molybdenum for the third quarter have been put before the Governments concerned for approval, and assuming they will be accepted, as I believe they will, there will be sufficient to keep us going, but we are not going to get as much as we would like. The important thing, I believe—I laid great emphasis on this as well as spending some time on it—is to see that we get a provisional allocation so as to ensure that there are supplies flowing to us immediately, even though they will not be of the total amount which we wanted.

Pulp and paper come over to me under this Bill, and the committee dealing with these materials has been very successful in making emergency allocations to certain countries, some of which are desperately short of newsprint.

Cotton is, of course, vital to us, arid I do not think I need say more about it now, because so much depends on the weather and all the rest of it. The anticipation is that the Americans will have a crop of over 16 million bales, and already they have made an allocation for export of over 2½ million bales, which is quite considerable.

Iron ore shipments are vital to us now, more especially in view of the shortage of scrap. I was able to make representations to the right persons there with a view to doing what the Americans call "de-moth balling" some of their ships. The "de-moth balling" process is going along quite speedily, and we are getting very considerable help already from American shipping by lifting cargoes on the way home from the Mediterranean and bringing them to these shores. Arrangements are being made for the shipment here of ores from Newfoundland. The ore shipments into this country will be of a considerable amount in the next month or two.

I shall say a word or two about what is going on in America, though it has not a direct bearing on the Bill except as affecting the amount of allocations which they make to us. It may clear up misconceptions about the generosity of our friends overseas. While we have not got all that we want, and I do not propose to let go until we have, it is clear that the Americans are making a gigantic effort. They found what other nations have found. They set out with a 150 billion dollar programme, to be fulfilled in two years. They found it impossible of fulfilment, so they are spreading it over three years, which will considerably help to relieve the pressure. They are greatly increasing their home raw materials supply, for example doubling their aluminium output and putting their steel output up by 18 million tons, which is two million tons more than we produce in this country.

The cuts which have been made in their economy will, by the end of this year, reduce civilian consumption by somewhere about 35 per cent., in motor cars, television and radio sets, and a wide range of hard goods.

Mr. Harold Wilson (Huyton)

How does that percentage compare with the 1949 cuts?

Mr. Stokes

I do not think I can do the percentage backwards. I do not know. I will try to find out. The 35 per cent. cut will be effective before the end of this year. While I was in Washington, Ford's motor works stood off 10,000 men as a result of the curtailment of supplies for motor car equipment.

Let me say, to clear up some of the misconceptions that seem to be trotted out in the country about the Americans aiming at increasing their overall production, that so far as I understand it they are not aiming at a greater increase than 5 per cent. per annum for the next three years. That is much the same as our objective. I do not see that there is very much to be anxious about on that score. Our own production for the first few months of this year is a little bit more than it was. It is of the order of 4 per cent.

I come to another vitally important point, the increase in the production of raw materials within the Commonwealth. His Majesty's Government have recently proposed to other Commonwealth Governments that a meeting should be held later this year between representatives of Commonwealth Governments to consider problems connected with the production and supply of raw materials and manufactured goods. The Colonial Empire would also be represented. I hope that this announcement will be welcomed by everybody in the House. I am sure it will be very much welcomed across the Atlantic.

I do not know whether I have covered the ground sufficiently to satisfy hon. and right hon. Members, but I want to say, in conclusion, that this is not simply a short-term problem. Although the short-term problem is vital to us, there is a much more important and much wider issue. There is no permanent cure for the Communist menace by force. There is no such way out, although we may deter it for the time being. The longterm cure is the steady improvement in the standard of living of the masses of the people everywhere. That surely means better use, better availability and better distribution of essential raw materials.

I do not think I can end better than by quoting something which has always been close to my heart. It is from a letter dated 21st December, 1940, at the beginning of the war, when the whole problem of what was to happen when peace broke out was very much under the consideration of those who were not prepared to accept the war aims as an end in themselves but only as an end for the purpose of peace aims to ensure the peace of the world for the future.

This is a quotation from a letter which was published in "The Times" on 21st December, 1940, and was signed by the leaders of all the Christian Churches in this country. The point that struck me was this: The resources of the earth should be used as God's gifts to the whole human race, and used with due consideration for the needs of the present and future generations. Ultimately, that plan will have to be carried through to its finality if we are to procure peace for all time, by the development of our manufacturing capacity to bring up the standard of living of the people everywhere, so that peace may prevail. What we have now I sincerely trust and hope is a contribution to that end.

5.5 p.m.

Mr. R. S. Hudson (Southport)

We have listened to a very pleasant speech, and we have had the great advantage, which the right hon. Gentleman and his hon. Friends do not possess. of being able to watch the faces behind the right hon. Gentleman as be talked about queen bees taking the cheques. The real thing that emerges, and which I hope to illustrate in detail in the course of my remarks, is that practically nothing suggested by the right hon. Gentleman that he was going to do or that was desirable to be done could not be done quite well without the Bill.

The right hon. Gentleman talked about going overseas. I hope to show that although he said he learned in Washington about the desirability of being able to control the raw materials situation, that idea is not carried out by the terms of the Bill. I should have thought that when the right hon. Gentleman was moving the Second Reading of a Bill of this kind he would have been at some pains to give us a clear statement of the existing machinery for the procurement and allocation of raw materials, and to tell us the basic assumptions underlying the existing machinery, and why, in his opinion, or in the opinion of the Government, the existing machinery had failed. Clearly, it is a confession of failure of the existing machinery that the Government should have to bring this entirely new Ministry into existence. [HON. MEMBERS: "No."] I should have thought they would have explored at some length the alternatives to this scheme.

The provision of raw materials in adequate supply, both public and private, is of supreme importance to our survival —I put it as high as that—over the next few years. From that point of view it transcends party, and ought to be considered by the House as a Council of State. I hope I shall be able to present the matter from that point of view, although I may not altogether be able to refrain from the temptation of dotting the "i's" and crossing the "t's" of the various suggestions and plans which it has been my lot to put forward from this Box in recent months.

On this side of the House we welcome what the right hon. Gentleman said about the conference which is to be called to see what can be done about increasing the supplies and the production of raw materials in the Commonwealth. We welcome particularly what he said he had found at Washington, namely, a realist approach to our problems. That means there is a realisation of a necessity to keep supplies running and an outspoken determination to do everything possible to help us. I am sure that we welcome that, and I am very grateful to the right hon. Gentleman for making it clear, because it disposes to a great extent of the allegations which were made by the recent Minister of Health in the speeches following his recent resignation.

Mr. Bevan

The words are there, but what of the facts?

Mr. Hudson

We will leave it to the right hon. Gentleman to "scrap" later. Anyway, it is clear that the Lord Privy Seal holds very different views about the help that we are getting and are likely to get from United States from those of the right hon. Member for Ebbw Vale (Mr. Bevan) and his friends, judging by what they said a very short time ago.

I began by saying—I hope I shall not be accused of undue party prejudice in this—that the fact that the new Ministry is being brought into being is a confession of failure in the past. Everybody knows that three years ago the raw materials side of the Ministry of Supply was inadequately organised and that an undue burden was placed on that organisation by the necessity for setting up and putting through the scheme for the nationalisation of steel. That was one of the fundamental reasons for the now admitted failure to provide this country with adequate supplies of raw materials immediately before and after the outbreak of war in Korea last year.

If we assume that failure, as I think the Government do. the question arises: What is the best alternative method to adopt and the best alternative machine to set up? Frankly, we doubt whether this is the only or, indeed, the best alternative. I take it that the right hon. Gentleman would agree that, although he stated that it was not a temporary Measure but a permanent Measure, looking some time ahead, he had in mind a permanent Measure for peace-time and that he would be the first to admit that in the deplorable event of the cold war turning into a hot war this machine would not fill the bill and a different machine would have to be set up. I do not think that the right hon. Gentleman would dissent from that, and I will not think that anybody else would either.

If we confine ourselves to what is desirable in peace-time, one of the obvious alternatives would have been to take advantage of the right hon. Gentleman's appointment as Lord Privy Seal, a Minister without Portfolio and without Departmentary responsibility, and to place him in the position of what the Americans would call "a trouble shooter," a man responsible not for the execution of decisions but for seeing that the right decision is taken among the various competing claims of different Departments.

In other words, it would have been possible to leave the legal powers of procurement. distribution and allocation as they stood but to put the right hon. Gentleman in an over-riding position to see that the decisions were arrived at on the right lines. If any difficulty arose, he would have been available to go to the United States, as he did recently, or elsewhere. accompanied—all of us who have had experience of this will appreciate the need—by all the necessary experts from the various Departments, and could have carried out all the functions which he illustrated to the House as being his present intentions. I am sure the right hon. Gentleman will not suggest to the House that if he goes abroad today he would be able to carry with him all the details relating to all the raw materials about which he will negotiate; he will take his experts with him. He could just as easily have done that without being an actual Minister of Raw Materials.

Another possible alternative in which he could undoubtedly have used his great powers would have been as a deputy for the Chancellor of the Exchequer as Chairman of the Inter-departmental Committee on Raw Materials, whose scope could quite easily have been enlarged. I believe it was the Chancellor of the Exchequer who, in answer to a question of mine—

The Chancellor of the Exchequer (Mr. Gaitskell)

It was the Prime Minister.

Mr. Hudson

I beg the right hon. Gentleman's pardon. It was the Prime Minister who gave us a list of the raw materials with which the Chancellor's Committee is dealing at the present time under the chairmanship of the Economic Secretary. It seems to us to be a comparatively short list. It consisted, so the Prime Minister said, of sheet steel, tinplate, softwood, sulphur and sulphuric acid. As the right hon. Gentleman has said, there are masses of other raw materials in short supply which have to be allocated between various Government Departments, and we believe that that was a possible alternative.

The third alternative would have been to appoint the right hon. Gentleman as the chairman of a committee responsible for all industrial production, except matters of labour, where he would again have been in a position to see and deal with bottlenecks as they occurred. All of us who had any experience during the war, and who know what is happening today, are aware that bottlenecks continually occur which could, with advantage, be settled by someone without any Departmental responsibility.

Any one of these alternatives would have provided the sort of job for which the Lord Privy Seal, a Minister of State, or a Minister without Portfolio exist. It is clear that the right hon. Gentleman could have performed all the duties which he mentioned in his speech if he had been merely Lord Privy Seal in any one of those jobs, but the decision which has been taken makes him a purely Departmental Minister. I should say, without disrespect, that it reduces him to the level of a Departmental Minister compared with his position in the Cabinet and the Government, historically at all events, as Lord Privy Seal.

As far as raw materials are concerned, it makes him nearly a "Strauss junior," and his Department will cut off the supply of raw materials from the Department which uses them and is responsible for ordering the goods which are made out of the raw materials. We believe that this will inevitably—certainly the right hon. Gentleman gave no reason in his speech for our not thinking so—increase friction and delay and the number of Ministers with whom the unfortunate manufacturer has to deal.

The right hon. Gentleman said that one of the advantages of the present layout was that all raw material questions would be dealt with in one place instead of several places and that the manufacturer who wants to use one of these raw materials will, presumably, have to go to only one Minister instead of several Ministers; but that is not the case under the Bill and according to the White Paper. I will give an instance of this. My right hon. and hon. Friends will give others during the debate, for there are plenty of instances.

Let us take the case of phenol, an essential component of synthetic resin, which is used in many essential re-arrnament manufactures, including brake linings and grinding wheels, and in the aircraft industry. Phenol comes from two sources. Natural phenol is a coal tar by-product which is controlled at the source by the Ministry of Fuel and Power. Synthetic phenol is a product of benzol and sulphuric acid. We are in any case seriously short of this product. We are trying to get from abroad as much as we can and I gather that import licences are being granted freely, but, even so, we shall be hard put to it to get sufficient supplies from abroad for our own home domestic need, including our exports.

Four Ministries are now to be involved in this one essential commodity: the Ministry of Fuel and Power, in respect of natural phenol; the Board of Trade, in respect of resin allocation; the Ministry of Supply, as the sponsoring Department for most users of resin—for example, in the engineering industries; and now, the Ministry of Materials, through sulphuric acid, which is an essential element in its manufacture. It simply is not the case —I am sorry to have to express it so bluntly to the right hon. Gentleman—that as the result of the setting up of this new Department, manufacturers will find raw materials dealt with in one place instead of several.

The Minister's personal position also is far from clear. The Chancellor's Committee, as I understand it, is presided over by the Economic Secretary to the Treasury, a junior Minister. A new representative, representing the Minister of Materials, is to be added to this Committee. To that extent, the Lord Privy Seal is to he subordinate to decisions taken—

Mr. Gaitskell


Mr. Hudson

I am glad to have that denial. Let us see where we get to now.

Mr. Gaitskell

I do not want the House be confused about this. The Raw Materials Committee, over which my hon. Friend the Economic Secretary at present presides. was originally set up in 1939. I am not quite certain, but I fancy that its first chairman was the then Colonel Llewellin. who was at that time Parliamentary Secretary to the Ministry of Supply. It has frequently had a junior Minister as chairman, but nevertheless its decisions have, I think, been generally accepted by other Ministries throughout. There is no change so far as that is concerned.

Mr. Hudson

It was never under the Chancellor of the Exchequer in the shape of deciding the economic policy of the Government, as it is today. In any case, what is to be the position supposing the Lord Privy Seal does not agree with the decisions of the Economic Secretary? In my experience—I do not believe human nature has altered much in the last six years—it was very often the case that Ministers disagreed with what was decided by committees on which their Ministries were represented.

The Lord Privy Seal is now to be in a rather favoured position, because the Minister of Supply is an ordinary Departmental Minister outside the Cabinet. The Lord Privy Seal is not only a Departmental Minister, as Minister of Materials, but is also in the Cabinet as Lord Privy Seal. It seems to me that this again. human nature being what it is, will cause a great deal of friction. The position really ought to have been the other way round, and the Lord Privy Seal ought to be protecting the decisions that the Economic Secretary makes.

Speaking of when he went abroad, the right hon. Gentleman said that the overseas representative of this country in these international negotiations—I presume he was referring to himself—should have under him the whole range of raw materials and should have authority to speak in respect of all those raw materials.

Mr. Gaitskell


Mr. Hudson

I agree. If the alternative I have suggested had been adopted—namely, that he was chairman of one of these committees; a sort of "trouble shooter," or the general representative of all Government Departments—that is precisely what he would have done. But under the layout of the Bill and the White Paper—we are dependent on the White Paper for our information on the intentions of the Government—that is not what he will be. He will be abroad in respect of some raw materials, both as the procurer and allocator. In respect of other raw materials—I need not go through the list—he will be the procurer but not the allocator. And in respect of a third range of raw materials, he will have no responsibility at all. Therefore, far from speaking with authority covering everything—[Interruption.] We can only go by the White Paper, which shows that he will not speak with that same authority in respect of all the raw materials.

Mr. Stokes

indicated dissent.

Mr. Hudson

It is no good the right hon. Gentleman shaking his head. If he reads his speech tomorrow in HANSARD, he will find that he committed himself to that statement and that my statement as an analysis of the White Paper is correct.

Now, I proceed to the White Paper itself. I am bound to say that it is filled with anomalies. It starts by saying that it is desirable—and we all agree—that in general the raw materials should be controlled right up the line by the Minister who is responsible for their allocation. The White Paper then talks about the special case of iron and steel and says: As far as iron and steel are concerned. the Government have come to the conclusion that the only satisfactory arrangement is that one Department shall be responsible for the industry as a whole, and that any attempt to distinguish between the basic raw materials and iron and steel at different stages of fabrication would be artificial and cause serious inconvenience. But two of the basic raw materials in the manufacture of steel, certainly of a great deal of the high speed steel and the special steels that are required for rearmament—are molybdenum and tungsten, and for those two items the person responsible is to be the Minister of Materials and not the Minister of Supply.

Why is the right hon. Gentleman to take over molybdenum? I have been puzzled to find a reason. It cannot be that, as he suggested, there are a multiplicity of countries of origin and countries of supply, because the sole provider of molybdenum for this country is the United States.

Mr. Bevan

That is the reason why my right hon. Friend is in charge.

Mr. Hudson

If the Government say that the right hon. Gentleman must have molybdenum because he is the right chap to send to New York, what happens to the Minister of Supply? Why should not the Minister of Supply go to New York? The only conclusion we can draw is that the Government think—I apologise to the Minister of Supply—that the Lord Privy Seal is a very much better negotiator than the Minister of Supply. Even if that be true, I still think that the division is wholly illogical.

The same thing. of course, applies to ferro-alloys. If the Minister of Supply is to be responsible for all the ferroalloys and the light fabricated industry. why should he not be also responsible for the raw materials for those alloys and that industry? There is no logical reason for cutting off raw materials and treating them as being in a separate compartment, leaving the Minister of Supply without any responsibility for getting the raw materials and yet responsible to the Government and to the country for seeing that the essential armament orders are placed and that the essential supplies on which our life depends are delivered.

The Government are cutting off the procurement, cutting the whole system into two; making one man responsible for the procurement of raw materials and the other man responsible, without any power, for seeing that the manufactured Goods are delivered. Qute clearly, in our view, other things than human nature and the two personalities being equal, the existing system, with an overall "trouble shooter." would have been greatly preferable.

The same thing applies to raw cotton and wool. The Raw Cotton Commission are the people who have been specifically set up to provide raw cotton, and with the solitary exception of the United States—I admit that it is a very important exception—the Raw Cotton Commission are going round the world buying up supplies of cotton. And I think it was the right hon. Member for Huyton (Mr. H. Wilson) who, in a debate before he left the Board of Trade, went out of his way to say how successful the Raw Cotton Commission had been in finding alternative sources of supply when the allocation from the United States was cut so drastically.

So, therefore, over the whole range of the world the intervention of the Lord Privy Seal is entirely unnecessary and the only thing left is negotiations with the United States Government. Quite clearly any negotiations with the United States Government—I say this from a personal point of view—could just as well be conducted by the President of the Board of Trade, who gets on extremely well with the people in the United States, as by the Lord Privy Seal. There is no inherent reason for adding a fifth wheel to the coach. It would be just as simple and much better to leave the procurement of raw cotton and its distribution and use entirely, as at present, in the hands of the President of the Board of Trade. And the same thing mutatis mutandisapplies to wool.

I invite the attention of the House to one point about paragraph 11. It is stated: The Board of Trade as the appropriate production department will retain their responsibilities for all matters affecting… the production of rayon.… There is no qualification at all. The Board of Trade will remain responsible for all matters concerning the production of rayon and other synthetic fibres since this is a manufacturing process. Actually that is not true, because one of the essential details, one of the steps in the manufacture of rayon, is the use of sulphuric acid; and the Lord Privy Seal has already told us that he is to take over responsibility for sulphuric acid.

Mr. John Lewis (Bolton, West)

The right hon. Gentleman is blinding the House with science, and confusing chemical production with production. He got away with it a few moments ago, but he cannot go on putting the same thing over and over again.

Mr. Hudson

It depends on whether one has any regard for the meaning of the English language. It states they will remain responsible for all matters—

Mr. Lewis

Concerning production.

Mr. Hudson

Concerning the production of rayon; and as one of the essential elements in the production is, as everybody knows, sulphuric acid—

Mr. Lewis

It is a raw material.

Mr. Hudson

I am not denying what the hon. Member says. I am only saying what is in the White Paper.

Mr. Lewis

It is a question of interpretation.

Mr. Hudson

It is not. It is a question of the use of words.

Now I turn to paragraph 17 and I invite the hon. Member to read that. If he can make any sense out of it he is more clever than I am, and a good many of my hon. Friends on this side—[Interruption] If hon. Members are not careful I will read the paragraph out to the House, and then they will realise. The fact of the matter is that the setting up of this Department has caused complete confusion over a wide range of allocations of these raw materials. If hon. Members doubt it, let me read this sentence: The general principle will, however, be that the broad allocations of materials among the various classes of users will be decided through the inter-Departmental arrangements which have existed for the purpose since 1939 and for which the Chancellor of the Exchequer is responsible "— that, I suppose, is the Economic Secretary's Committee— as part of his function of co-ordinating economic policy, since the broad allocation of scarce materials is a decisive factor in determining the shape of the economy. Where it is necessary to make detailed allocations to individual firms within these broad allocations they will be determined by, or on the advice of, the Departments concerned with the particular uses "— and so on. That presumably is the Board of Trade and the Ministry of Supply. What it really says is: Where it is necessary to make detailed allocations to individual firms within these broad allocations they will be determined by the Ministry of Supply and the Board of Trade. It goes on: In respect of the materials for which the Ministry of Materials is responsible, it will he for the Ministry to initiate schemes for effective allocation.… In one sentence it says that the allocation of raw materials to individual firms is to be the responsibility of the Ministry of Supply and the Board of Trade, and in the following sentence it says that the new Ministry of Materials is to be responsible for these allocations. It may be just damned bad drafting—[HON. MEMBERS: "Order."]—but it certainly does not correspond with what the right hon. Gentleman told the House just now.

This White Paper talks about substitutes and says that the Minister is to be responsible for providing and discovering substitutes. Well, why? Surely all the experience both in this country during the war, and in the United States during the war and since, is that it is the manufacturers mainly concerned who do the research and everything else. They are the people who have the greatest possible incentive to invent substitutes and, when they have been invented, to use them and develop their use. Indeed, if there is any doubt about that, I would quote from the statement in the Bulletin of the Economic Section of the Treasury as late as February, 1951: It is very difficult for the outsider to say how far, if at all, substitutes can be found in any particular process for the material which is short, and the firm which can find substitutes will be less hard hit. Therefore, there seems no logical reason why this Ministry of Materials should make itself responsible for substitutes, instead of leaving the job mainly to the industries.

Mr. Stokes

May I make myself clear? The right hon. Gentleman apparently did not understand what I meant to say. I did not mean to say that everybody would down tools and stop looking for substitutes. I meant that it would be my particular responsibility to stimulate people to greater efforts in their search for substitutes—to encourage them.

Mr. Hudson

I am very glad indeed of the correction, but does it need a new Minister of Materials to do that? The proper people would be the existing President of the Board of Trade and the existing Minister of Supply—if the right hon. Gentleman had any confidence in his colleagues. There might occasionally be some bottle-neck about which he might stir things up, but it is not necessary to have a Minister of Materials in order to achieve what the right hon. Gentleman has said he proposes to achieve.

The right hon. Gentleman said that the total additional staff will not be more than 100. I dare say that is true so far as his Department is concerned, because he is going to take over all the people at present engaged in doing that work. But it is not possible to leave Departments like the Board of Trade or the Ministry of Supply without all the people who have been engaged in procurement and allocation, and leave a complete blank. A great number of those people have also been engaged in the placing of orders and in the wet nursing of a particular industry; and whether the right hon. Gentleman likes it or not, the net effect of this is bound to be some increase in the staffs of the two Departments to fill the gaps which the taking away of these other persons will inevitably leave, even if they are taken away only to do the work of procurement they have hitherto been doing.

The right hon. Gentleman prayed in aid his conversations with the manufacturing associations and the F.B.I. I have not had the advantage of knowing about those conversations, but I should be prepared to guess that when they took place with the F.B.I. and trade associations, the question was not put to them "What would be the ideal arrangement?" I should guess that none of the alternatives I have mentioned was put to them. The question put to them was "Assuming the set-up—the new Ministry of Materials—how can we operate it with the least friction?" I have no doubt that, with a view to reducing friction as much as possible, the industries made suggestions and agreed to certain alterations. That is a very different matter. I believe that if the associations were asked—I have no correspondence with them and I am speaking entirely from my general knowledge—whether this was the ideal arrangement, there would not be anything like the unanimity which the right hon. Gentleman led us to believe was the case.

If I might sum up, I would say that in our view this new Department does not simplify our peace structure and it certainly is not setting up a machine which will be adequate in case of war. We believe that, in spite of the gifts of the right hon. Gentleman, it will create further problems of tension between the Departments, more inter-Departmental committees or at least larger inter-Departmental committees—I do not think that the Economic Secretary would dissent from that. It will make the whole machinery of economic government more cumbersome than it is today.

We believe that the ideal solution would be to give much more power and work of allocation to industry. We believe it ought to be possible to delegate much more power. We believe that the present advisory committees in industry are little more than a sop to industrialists' pride. There is no reason why an industry should not set up machinery for the allocation within that industry of supplies of such raw materials as are available. It has been done successfully in the case of steel. We believe that the advisory committees should be strengthened and, if necessary, given executive responsibility. We believe that if those steps were taken, together with the appointment of the right hon. Gentleman as an overall "trouble-shooter," we should get a great increase in flexibility and in the provision and distribution of the raw materials on which our economic future depends.

5.43 p.m.

Mr. Ellis Smith (Stoke-on-Trent, South)

The people of our country have a great task, they are making great efforts now and it behoves us to do all we possibly can to support and encourage those efforts. It is those who are engaged in industry who are, in the main, saving our country and it behoves those of us who are not directly engaged in industry to do all we possibly can to provide machinery that will facilitate the best results. Therefore, while I share the uneasiness which exists in industry about this Bill, I hope it will be made a success.

I wish first to make a brief analysis of the White Paper and then to ask some questions to which I hope I shall receive answers from the Chancellor of the Exchequer, who I understand is to reply to the debate. I ask the Minister to turn to paragraph 2. So as to save time, I shall not quote it. All I wish to say is that in my view it is a step forward, and there is certainly a great field for action. Turning to paragraph 11, I wish to ask whether this arrangement is considered to be satisfactory? Will it avoid overlapping and duplication.

In paragraph 16, we find that The Board of Trade will remain responsible for china clay, diamonds, and tobacco. I believe in there being one voice and one responsibility in Departments, but at the same time I admit that I am uneasy because one of our best exports in this country, speaking relatively, is china clay and the products made from it. Had my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) been present, he would have agreed with me, because I know that the chairman of the board of the china clay concern and the people in that district expressed to him great concern about the lack of shipping at their disposal for some time in connection with the export of their china clay to the United States and elsewhere. Therefore, knowing the personality of my right hon. Friend, I can see that this position could result in a great battle for shipping. I hope that the exports that are bringing about the best results will receive priority in shipping.

Turning to paragraph 17, I wish to ask whether experience has proved that these proposals will be satisfactory. In view of the provisos contained in the paragraph, was a new Ministry really necessary? Then there is later in paragraph 17 a passage which I must quote because of its importance. It is: Where it is necessary to make detailed allocations to individual firms within these broad allocations they will be determined by. or on the advice… I can break off there and go on to the words that I am very concerned about that these detailed allocations should be determined. I wish to ask a question to which I expect a reply tonight, because those who have great responsibility in industry should not be put in the uncertain position in which this puts them. How will that be operated? Will it always be operated in the national interest and will it be operated by allocating where it will bring about the best results.

Those of us with some knowledge of industry and who have been engaged in industry know that many concerns have to plan two, three and four years ahead. Turbines, generators and big plant of that kind cannot be manufactured without planning well ahead and without the knowledge that the required materials will be available as each operation is carried through. That is one of the most important factors in maintaining labour morale, especially in big-scale industry—to keep the men going. Nothing is worse than working as hard as one possibly can and then suddenly finding oneself without the required material at one's disposal. In addition to that aspect, it seriously affects the cost of production. We must have a guarantee tonight about the position of any concern which has to plan two, three or more years ahead. They deserve confidence because of the responsibilities they accept.

In addition, there is the important question of delivery dates, which is now one of the most important factors in the carrying out of a contract. When the world battle for trade begins again, as it will, the question of delivery dates will become more important still. I was very pleased to hear my right hon. Friend repeat time after time that this is a long-term problem. I thoroughly agree with him. Therefore, I know he will agree with me that this question of delivery dates must be taken into consideration in building up the machinery for which he is now responsible.

Will this new machinery result in increased efficiency? That should be the test in these times. Everyone engaged in industry is now measured, from management to the most humble person serving in industry. Unlike many other people, their output and service is measured. Therefore, the test of legislation passed in this House should be, will it lead to increased efficiency? Will it lead to resolute decision and resolute action in the national interest in allocation?

Is there already a list of priorities? If so, will the allocation be made in accordance with the national interest? Will a Departmental allocation be satisfactory? We all know that friction exists and we are not blaming anyone because, wherever men are assembled, if they are worthy of the name of men, friction is bound to arise from time to time. What we have to do is to reconcile the differences. Will this new Ministry tend to eliminate the friction and reduce it to the minimum? Will it lead to simplification of administration in industry? A great deal will depend on the answers to those questions.

I know that the Minister will smile at this, but I hope that, unlike a right hon. Member many of us remember, he will not allow himself to be put into the position of the chief co-ordinator of the co-ordinators. Is it right that our stocks of zinc, copper, lead and tin are now dangerously low? Seeing that we have planners advising leading Members of the Government, what about their responsibility in regard to that? Are our aluminium supplies safeguarded for some time? The Minister repeated today that it would be optimistic to expect any big decisions from the International Metals Conference this year.

Mr. Stokes

I must correct that. What I said was that with this wide range of committees, covering a considerable number of substances—and nations as well, all of whose agreement is required before there is any finality—it would be wrong to expect decisions right through the range within a year; but I went on to say that two or three committees have made very rapid progress and are on the verge of ultimate decisions now.

Mr. Ellis Smith

I am pleased to hear that and I thank my right hon. Friend for that further elaboration and elucidation. There is not very much between us; it is only a matter of degree. It is constantly pointed out by leading world representatives that economically and in the military field there is great urgency about the position. If there is great urgency one would expect more urgency on these committees and in their decisions. How long have we been pressing for decisions. Have we been pressing for three years, is it two years, or is it one year? We are entitled to know today what is our record in pressing for decisions on the international allocation of essential raw materials.

Is it correct that an International Rubber Conference was held about five months ago, that it adjourned and met again three months later, again failed to agree, and once more adjourned? Is it correct that six commodity committees which met in Washington failed to make much progress and that there was complete deadlock on allocation on need and merit? If so, can we be told who was responsible for this disagreement?

I ask the Minister whether he has read the Report of the United Nations Scientific Conference on the Conservation and Utilisation of Resources, which, in my view, is one of the best documents of its kind ever published? It would be interesting to know how many Members of the Government have read that Report and what action has been taken about it. I was provoked to ask that question because of what I see going on. The Report states: History has been marked by an appalling misuse of resources and the time has arrived when the world can no longer afford that. We have a right to expect the Government of our country, no matter of what colour, to be taking action in the international field in this matter. The Report points out the urgent need for substitutes. I have never forgotten the great lesson I learned in the Army of Occupation in Germany during 1919 and 1920. Critical as we may be of Germans, owing to their serious economic position they did get down to the job immediately, and substitutes of all kinds were brought out within a short time.

I do not think the same drive has been put into the provision of substitutes in this country. A few weeks ago I was in the company of a very great friend of Britain from Australia, who expressed great disappointment to me because he had come over here with orders for thousands of pounds in his bag and was not able to fix one order but had to go to Western Germany to give the order for commodities wanted in Australia.

Having had the pre-war experience of asking question after question about certain concerns in this country, and, as a result of much reading and research since then, knowing who was responsible for holding back our country in the manufacture of essential commodities in those days, we are entitled to ask whether certain concerns in this country are still preventing industry and research from being applied to the provision of substitutes. With many minerals I know there is no prospect of immediately critical shortages, but there is a prospect of very serious long-range shortages of many minerals. I am not asking the House to accept my word for that; all that hon. Members need to do is go to the Library and ask the Librarian for the very fine document produced by the United Nations agency which has already made a world survey on this problem.

I ask the Minister whether he has considered that his duty will be to have a scientific survey of our country. Everyone knows that as a result of scientific methods of surveying we can now detect metals and minerals where they could not be detected in the past. By modern methods of aircraft detection and surveying this can be done, and I want to know whether it is being done over counties such as Derbyshire, Cornwall and North Wales and in other places where it is advisable.

I again refer to paragraph 2 of the White Paper. I consider that this country is going to be in a very serious economic situation for a very long time, and, relatively speaking, outside the Commonwealth few people care. It reminds me of the time when millions of our fellow countrymen were unemployed, and the same lack of feeling applies among outsiders when parents lose a son. I believe in the international allocation of raw materials. I believe that this should be organised through the United Nations agency, but I am sorry to say that that seems a long way off. Therefore, to use the language used by ordinary people in the areas we represent, we must "fend for ourselves."

Our people will welcome the announcement made today by the Minister that it is proposed to hold a Commonwealth conference to consider this question of materials. I know that the Minister is courageous— and I admire him for that— and that he has vision and drive. These qualities have been proved by his record. I want to ask the Minister if he will apply paragraph 2 in agreement with the Commonwealth. Will a survey be made throughout the Commonwealth? Other people have not acted fairly towards this country. There does not appear to be much sign of a change. Therefore, we should organise and work as closely as we can with our real friends and with those who are prepared to co-operate with us.

Mr. W. Fletcher

Will the hon. Gentleman be a little more specific when he says people have not acted fairly? That is a general accusation. What does he mean?

Mr. Ellis Smith

I did not want to be more specific, but I am prepared to be. I have no hesitation in naming the United States.

Mr. Osborne

Is the hon. Member saying that the United States have not acted fairly? Is not the hon. Member aware that the Minister said in his speech this afternoon that the United States had guaranteed us adequate supplies to keep British industry going, irrespective of the decisions of the committees which are being set up, and that, in order to do so, the Americans themselves had suffered a 35 per cent. cut in their own demands? Does the hon. Member say that is not treating us fairly?

Mr. Ellis Smith

I know what the Minister said; I have been here throughout the debate, and I listened to him with very close attention. I repeat that, in the main, considering we have been involved in two world wars and, considering the sacrifices made by the people of this country and the Commonwealth, other people have not acted fairly to us.

Mr. Osborne

Do you think Russia has acted fairly?

Squadron Leader A. E. Cooper (Ilford, South)

I am sure the hon. Member wishes to be fair. Is he aware that in the American chemical industry today there are a very large number of chemical factories that are completely shut down, because they cannot get the raw materials to keep their plants in operation?

Mr. Ellis Smith

I did not want to embark upon this—

Squadron Leader Cooper

The hon. Gentleman started it.

Mr. Ellis Smith

— but I have keen provoked into it.

Mr. Nabarro (Kidderminster)

It was an irresponsible statement.

Mr. Ellis Smith

If necessary, I will go further. Our real friends are the people of Australia, New Zealand, India and the Commonwealth. The people of this country are anxious to work in as close co-operation as possible with our friends in the Commonwealth in order to achieve the best results for all of us. If we take food and raw materials from Australia and New Zealand, our people will work as they have never worked before in order to ensure that the people of the Commonwealth receive what they require in return. If we take rich minerals from Rhodesia and other parts of Africa, our people will respond in a similar way to provide them with what they require from us. The same applies to minerals from rich India the great India—of the future, which now has an opportunity to develop itself without being held back as it has been for far too long.

Mr. Beresford Craddock (Spelthorne)


Mr. Ellis Smith

I welcome the announcement made by the Minister that it is proposed to call a Commonwealth conference. I hope it will be a great success. I am confident that the people of this country will respond to any proposals which arise out of that conference. I hope that the Minister will make a huge success of it. I want to ask the Minister what has prevented action being taken hitherto. The situation being so serious who has prevented that action? What Ministry or Ministries have pressed for action to be taken? Have there been any difficulties in producing this Bill? Has the powerful steering committee of the Permanent Secretaries considered this matter? If so, when and how often, and what have they reported?

In the years 1937 and 1938 I served for several months on the special T.U.C. and Labour Party Committee which was considering the worsening international situation. In May, 1939, the case for a Ministry of Supply was published. I have here one extract from the Report of the Committee. This is what I thought we meant to apply when we had the power to do it: Until there is such a Ministry of Supply there will be no planning; without planning, waste, muddle and delay are inevitable. The necessity for planning is a dominant principle in Socialist development, and it is becoming increasingly clear that democracy can only make itself secure by the adoption of these Socialist measures of planning which experience in peace and war has shown to be absolutely necessary… in the supply of Defence requirements. I thought we really meant that. When Britain's economic position became worse, I thought we would have set up a Ministry of Planning, Production and Resources.

Mr. Osborne

Another one?

Mr. Ellis Smith

The biggest indictment against this Bill is that it is so narrow in its approach to the problem. The Ministry ought to have been called the Ministry of Planning, Production and Resources. The world situation calls for Britain to be organised on those lines. I am supported in that plea by right hon. Members opposite.

For the second time in my lifetime we have been deceived. We were told in the First World War that, if only we responded, this, that and the other would be done. In the Second World War, when the support of our people was wanted, the right hon. Member for Aldershot (Mr. Lyttelton), the present Foreign Secretary, the present Lord Chancellor and the present Leader of the Opposition made speech after speech— and they can be quoted if anyone doubts it— advocating that planning should form the basis of Britain's post-war recovery. The ordinary people of this country thought that would be applied.

I believe that if Mr. Ernest Bevin had still been a Member of the Cabinet this Bill would never have seen the light of day in its present form. Those of us who remember Sir Stafford Cripps's work before the war will recall the analyses he could make of Bills. He would have torn this Bill to shreds. Mr. Oliver Stanley— being big enough, as he proved to be time after time—would have blushed all over his face, and would have met Sir Stafford behind the Speaker's Chair. After consultation the Bill would have been modified in accordance with the debate. That is democracy at work. The Government are the final authority. But, if we pool our ideas, especially on a Bill of this kind, then the Government should be prepared to modify the Bill in accordance with the needs of the country by implementing the points raised in the debate.

6.9 p.m.

Mr. Walter Fletcher (Bury and Radcliffe)

I listened to the Minister today with the greatest possible care. It was a rather unusual voice that he used. He has spoken in this House with three voices. Today he used the voice of a rather cautious and hesitant Minister, not very sure of his ground and having what I think are quite legitimate doubts. What a contrast that was, to what we have been used to— Dick the rebel, sitting below the Gangway, with his cry of "You can't do that there here" to the occupants of the Treasury Bench. The third voice was that of a highly successful head of a very large and important engineering firm, talking with knowledge and point and getting into trouble, but often "Ransoming" himself with the "Rapier" of his own wit.

But now, as the combination of that experience has put him into his office, we on this side of the House can assure him that we wish to give him every possible opportunity to harness for the general good the great gifts which he has and the willingness which he has always displayed very fearlessly to bring them forward.

If he is looking for a motto at his Ministry, I would refer him to a well-known work of reference which I, as a member of the Kitchen Committee, am entitled to mention— Mrs. Beaton, who said, "First catch your hare." When we are going into the question of raw materials proceurement and allocation, the first thing to remember is that one must increase as far as one possibly can the total amount of material, that one must first catch one's hare before one starts to dismember it in the most complicated way which the right hon. Gentleman has tried to explain.

The thing that struck me most about the whole speech, and about most of the speeches that followed it, is that throughout, this new Ministry and the Bill creating it have been discussed in an atmosphere of shortage, and of practically permanent shortage. That is a very great danger, because the system that is created and was foreshadowed by the White Paper is entirely a one-way system, and in that lies the greatest possible snare.

Mr. Stokes

Surely I did make it perfectly clear that nobody could ever have enough unless there was too much, and, while I was not so foolish as to suppose that I could produce too much of what is in short supply, that would obviously be my main endeavour?

Mr. Fletcher

That may be so, but as the instrument which is going to control policy regarding raw materials covers a great many raw materials and substitutes which can replace raw materials which are often in very short supply at one moment and surplus the next, these things have to be considered in relation to their allocations and the price levels at which they are bought by the Ministry. It is extremely important.

I have spent the whole of my life dealing in various ways with commodities, which invariably show the same pattern repeating itself. We begin with a shortage, which becomes very acute, and then there is this a little period of hesitation. I see that the Minister of Supply is in his place; he also in the past has had considerable experience of this. There is a moment of hesitation, and then we pass over the watershed and come down the other slope to a condition of surplus, so that the manufacturer, the Government or whatever agent is the buyer on Monday is not there on Tuesday, and on Wednesday might well be the seller.

It is extremely important that the whole problem of raw materials should be considered, not only in the light of shortages, but also bearing in mind that only one-third of the raw materials for which the right hon. Gentleman will be responsible will be in connection with the re-armament programme, and the other two-thirds will be in connection with the export trade and home needs. If the right hon. Gentleman, in carrying out his policy, which I think is unnecessarily complicated by the terms of this Bill, takes a false step, the effect will not be swallowed up so much in the cost of re-armament, where it can be fairly easily concealed, but will be much more directly felt in that two-thirds which has to do with the export trade and home needs. It may well affect the export market at a time when the period of shortage is finishing and surpluses are becoming apparent, and it will keep the cost of living unnecessarily high if the buying, on the whole, is not as good as it might have been.

Let me try to assist the right hon. Gentleman in the lesson which I learnt very early in regard to systems of buying raw materials by private enterprise. Government buying is so often a case of simply passing on their purchases to manufacturers at cost plus. The ideal method of buying was to have three separate departments, none of which knew what the others were doing. The object was to buy the amount of raw materials needed in the factories at slightly below the average prices in the world, and, of course, nobody could expect to do very much better than that.

The three departments were contrived in this way. One department bought daily at the average daily price and pretty well struck the true average. Another department bought on a fairly short-term basis, calculating what the commodity market was likely to do over the next two or three months. If it was intelligently carried out, the price might prove to be a little better than the average. Another department bought perhaps twice a year on a long-term basis. That system, inaugurated by a really famous firm, has invariably been successful.

The right hon. Gentleman may intend to follow exactly that counsel of perfection, but I think he has been very heavily handicapped in various ways. There was not one reference in what he said, or in what was said subsequently, to the reopening of the commodity exchanges, such as the Liverpool Cotton Exchange. In the moment of shortage, appeals for the re-opening of these exchanges fall upon deaf ears; at any rate, in the case of the present Government. The moment when we get into the zone of the beginning of a surplus—and the Government have found themselves faced with this before now— there are very large stocks of materials which they would like to get rid of. At such a time, the need for an open exchange, which reflects world prices, makes itself felt, and these are the conditions which give rise to the plea which we have always put forward for the re-opening of the Liverpool Cotton Exchange and similar exchanges.

I would point out again, as I did two years ago in the debate on shortages, when people were not listening, the great need for the opening of these exchanges and the establishment of a world price which is the true world price, and not one which is rather artificial. The Minister will be responsible when he holds stocks, which he will be able to pass on to manufacturers at higher prices than those at which they could buy in the remaining open markets of the world, if there were no scheme of control.

Personally, I believe that the greatest defect of this Ministry— as the right hon. Gentleman will find out— will be twofold. He and his colleagues— and this is very charitable and generous on my part—may get on sufficiently well, because they all sink or swim together as a Government, to be able to settle their differences in something like reasonably good order, but when it comes down a little lower in the Government hierarchy, when we come down from the Minister to the official, the creation of this new Ministry will be like the mass migration of 1,000 pigeons or bees flying across Whitehall to a new home; this will certainly create exactly those conditions of friction and exactly those circumstances which will handicap him when he, having flown away, as either dove or bee, has to cross the Atlantic and begin the negotiations, because, quite surely, that is what is likely to happen.

On the international level, he is putting in a demand for the needs of this country that will be challenged. There has never been a better instance than the rice allocations after the war in the Far East, when the Siamese and Burmese stocks were being allocated. Every single country concerned put in for anything from 50 to 100 per cent. more than it needed, in the belief that the authorities were going to cut them down any way and that by that method they were sure to get something. The work of O.E.E.C. has been disregarded, and so has the excellent work done by its committees, which has been cast into the discard, and new committees appointed to do the work carried out by them.

If the Minister is simply an officer to whom an indent is made out, but has no power to allocate, he will be heavily handicapped on the other side of the Atlantic, or wherever he goes, because he will have to say, "I have no power to query, except rather remotely." If there were a Minister fully responsible for allocation as well as for buying, he would be able to do what I consider is most important. When the various parts of industry put forward their demands, either directly as firms or in groups, he would be able to say, "You must prove to me the need for your demands." I saw that happen during the war, and I believe it is hardly fair to the Minister, who is taking on a very difficult job indeed and one whose success is not only going to govern our re-armament programme but also our export and home markets, not to give him these powers.

This Bill simply reeks of compromise, of trying to save the face of one Minister and of trying to balance and offset Treasury control, which is still the dominant factor. As a result, we get no clear line of demarcation the whole way through from the Minister to the consumer. Therefore, when he is engaged in his main job of procurement, he will find himself very heavily handicapped.

Mr. J. Lewis

Is the hon. Gentleman suggesting that when my right hon. Friends goes to, say, the United States to attend a conference, the subject of which is the allocation of raw materials, if, in fact, he were to tell that conference that a committee set up by His Majesty's Government had advised him that the allocation of raw materials asked for was vitally necessary in order to sustain our economy, whether those materials were required for re-armament or other purposes, that, in those circumstances, his figures would be challenged by any responsible Government?

Mr. Fletcher

I am absolutely certain they would be challenged. If he goes there and says, "This is the block demand I have got," and the American representative or anybody else on the committee says, "But it is 22 per cent. higher than on the previous occasion," he is not in the position to say "I have gone through this myself, and the reason for it is the demand for munitions or for exports." If he cannot give that answer as the Minister responsible, he is in a weaker position than he should be.

Mr. Stokes

Surely, I made it perfectly clear when opening the debate today that one of the reasons I consider it vital that there should be a Minister with responsible civil servants behind him was that he must be able to have these independent figures and be quite sure that he is not being played off by one Department against another.

Mr. Fletcher

That is no answer if he is not the responsible Minister. If he goes as the head of his firm and discusses his requirements with the people on the spot, he is speaking with the real voice of authority. That is something which under this Bill he certainly has not got. The criticism made by my right hon. Friend was based on the fact that there was no clear line of demarcation of authority right the way through, and that remains perfectly true.

A certain amount has been said about the long-term problem of procurement of raw materials. I think that I as much as anybody on this side truly welcome the steps that are to be taken to initiate new synthetic methods in order to find substitutes and to animate and accelerate the production throughout the world of vital raw materials. But it is not a question that stands on its own feet or by itself. Here, again, a note of warning is really very necessary. What may be a satisfactory course from the point of view of the user of raw materials here is a course which must always tend to try to get the materials at as low a cost as possible and there is a great danger that the areas in which it is proposed to animate and accelerate the production of those materials will be economically barred. A very nice balance indeed, and one which nobody has as yet been able to achieve, between consumer and producer has got to be in the forefront of the Minister's mind.

The delight we may feel, and which is justifiably expressed when very high prices come down with a rush, must not blind us to the fact that production costs throughout the world are now very much higher, and that levels that would have seemed fantastic a few years ago— just as would the cost of living in this country — must now be regarded as more or less normal. Unless both the producer and the consumer are getting something like an equal long-term advantage, evenly divided between them as far as possible, the house which the Minister is trying to build will be built on shifting sand. There is no doubt that the Colonial Development Corporation, which is going through a bitter experience at the moment, will be able to tell the right hon. Gentleman some stories which will persuade him of the need for his long-term policy being a real long-term policy.

There is no doubt at all that the introduction of synthetic materials— necessity being the mother of invention—contains very dangerous industrial problems, not only for the producer of natural raw materials, but also for the manufacturer in this country. Part of the right hon. Gentleman's speech reminded me of the end of the Jackdaw of Rheims in reverse. At the end of that curse nobody seemed one penny the worse, but at the end of the right hon. Gentleman's speech nobody really seemed one penny the better.

The part of his speech that impressed me most of all was the inadvertent remark— it was certainly not in his notes, and I agree with him how irksome such notes can be— to the effect that he did not really think it would work out like that. That was the part of his speech I admired much the most, because it is perfectly clear to anybody— and this is probably in the mind of the chief planner for the Government, a gentleman who has nothing whatever to do with planning— that this Bill and the curious geometrical pattern running through it for the division of responsibility and function will not, in practice, work out like that at all.

This is an opportunity for trial and error, which is the only true method to have full play. The greatest thing of all is that the right hon. Gentleman himself is a man of sense, and therefore is perfectly willing not to cling too closely to a theory of the politician, but is willing, which is the merit of the business man, to turn from any wrong course he may follow. Having seen the functioning of the Board of Trade and of the Ministry of Supply, I believe that any new move is likely to be a considerable improvement. Not that I blame the Ministers concerned very much, because the functions allotted to them automatically frustrate them.

I support my right hon. Friend in what he said, and I hope that the Minister will really bear in mind— it will be the most difficult part of his task— that when in his judgment a shortage in a raw material has disappeared, he should not continue too long the methods by which it is not returned in the main to the individual to procure for himself. After all, the present situation and the need for the Minister arose largely because the Government, having told the individual manufacturer and the consumer that it would be wrong to secure materials for themselves because A might get a little more than B if he were quicker and cleverer, both the individual manufacturer and the consumer failed to get the material for themselves and the Government failed to get it for them.

That is the background of the Bill. Let the Minister not make the error of clinging on too long, which is even worse than the error of starting too late. The sin of starting too late has been proved by the fact that this Ministry has come into being. Let him remember that it will lie with him, with the confidence that is placed in him on both sides of the House to a far greater degree than in most of his colleagues, to see that when we come to that period that error is not committed again.

I hope that when this debate is over he will breathe a sigh of relief and get down to the main part of his job. The first part of his job for the first two years will be occupied in getting answers to his hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith). When that long protracted period is over and answers of sufficient frankness to pass muster have been given, then will his staff settle down and settle up. Those who are good will go to him because they are good, but others who are bad will go to him because they are bad. That happens in all Ministries. When the Ministry of Supply was formed we saw that very clearly. Then he will fly off to his main job. When he does I am certain from what he said today that he will know he must concentrate on increasing the total volume of procurement in every possible way, short and long-term. But he must not overplay his hand.

I am sorry that the function of a Minister without Portfolio, which was touched upon by my right hon. Friend the Member for Southport (Mr. R. S. Hudson), has not found favour because it would have given him that liberty of action and ability to change his view which is so valuable in negotiation. After all, if one becomes the buyer, probably the most important buyer either directly or indirectly, and also the representative of the producing area, which is about the biggest one too, one wants as free a hand as possible. One wants to forget a great deal of one's theory and rely on one's pool of experience— in the Minister's case it is a considerable pool.

The reason many of us dislike this Bill is that, while purporting to increase the power of the Minister charged with procurement of raw materials, in actual fact, owing to its faults of set-up and not of its intention, it is far more likely to frustrate him. I would say— and this is not a party matter in the narrow sense— that he will certainly have the help and advice of every trade association and every part of industry in this country. The list he read of those whom he consulted was a rather narrow one. Let us hope that it is not final. His consultations should not cease now that he has seen the F.B.I. and a few associations.

I hope we shall have an assurance from the Chancellor of the Exchequer when he replies to the debate that consultation with industry will be permanent, frank and on a wider basis than that put forward up to now. He cannot succeed without the assistance of the consuming industry and the distributive industry. If he will look at them without the discolouring glasses of party and Socialist prejudice, which are of pale yellow and will give him jaundice, I am sure he will have a fair chance of success.

To sum up in words similar to those of my right hon. Friend the Member for Bromley (Mr. H. Macmillan), which he used the other day when the Minister appeared before us as the apologetic barker of the fun fair, his speech belonged to the postimpressionist period, without the detail being clearly demarcated, but certainly it was a picture more encouraging than we might have expected. Let him break down the shackles put upon him, take every sort of risk against the other Ministers whose face-saving may work against his efficiency, and if he comes back at any time to this House with success, there will be no jealousy on this side but rather nothing but congratulation to a good man, misguided perhaps in his theory, but struggling with great adversities and, we hope, overcoming them.

6.35 p.m.

Mr. Harold Wilson (Huyton)

I think the best that can be said of this Bill is that it is a regrettable necessity. The worst that can be said of it I do not propose to attempt to say. [interruption.] But not for the reasons hon. Gentlemen opposite like to think, because if there is one proposal this afternoon worse than any other it was that of the right hon. Gentleman the Member for Southport (Mr. R. S. Hudson)— that the allocation of raw materials should be left to trade associations and cartels.

From the speech of my right hon. Friend the Lord Privy Seal, and from the knowledge that I and many of us have of the problem there is no doubt that the operation of the Bill and of this White Paper will cause very considerable dislocation in Government relations with industry. It is obviously in the interest of efficient relations between Government and industry that industries and firms with which one is dealing should have as far as possible only one Department to deal with.

This Bill means that many firms and industries will have one Department— the Board of Trade or the Ministry of Supply, or whichever it may be— to deal with as the parent Department for general questions, industrial policy, controls, exports, and so on, and they will also have to deal with my right hon. Friend's new Department for raw materials. I think experience has shown that this will lead to chaos and very bad results in industry.

I remember when I first went to the Board of Trade, as Secretary for Overseas Trade, attending those morning meetings which the then President, Sir Stafford Cripps, used to hold at an unconscionably early hour. I have no doubt that my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith), remembers them, too. At that time the Board of Trade raw materials section was a separate sub-department of the Board, part of the old Raw Materials Department taken over from the Ministry of Supply. I remember that at those "morning prayers," as they were called, a considerable part of the time of the then President and the higher officers of the Board was taken up in arbitrating between individual departments of the Board of Trade, between the production department and the raw materials department. The leather department was fighting against the footwear department, the raw cotton division against the cotton division, raw wool against the wool industry division, and so on.

In due course the various departments were fused and one Under-Secretary was made responsible not only for the textile industry but for the raw materials side. It meant that the cotton or wool industry, for example, had to deal with a single officer responsible for all the problems of that industry. I think that that fusion, carried through two or three years ago, has been of great benefit to industry and that industry has felt that it was the right step to take.

But the result of the Bill before us today will mean that once again there will be all these questions to be settled by arbitration by ministerial intervention. But now it will mean intervention not by a single Minister arbitrating between various officials of his Department but arbitrating between Ministers, and thus taking far more ministerial time and, I am afraid, involving industry itself in a great deal of trouble, too.

This will be confusing to industry generally and certainly confusing to the textile industries in particular. Once the decision to set up this new Ministry was taken and announced— and I think it was taken and announced far too quickly, without sufficient consideration of the effect on industry— then the demarcation proposed in this White Paper was probably as good as anything that could be produced. For instance, if raw cotton and wool were going to a new Department it would have been wrong to have taken any part of the cotton and woollen industry away from the raw material part. One could not have had a division at the spinning or grey-cloth stage or anything of that kind.

I think the decision that has been taken in the White Paper is the right one, given the original decision to set up this new Ministry of Raw Materials. But the price of that decision is that we now have to have two Departments dealing with raw cotton, raw wool and these other raw materials of the textile trade. I agree with my right hon. Friend that one very helpful factor lies in the existence of the Textile Fibres Advisory Committee, which was set up last year at the suggestion of my hon. Friend the Parliamentary Secretary to the Board of Trade who presides over it.

This Committee has carried out some very important functions, I think, to the entire satisfaction of the textile industries, discussing with those industries the allocation of particular scarce fibres between one industry and another, whether rayon yarn should be substituted for wool or cotton, whether there should be more controls over the export of rayon yarn, and, in connection with a problem that arose over cotton waste, solved the problem to the great satisfaction of the industry and everyone concerned. The fact that this Committee will continue and the fact that my hon. Friend will be able to direct its work will give more confidence to the House and to the textile industry who feel that they have in my hon. Friend a man who knows their problems intimately.

If the textile problems are going to be difficult, the chemical problems are going to be even more difficult. I will not take up the time of the House by reading paragraph 6, about chemicals, but the proposal that the new Minister should take over responsibilities for the basic raw materials of the chemical industry, whatever that phrase means, and that the Board of Trade will continue to deal with the chemical industry generally, is, I think, a proposal that will lead to great difficulty both in the Government and in the industry itself.

As I have said, this is a regrettable step. In saying that I am casting no reflection on my right hon. Friend. If this Ministry had to be created there is no one better fitted to head it than my right hon. Friend. It is quite clear that one of the motives in putting him in charge of it was to have someone with his well-known technique and methods for dealing with the "dollar-a-year men" who direct the economic side of the United States administration. It was regrettable that we had to resort to this kind of personal contact, that we had to be dependent upon this international freemasonry of business men, and not be able to rely, as we ought to be able, on our rights as partners in the defence effort.

I am sure that no one in relations with the American Government could have done more than His Majesty's Ambassador in Washington. He has done a magnificent job out there, both in his normal diplomatic functions and in the economic field. I felt that the disgraceful attack on him in the "Daily Express" last week was most uncalled for and earned the condemnation of all hon. Members of the House. The Ambassador handled the matter extremely well in bringing our problems to the attention of the American Government. But now my right hon. Friend is appointed, and I agree that that will be helpful. I regret, however, that it had to be so. That is the explanation of this Bill. It is not a question of the failure of the Departments that had been dealing with the problem, as was suggested by the right hon. Member for Southport.

The Bill, which as I have already said will have serious effects on industry, has become necessary because American consumption and stockpiling so dominate the world materials situation that we must have one Minister to head up the representations to the Americans. It is quite clear already, as a number of hon. Members have explained, what problems my right hon. Friend will be dealing with. Shortages have been debated on a number of occasions. The progress of the international discussions has been regrettably slow, through no fault of the Government, which took the initiative in those discussions.

There have been one or two improvements. There is a better cotton crop, as we all hoped there would be. There has been this break in wool prices because the Americans have dropped their fantastic proposal to stockpile so much raw wool. There are better sulphur allocations. There is a sign of some willingness to have international distribution of molybdenum. The lunatic phase of stockpiling is now over, but I am sure my right hon. Friend would agree that it will not be enough merely to desist from adding to stockpiling. It will be necessary to have some releases from stockpiles if Western Europe is to continue its production.

Our problem now is not so much American stockpiling as the inadequately restricted volume of American domestic consumption. It is going on at a rate which means sucking in supplies from Europe and from the free world, and denying supplies to the rest of the nations, including ourselves. The American consumption has expanded so fast that they now consume 50 per cent. of the world's copper and lead as against 30 per cent. before the war, 60 per cent. aluminium as against 30 per cent., 50 per cent. rubber as against 45 per cent., 75 per cent. wood pulp as against 48 per cent., 26 per cent. wool as against 18 per cent., 35 per cent. cotton and sisal as against 23 per cent.

As to newsprint, with only one-fifteenth of the world's population, the Americans consume well over two-thirds of the world's supplies at the present time. The American newsprint interests are bleating against the higher prices fixed by Canada— prices due to their excessive consumption— and they are calling for sanctions against Canada and whining that if something is not done more newsprint will go to Europe.

Mr. Watkinson (Woking)

I am sure the right hon. Gentleman does not wish to mislead the House about American increased consumption. Would he not agree that our own consumption of these materials has increased very largely as well?

Mr. Wilson

I shall have a word to say about the relative positions of ourselves and the United States, which, I hope, will satisfy the hon. Gentleman.

The problem with which my right hon. Friend will be dealing, and the necessity for this Bill, is, of course, the entire failure to control the American domestic consumption which, combined with a prodigious re-armament programme, looks like wrecking the raw materials supplies of the rest of the free world. Their physical controls are inadequate. Even if their controls were as good and as effective as our controls, which they are not, they would be quite inadequate to deal with the head of water pouring over the United States economy.

My right hon. Friend referred to the controls and to the cuts. They are not cuts; they are scratches in the American level of domestic consumption.

Mr. Nabarro

There has been a cut of 35 per cent. in their consumption.

Mr. Wilson

It is 35 per cent. of the figure of automobile production at the end of 1950 which was increasing rapidly. If the hon. Gentleman will look up the figures compared with actual consumption in 1949 he will find that the cuts amount to little.

Mr. Nabarro rose

Mr. Wilson

Before I give way to the hon. Gentleman perhaps I might make another point which will help him in his interruption. The real point is not these individual cuts on one or two things, but the failure to tackle the general inflationary situation. For instance, they have introduced controls over luxury building: you need a licence now if you want to build a luxury house costing more than £12,500. A licence is needed to build a factory, but it is clear that all licensing will be generously interpreted. Indeed, defence factories are now springing up, virtually paid for by the American Government under their new depreciation arrangements.

The Department of Commerce has estimated that American business will be spending 29 per cent. more on new factory building and plant installation this year, and if we compare that fact with the grave statement of my right hon. Friend the Chancellor of the Exchequer last Thursday about the steps which are having to be taken in this country, we get confirmation of some of the things which were said by my hon. Friend the Member for Stoke-on-Trent. South (Mr. Ellis Smith) this afternoon.

Mr. Nabarro

Surely the statement which was made from the Treasury Bench, and which can be confirmed from all the statistics available of the American levels of consumption, was that the estimated figure of aggregate consumption in the United States of America at the end of 1951 will be 35 per cent. below the figure of aggregate consumption at the end of 1949. Those statistics are readily available to the right hon. Gentleman.

Mr. Wilson

My right hon. Friend was referring to automobile production. I will now give the hon. Gentleman the facts. In the first place, American consumption in the early months of this year has been running at a rate 15 per cent. greater than in the same months of last year. That is the first thing. The second point— and this is borne out by what my right hon. Friend said— was revealed by Mr. Charles Wilson, who said in his famous "re-armament without tears" speech that the American Government plan to increase their present national income of 300,000 million dollars by 15 per cent. in three years. That was the figure quoted by my right hon. Friend.

That is an increase of 45 billion dollars in three years— an increase equal to the total production of this country, meaning, by their rather more wasteful use of raw materials, an increased demand on raw materials greater than the total of our consumption at the present time. The idea is that at the end of that period they will be able to carry this tremendous re-armament programme and, on top of it, to bring their civil consumption back to the pre-Korean level.

The views I have been expressing are not just my own views. They were expressed by "The Times" correspondent in "The Times Review of Industry," when he said there was a prospective inflationary gap of 20,000 million dollars. He concluded in these words: Unless steps can be taken to gear the United States' armament effort to the realities of the world's economic situation "— and this is "The Times" speaking, not myself— a widespread inflation may he set in motion. Its results would disrupt production and add to both social and economic difficulties in many countries.

Mr. John Grimston (St. Albans)

What is the date of that?

Mr. Wilson

June edition. I do not think there is a later edition.

The problem is difficult enough then, in 1951. It will be far more difficult in 1952 and 1953. The right hon. Gentleman the Minister of Supply has made it clear, when talking about molydenum and other metals, that there is not enough for military requirements alone in this country, quite apart from the needs of civil industry.

It is against this background that my right hon. Friend the Lord Privy Seal will be operating and he has— and I think he himself realises this— no hope of success until there is a radical change of heart across the Atlantic and a willingness to bring their economy into line with that of their partners. Otherwise, this combined defence effort— and we all support the need of it— will fail in its primary purpose.

Hon. Gentlemen opposite have said that the high cost of living— which is basically due to the high cost of raw materials— is due to the high cost of Socialism. As I said at the week-end, in dealing with their statements, they are completely wrong: it is due to the high cost of uncontrolled capitalism, and to the scramble for raw materials in a too-rapidly re-arming world. We have, in fact, now reached a crisis in world capitalism. A new Malthusian law is in operation; fully-developed industrial economies, going at full blast, have gone beyond the capacity of the world to supply them with the necessary raw materials.

My right hon. Friend will be facing very serious problems. I regret that it was felt necessary to set up this form of machinery to deal with them. If there had to be new machinery I should have strongly supported the idea of a thoroughgoing Ministry of Production, taking economic co-ordination away from the Treasury and putting it under my right hon. Friend, because while the Treasury are excellent at co-ordinating financial matters they are the last people in the world who should be co-ordinating real resources.

Mr. Boothby (Aberdeenshire. East) rose

Mr. Wilson

Let me conclude.

Whereas two years ago the problem was a financial problem— that of dollars — the problem today is one of production, re-armament, real resources, materials, physical capacity. I should have supported the idea of a Ministry of Production to deal with these problems.

Mr. Boothby

That is a very important point. Would the right hon. Gentleman include in the establishment of a Ministry of Production taking away industry altogether from the Board of Trade, leaving the Board of Trade to run trade itself and transferring the industrial side to the Ministry of Production?

Mr. Wilson

I think that would be going very wide of this Bill or of the background to the Bill. It was not done, in fact, when the Ministry of Production was set up in war-time, but it is a very interesting subject which I should like to debate with the hon. Member on a future occasion.

In dealing with these problems my right hon. Friend will have one advantage, besides that of his own personality, which is itself a very strong advantage. He will be taking over what, in my view, is a very fine staff from the Board of Trade and from other Departments— a staff whose loyalty and keenness, efficiency and knowledge of their jobs carry the confidence of industry. I want to pay tribute to the staff, as I am sure does the House. I regret that this step has had to be taken. I regret even more the international background which has convinced the Government that this step is necessary. But I am sure the whole House will join, as I wish to join, in wishing my right hon. Friend every success in the task to which he has set his hand.

6.57 p.m.

Mr. Nugent (Guildford)

I shall not follow the right hon. Member for Huyton (Mr. H. Wilson) far, but I want to make one comment on what he said. He said that we must look for a radical change of heart across the Atlantic. I could not help feeling that that was hardly gracious, coming from an ex-Minister who had had the benefits of Marshall Aid. His further comment on uncontrolled capitalism, about an economy which has, in fact, financed Marshall Aid, again was hardly worthy of him. It seemed to me that the general trend of his speech, interesting though it was from an analytical point of view, could hardly add to a feeling of good will between our two countries. In this respect it was consistent with what he has said in the past.

No doubt the right hon. Gentleman the Chancellor of the Exchequer will be able to answer his colleague, the right hon. Member for Huyton, when he winds up the debate. The right hon. Gentleman the future Minister of this somewhat ill-fated Ministry will no doubt be looking forward to the winding-up speech, because at least he may then hear one speech supporting his side of the case. So far, from both sides of the House, he has had more kicks than ha'pence or, in the terms which he prefers, more slaps than tickles.

My comments will be directed to a narrow field and they should be less difficult for him or his colleague to answer than many which have gone before. Among the many difficult problems with which the right hon. Gentleman proposes to deal is the acquisition of raw materials for the chemical industry. I want to comment in particular on the acquisition of raw materials for inorganic fertilisers for agriculture. He is asking the House to give him powers in this Ministry which would make him responsible for the procurement of these supplies. In his opening speech the right hon. Gentleman told us about the very valuable development of home production of these chemicals, of sulphur in particular, and, although he did not say so, no doubt this increase will come from factories which are being built by private enterprise.

I thought he might have paid a little tribute to them. They will reduce our dependence on imports by 50 per cent. by 1955, and that will be very valuable. I am glad to think that our supply of fertilisers to that extent will be improved. I should like to know, and I am sure that the House would like to know, what is the immediate supply position. Does the right hon. Gentleman feel able to say that we shall have sufficient fertilisers for our current needs? We should all be very glad to know something about that.

However, there is another aspect to this problem which is just as important as that of the quantity of the supply, and that is the price. The right hon. Gentleman is entering into this field at an unfortunate time, when, lying before the House. is an order which raises the prices of all fertilisers very considerably. The point that I want to put to him is that the use of fertilisers depends entirely on the economic value to the farmers concerned. Where there is a fixed price for the end-product, quite obviously, if the price of the fertiliser rises considerably, there is a very real danger of under-use. The sort of price rise that we are contemplating here is something of the order of two and a half times that which was prevailing last year.

The price of superphosphate, which is the main ingredient of fertilisers and compound fertilisers, has had the most striking rise. The price in May last year was £5 19s. a ton. By the order now before the House it goes up to £ 14 13s. 6d. That is an increase of two and a half times and it really is a huge increase. It is true that there is an element of removal of subsidy in that, as well as of increased cost of procurement. I cannot, in this debate, make more than just the passing comment that it might have been wise for the Government to have held their hands about the removal of this subsidy at a time when the cost of procurement was rising so rapidly. However, there is the fact— that these fertilisers have risen by this very considerable amount.

The use of fertilisers has grown considerably over the past 10 years, and if we are to have full production in this country its continued expansion is very desirable. I have not the figures of the pre-war use of potash and superphosphate, but nitrogen consumption is certainly something like three times today what it was pre-war. There is no doubt that we are getting the fruit of education and advice in that farmers are using more and more in this country. Because fertilisers have been at a low price up to now we have had the advantage of a fairly large use, and the result has been a considerable increase in the general production from our fields. It is most desirable, if we are to keep full production, that we should have this full application; and if we are to maintain fertility as well it is absolutely essential that we should have a continuing expansion in the use of fertilisers.

In this particular field the 1949 O.E.E.C. Report on European agriculture had a particular comment to make, when it was dealing with the whole subject of reducing the dependence of Europe on dollar food. It called attention to the desirability of increasing the use of fertilisers in European countries. This country was one of the few then that had a good record to show. The Report made this comment, which, I think, is very germane to what I am saying: The determining factor (in the quantity of fertiliser applied) is probably the financial return which farmers may expect from an increased expenditure on fertilisers. The proposition is just as simple as this. The normal application of, say, three hundredweight of compound fertiliser can increase the yield by about 15 per cent. on a cereal crop. This would amount to an increase of about three hundredweight per acre which gives a return on a wheat crop of about £4 or £4 10s. The fertiliser costs £3 at present prices, and with the cost of spreading added to that, the result is that a farmer, as far as he is concerned, can see no profit in it.

Where the price of the crop is fixed— and the price this year is substantially the same as what it was last year — it is not sufficient to say that there is recoupment for these rising costs in the annual February Price Review, because with the cereal crop price remaining at the same level that will not avoid the fact that when the farmer is considering what application of fertiliser to make he will see, on the face of it, that this particular proposition has no profit for him, and he simply will not use it, with the result that his crop will be reduced accordingly.

The point of my remark is that, in the right hon. Gentleman's having asked the House to give him these powers to deal with this particular field of our raw materials, he has a responsibility not only to see that we have a sufficient volume of the chemicals but also that the price will make them available so that they can be economically used; because here he is dealing with a particular field where the price of the end-product is fixed and recoupment must be through an enhanced return from the specific application. I hope that when the Chancellor of the Exchequer replies to the debate he will not give us one of his dusty answers, but that he will recognise that this is a very real problem and give a constructive reply.

The right hon. Gentleman, among many raw materials he is offering to take charge of, is not offering to take charge of food, but food is an essential raw material in this country, and the question of the availability of fertilisers at the right price if, of course, a vital element in the production of that food here. For these reasons I hope we shall have a satisfactory reply from the Government on how they intend to deal with the very difficult situation that has now arisen through the very high levels that the prices of fertilisers have reached.

7.7 p.m.

Mr. Jack Jones (Rotherham)

I want to take part in this debate to give the viewpoint of the industry from which I have come and of which I claim to have some little knowledge, and so I do not propose to follow the hon. Member for Guildford (Mr. Nugent) into the field of fertilisers, although I realise that fertilisers are of vital importance to our British agriculture, which is, of course, the greatest industry in this country.

I have listened to every word of the debate so far, and I think it can be truthfully said that the debate has been run on fairly non-party lines, because everybody in this House realises the paramount importance of the matter which we are debating today. When the history of these times is written, I have not the slightest doubt that the success or otherwise of this Ministerial arrangement and appointment will be recorded as having been the success or otherwise of the continuance of our present standard of existence. Therefore, this debate is of vital importance.

I would wish from the back benches to express to my right hon. Friend the new Minister of Materials our appreciation of his appointment, and to wish him well. That does not mean that I am one of those foolish people who believe that, because he has got what is called personality and the industrialist's outlook, America or anybody else is going to be more magnanimous to this country than it would have been if anybody else had been appointed. I believe that this matter should be looked upon as being the need of a nation, and looked at against the international background.

We have listened to some very fine speeches today, and particularly the brilliant speech of my right hon. Friend the Member for Huyton (Mr. H. Wilson), the former President of the Board of Trade. The new Minister's duties, as I understand them from the White Paper, are, in my own words, to seek and to obtain vital raw materials necessary for the continuance of full employment and for keeping our industries fully occupied. That would have been a big enough job and a vital job had we not had thrust upon us the necessity for re-armament; but with the necessity for re-armament superimposed upon the necessity of keep ing our present standard of life, it becomes indeed a vitally important job.

I know something of the rumblings now going on inside one of our vital industries. I know something of the worries and troubles of the steel industry, and it is to that aspect that I want to turn my mind. I can quite understand that it was necessary to take away from the Board of Trade such matters as raw cotton supplies and raw wool supplies, and so on. That can be done, probably, with some advantage, because I believe that certain Ministries can become so big as to be overwhelmed by the magnitude of their work, and the question of the supply of raw materials and of the allocation of them and the distribution of them, and then of the finished article, is a very big job.

I cannot for the life of me understand why the White Paper lays down in paragraph 5 that in regard to metals we should dismember the steel industry. It reads quite plainly: The Government, therefore, consider that in present circumstances the best course is for the Minister of Supply to remain responsible for the iron and steel industry as a whole. " As a whole" are the operative words. As I read the White Paper, it goes on to say that such things as the supply of molybdenum. nickel, sulphur and the refining ores from abroad, from Sweden, Spain, all the things without which we cannot make steel— and I ought to know, because I made it for 36 years of my working life— and, indeed, all the refractories— the firebrick in ordinary words— are being taken away from the jurisdiction of the Minister of Supply and passed on to the new Minister.

Mr. Summers (Aylesbury)

I interject solely to give the Chancellor an opportunity of correcting a statement by the hon. Gentleman, which sounded to me to be inaccurate. He said that the procurement of iron ore was to be transferred. As I read the White Paper, it is not to be transferred. Perhaps the Chancellor will make clear what the facts are.

Mr. Jones

I differentiated between indigenous ores, which remain under the control of the Minister of Supply, and refining ores—ores such as we shall need to buy from Spain, Chile, North Africa and Sweden. The point I make is that this industry is dismembered, and we shall have a very difficult position in the major portion of production— what I call the cheap line of steel production; the hon. Member for Aylesbury knows what I am referring to; what we call the cheap stuff in the industry, as against that which is of the highest importance, the alloy steel and the steel which carries real conversion value, which means dollars, which in turn means our life-blood. I ask the Government to have another look at it.

Already the difficulties of the steel industry are big enough. The question of supplies of indigenous ores in sufficient quantity, indigenous coal in sufficient quantity, and scrap, above everything else, in sufficient quantity is already a headache enough. To ask the new Corporation, superimposed on the industry, partially up to now, not completely— not enough for me, at all events, nor for almost everybody else in the steel industry who gets his bread and butter there— to carry on with their present production and then to go to the Minister of Supply for certain things and then have to go to this new Ministry for some other vital things, appears to be a clear-cut dismemberment of a vital industry. I think that is a mistake.

Manganese remains a vital component for the industry and this is left under the control of the Ministry of Supply. We need manganese from India, or Russia, or some of the minor producing countries and I ask the Government to have another look at the problem. In taking the industry as a whole, there will be overlapping. There will be unnecessary work, unnecessary to'ing and fro'ing inside the industry, which should be allowed to remain as an entity unto itself. I can, of course, understand that other materials, such as leather, cotton and wool should be taken away, if thought fit.

Certain statements have been made today about the position of the American nation in regard to raw materials. I have never hoodwinked myself about what America is doing for this country, or what the people of this country think America is doing, and the reasons why. In 1942, in the middle of the war, I spent some time in representing the British war workers to the war workers of America, and I am perfectly satisfied that the American position today has behind it the background of the fear of Communism.

They are in the same boat as we are, and therefore to take the long-term view is a different matter from taking the short-term view. On raw materials we must try to take a peace-time view, not a view based on hysteria, or semi- or partial hysteria, or the fear of what may happen to the Western nations. It is because the need for re-armament that they feel they have an obligation towards this country, in the same way as this country feels that it has an obligation towards our American brothers and sisters.

Let us make no mistake about it. Ex-President Taft himself made it very plain to the world that American dollars are much cheaper and easier to find and to shed than American blood. We must therefore be very careful in our assessment of the true situation between America and ourselves— although, speaking personally, I feel that we have in them a Western ally greater than any other friend we can expect to find in the world today. The Minister, when speaking today, said, "When I was in America 10,000 workers at Ford's works were laid off because of a shortage of steel plate because of the need to send some steel sheet to Britain." Will American workers be satisfied to continue to be laid off, knowing that it is as a result of allowing raw materials to be diverted to this country? I do not think so. The American worker is like the Indian worker, the British worker, or any other worker: he wants the best possible he can get for himself, his wife and his children.

Having found these raw materials and obtained them, having got allocations and sanctions in those countries to bring them to this country, nobody today has said anything about how we are going to pay for them. That is the important point to which I now wish to come, and upon which I shall finish. The question of having found these raw materials is one thing. The question of getting agreement that we should have a fair share of them is another, and a very fine thing in present circumstances, or in a peace-time situation.

I remember making speeches in America in 1942 as an ordinary workman. They were recorded, and I have the records at home which I occasionally put on and listen to what I then said. I then said, in 1942, that the great post-war problem would be what was to happen to that huge productive machine that America was building up which would, as my right hon. Friend the Member for Huyton explained today, take a bigger share— if we are all in this great crusade together— than it is entitled to of the world's raw materials. I said that against the background of the ideology of Communism as we could see it developing in Russia.

I want now to return to a very old love of mine, which I am never afraid to reiterate, although I know it is not popular, and is even more unpopular with some of my hon. Friends, although it happens to be a fact. No nation is going to be prepared to help this country unless and until it is satisfied that this country has done everything possible to help itself. I come back to the exploitation and the use of our own indigenous raw materials. Are we getting all the raw materials from our own resources that we should? That is a fair question. Are we, for instance, producing all the coal that we might? I have already said, and said often, that getting coal is the lousiest, rottenest job in Christendom. But it has got to be done, and it has got to be done to produce a greater quantity of coal than is at the moment coming out of our coal mines.

The question of sulphuric acid has been mentioned. Any businessman with 2 million tons, or even 500,000 tons of coal, can get pyrites from Sweden tomorrow and sulphuric acid in a fortnight — if he can get the coal to pay for it. I know something of what we have done as compared with what we used not to do, and I know the great effort we have all made, but today we find ourselves with this re-armament programme superimposed upon us, with world prices rising to operate against us, with three cars having to be sold to pay for raw materials which two cars paid for before, with ever-increasing prices of raw materials and less and less coming to this country, and, whether we like it or not, we must exploit to a fuller extent our own raw materials which Almighty God gave us.

I wish the new Minister well. He has embarked upon a great task. I am not concerned with what the businessmen will get out of this. They will get the best out of it; they have always had the happy knack, whatever Government was in power, of maintaining themselves at a decent standard of life. I do not begrudge it to them. I am one who believes in payment by results and I have always been paid that way. I do not believe in anyone not getting a fair return for what he does. This Bill is of vital importance because it means the continuance of work for our people and the maintenance of our present standard of living which, God knows, is not yet high enough. It means bread and butter for our children, the education of our children and all the things that are necessary and vital to us. I wish the Minister god-speed in a great adventure.

Mr. Jennings (Sheffield, Hallam)

I have listened to the criticisms of the hon. Gentleman about raw materials and the chaos that is taking place with regard to Sheffield high alloy steel. I think that on account of that criticism and the other criticisms that he has made, we ought to go into the Lobby against this Bill tonight.

Mr. Jones

My remarks were not in the sense of being critical but because I want this Bill to be the best Bill we can have, and I do not want the industry to be dismembered.

7.21 p.m.

Squadron Leader A. E. Cooper (Ilford, South)

I have not been long in this House, but I always listen to the hon. Member for Rotherham (Mr. Jack Jones) with considerable interest. I am sure that every hon. Member respects the great sincerity and practical background which he always brings to debates of this character. I am sure that he will forgive me if I do not follow him in his dissertation with regard to steel. It is a subject about which I know a little, but my life has been spent in other industries, and it is in those spheres I want to dwell for the next few minutes.

In the course of this afternoon's debate, we have had some interesting speeches from right hon. and hon. Gentlemen opposite, and it will be interesting to watch into which Lobby they will go. One speaker after another has criticised the Bill. The right hon. Member for Huyton (Mr. H. Wilson) regarded it as a "regrettable necessity," and others have damned it with faint praise, but I am quite sure that we shall find all these hon. Gentlemen marching boldly into the Government Lobby when the Division bells ring tonight.

There are one or two things I should like to put to the Chancellor of the Exchequer arising out of the speech of the Lord Privy Seal. I hope he will correct the impression that all raw materials are to be concentrated under one Ministry. That is demonstrably not so. Indeed, so far as the chemical industry is concerned — and it is with this particular industry I want to deal— we have now reached a stage, arising under this Bill, where that is organised confusion. Previously, our raw materials were controlled by four different Ministries. I realise, of course, that under a Socialist Government that is probably regarded as an austerity, and so we now have to have a fifth Ministry to which we can take our troubles.

Overriding all these five Ministries hovers the giant the Treasury, like some great bird whose wings overshadow everything under it, which even today is holding back the granting of licences for raw materials which are available to be bought by manufacturers in this country, on the ground that dollars are not available. It really is too bad of the right hon. Gentleman the Member for Huyton and other hon. Members opposite to say that America is lapping up all the raw materials there are in the world and excluding us from getting our fair share. There is a considerable quantity of raw material available in America if the Chancellor of the Exchequer will broaden his policy and make available adequate dollars to industry in this country.

Mr. Gaitskell

I hope that the hon. and gallant Gentleman will give particulars. He is talking very generally at the moment.

Squadron Leader Cooper

I shall be very happy to give the Chancellor particulars. Indeed, on the occasion of the last debate on raw materials, I made an intervention of a similar character when the Financial Secretary to the Treasury was standing at that Box. I offered, if he wanted me to do so, to give him examples then. I should also like to tell the Chancellor of another rather peculiar thing which his Department does at present.

Mr. Gaitskell

Perhaps the hon. and gallant Gentleman will tell us.

Squadron Leader Cooper

Certain plasticisers are made in America, and are in very short supply here. Some offers are made to us and some licences granted. But in this and other spheres the Dutch have been able to secure materials from America for which they have paid in dollars. They then offer them to this country for payment in sterling. The Board of Trade issue a leaflet to industry generally, in which they say that when applying for licences the applicant must state whether the goods which they are now buying for sterling were originally paid for in sterling or in dollars.

Then industry provides the Board of Trade with details of these goods, but Treasury approval is refused. Within a few days, a most extraordinary letter from the Board of Trade arrived, saying, "We are very sorry we cannot allow you to buy these goods in sterling which were previously bought in dollars, but if you will now make an application for these goods and pay for them in dollars you can probably have them." In the meantime, the goods have gone, but not to anyone in this country; they have been purchased by consumers on the Continent.

I assure the Chancellor that this is only one instance and there are many other examples where Treasury sanction is not being given for licences for goods which are available, and it is high time that the Chancellor and the Treasury woke up to the realities of the situation and desisted from putting the blame on America and elsewhere. Who is to be responsible under the new set-up for the issuing of import licences? Is that still to be the responsibility of the Board of Trade or is the new Minister of Materials to take that over? I think that is something which we ought to know.

I also want to deal with the question of the various Ministries which now control the chemical industry. This is a very diverse industry. At present we get our raw materials something like this. I am now talking about those materials which are controlled by Ministries; there is, of course, a large number of products over which there is no control. Our edible oils are under the control of the Ministry of Food. Metals, under the present system, are the responsibility of the Ministry of Supply, but they are now to be transferred, or at any rate some of them, to the new Ministry of Materials. Fine chemicals, as distinct from basic chemicals, are the control of the Board of Trade, but hydrocarbon solvents are the responsibility of the Ministry of Fuel and Power.

There are many firms in this country who earn their bread and butter by selling raw materials to the paint, varnish, printing ink and lacquer industries, and all have to go to five different Ministries today before they can get the raw materials they need. Does the Chancellor of the Exchequer really think that that is a sensible way for industry to operate? Does he think that that offers the greatest hope for increased production? It is the most complete nonsense, and had there been a greater breadth of view displayed by the various Ministries in recent years this Bill would not be necessary today.

It is interesting to note that the Board of Trade, which at present is responsible for many things, exists under no Act of Parliament at all but under an Order in Council dated 1786. When it was originally established it had no responsibility whatsoever for the procurement and allocation of raw materials. The Ministry of Supply was set up for something quite different. The Lord Privy Seal said that this new policy was long-term, but he did not specify what he meant by long-term. Does he mean five years, 10 years, 20 years or near-permanent?

In considering the set-up which is now proposed much depends on the term of years which it is in operation. If it is a short term of five years, then I do not think that the present scheme can work. As I see it, it can only bring about greater confusion. If this long-term is 15or20years, or even longer, then the Government are guilty of a complete lack of thought in planning this whole thing.

The time has come for some fundamental thinking on the part of the Government if they are to play a constructive and a useful part in the procurement and allocation of raw materials. There is a case, not for the creation of a new Ministry, but for the creation of a Minister with adequate powers to co-ordinate the various Ministries which now operate in this field. This Bill is undoubtedly a face-saving device. It is set up by the Government to whitewash the right hon. Gentleman the Minister of Supply, who has failed over a long period of years to get industry the metals it wants. It is a face-saving device for whitewashing the right hon. Member for Huyton, who is responsible for many of our shortages, and it is also a device to whitewash the Minister of Food, who has been responsible for many other shortages of raw materials.

It is against that background that this Bill must be reviewed. I should like to think that this Bill and the machinery which it proposes to set up will provide the raw materials we need. I believe, however, on the closest analysis of the Bill, that it is impossible to believe that it will result in one ounce more of the raw materials which are so essential to the maintenance of our industrial life.

7.34 p.m.

Lieut. -Commander R. H. Thompson (Croydon, West)

This Bill, by the system which it seeks to establish, is a good example of the wrong way to go about securing a result towards which most hon. Members in this House are entirely sympathetic. I do not think that any responsible Member of this House today would deny that raw materials are scarce, that they are dear and that there is a clamorous demand for them. It may well be that there is a requirement for the Government to take some action to secure their procurement, but the steps that are being taken are not calculated to give us a Minister with the necessary overriding powers to deal properly with this matter. Surely it is a case of getting another Ministry but not a Minister.

Hon. Members on this side had hoped that the effect of this legislation would be to give us another Ministry which would be able to provide us with a Minister with real powers of co-ordination, a man who could go about his job in the knowledge that he could, in fact, knock a few Departmental heads together, if necessary get rid of a lot of red tape and knock off some bottlenecks. We all hoped that if somebody had to be appointed to this kind of job, he would have that kind of powers, and I think that few hon. Members would quarrel with the particular choice that the Government have made, We widely recognise the business acumen and personal qualities of the Lord Privy Seal, but in this kind of bureaucratic set-up it is those very qualities which are going to be at a discount.

With the need so clearly understood, it is regrettable that the Government should have gone about satisfying it in such a poor kind of way. The new Ministry, as some hon. Members have pointed out, would appear to be a sort of competitor of the Ministry of Supply and the Board of Trade. That in itself is very undesirable, but I think there is a lot in what has been said to the effect that this new Ministry, in the particular functions which are being taken over and the particular raw materials, for the procurement of which it is to be responsible in the future, is trying to cover up the very glaring deficiencies both of the Board of Trade and the Ministry of Supply in the last few years. Surely if those two Ministries had done their jobs properly, the requirement for a new Ministry would never have arisen. It is because they have fallen down on their job that today we find another Ministry being set up.

I shall not go through the list of the materials in the White Paper, responsibility for which is being transferred to the new Minister, but they include certain very essential materials, to secure which the previous set-up has proved entirely inadequate. I am not a person who believes that a Ministry is the best way of securing raw materials anyway, but if we must have another Ministry do not let us waste the very great powers of the right hon. Gentleman selected for the job in a Ministry where I feel he will be frustrated and hampered and unable to get on with the job which so urgently needs doing.

I should like to know how permanent this organisation is intended to be. After all, shortages do not go on for ever. In some cases they right themselves very quickly. Is it intended in that case to withdraw such raw materials from the control of the Ministry, or do we look forward to a future where practically everything is going to be controlled either by this Ministry or by its numerous competitors which exist at present?

I am not happy about the distributive arrangements which are envisaged. Here, again, there seems to be an intolerable degree of overlapping. I see in the White Paper that the allocations will be through inter-Departmental arrangements for which the Chancellor of the Exchequer is responsible. Thus we have another super-planner brought into the works, the general effect of which will be to introduce a new set of officials and put another barrier between the manufacturer, the user and the consumer and the original source of supply. It is inescapable that this Ministry is a makeshift contraption of shreds and patches, a sort of sop to the public which has become fed up with the idea that all this control could not, in the end, produce the raw materials which this country needs.

I would say one word about the various strictures which have been laid upon the Americans in the course of the debate, and particularly those which have come from the right hon. Member for Huyton (Mr. H. Wilson), the former President of the Board of Trade. He quoted figures to show the enormous increase in the American requirements of raw materials compared with before the war, the inference clearly being that the Americans were the greedy capitalists who were getting more than their share of the good things of this world.

That is a fascinatingly simple sort of conception which may appeal to some people, but let us remember the fundamental fact that since the end of the war a tremendous change has come over the position of America. From being an isolationist nation she has now taken upon her broad shoulders the care of practically the whole free world. She is inheriting to some extent the mantle which this country so well and proudly bore for two centuries. She cannot do that except on the basis that her industries, and particularly her armaments industry with all its ramifications, absorb an enormously increased quantity of raw materials. For that reason we should be very chary of pointing the finger of scorn at the Americans. Let us be glad that the Americans have taken on the big, dangerous and difficult job, which, thank heaven, they are doing today.

7.43 p.m.

Mr. Edelman (Coventry, North)

After the elegies and dirges which have greeted the creation of this Ministry, it will not seem improper, I hope, if I give it a warm welcome. When I listened to the hon. and gallant Member for Croydon, West (Lieut. -Commander R. H. Thompson), I could not help feeling that precisely those qualities of streamlining which he seemed to consider the Ministry lacked are precisely those qualities which it possesses. This Bill is a measure of administrative rationalisation. My only criticism would be that the rationalisation is somewhat overdue. The Ministry should have been set up when the price rise began after the outbreak of the Korean War.

I am astonished that during today's debate not one hon. Member has mentioned that the shortages from which the world is suffering, and the rapid rises in prices which have done so much to push up the cost of living, are directly due to the outbreak of the Korean war and the consequences which have flowed from it. One has only to look at what has happened during the last two months to see how the graph of the rises in prices has corresponded with the increasing shortages of materials.

Mr. R. S. Hudson

If the hon. Member takes the trouble to look at his own "Bulletin of Industry" he will find that the rises in price and the shortages of materials are described as having begun before the outbreak of war in Korea.

Mr. Edelman

That is true of some of them, but I was speaking primarily of the period of acute shortages and acute price rises. If the right hon. Gentleman wants to refer back I would recall to him that it was when the Ministry of Supply released some of the commodities from the control to which hon. Gentlemen opposite had objected that the rise in prices began. He has only to look at the range of non-ferrous metals, rubber and tin, to realise that the rises in price and the shortages went pari passu with the release of those materials from control by the Ministry of Supply.

It is fair to say that the new Minister will, in effect, be the nation's buyer, if I may use an industrial simile. He will have responsibility for the nation's purchases in the same way as the buyer of an industrial establishment has responsibility for procuring essential materials to keep the factory going. What has taken place is a new division of labour within the Government. Instead— if I may borrow the language of my right hon. Friend the Member for Ebbw Vale (Mr. Bevan)— of there being a vertical organisation, as was the case in the Ministry of Supply, there is now to be a horizontal allocation of responsibility. The Ministry of Materials will henceforth be charged with obtaining primarily those materials from overseas which are today in short supply, and upon which the nation depends for its livelihood and the maintenance of full employment.

Mr. P. Roberts

Surely if the industrial buyer fails to do his job he is directly responsible to the company. In this case, particularly with regard to steel, the Minister is not responsible to the Minister of Supply for the production of steel yet he will not be the buyer of all the raw materials which are vital to the production of steel. Is not that one of the difficulties?

Mr. Edelman

The new Minister of Materials will be responsible to the Cabinet in the same way as a buyer is responsible to the board of directors of a company.

As far as steel is concerned, there is a weakness in the new organisation in that the Minister of Materials has not complete responsibility for the materials which go to the making of steel and which have to be imported from abroad. I am thinking particularly of iron ore. The organisation would be much more logical and efficient if the Minister had responsibility for the procurement of the raw material which have to go into manufactures in this country.

Just as it should be his job to look after the importation of molybdenum, so it would make for greater efficiency if he had the full responsibility for the procurement of iron ore imported from abroad. I noticed in the opening remarks of my right hon. Friend that when he was in America he was able to make various arrangements to divert American ships for carrying iron ore to this country, to relieve us from shortages of materials which the Americans had been scouring Europe to buy. I hope that the Government will look again at this problem and see whether it is yet too late to attribute to my right hon. Friend full responsibility for the importation of all the basic ores which are needed for the manufacture of steel and iron products in this country.

I would congratulate my right hon. Friend on what he has done already. At one time I likened him to one who has made a smash and grab raid on the American stockpile. That description was inaccurate, and I apologise. Now I think he is rather like a privateer who has gone out and been able to appropriate cargoes on the high seas. For that, we must be grateful to him.

Mr. Stokes

I do not object to the description at all, but I must clear up one possible misapprehension which might cause trouble. I did not touch the American stockpile. It remained inviolate.

Mr. Edelman

I am obliged to my right hon. Friend for that clarification. I think he would agree that the reason why he did not touch the American stockpile was that he could not get at it. He would have had to run up against so many fences erected by Congress that it would not have been possible to divert any of those valuable materials from the American stockpile.

It is not enough for a Minister, however able, to make sudden and sporadic forays to the other side of the Atlantic to procure emergency quantities of raw materials. Anyone who has had any connection with industry knows that to keep the proper rythm of a factory going and to maintain full production and full employment, it is absolutely essential to be assured of a regular flow of materials from abroad.

At this point I should like to deal with "the American myth" which my right hon. Friend the Member for Huyton (Mr. H. Wilson) sought to perpetuate this afternoon. I looked carefully through the schedules of materials in the White Paper. I looked particularly at the First Schedule listing the materials to be transferred to my right hon. Friend the Lord Privy Seal from the Ministry of Supply, and I found there that only three out of the 37 items are materials which we import from America and of which the Americans are the indigenous suppliers.

It is therefore clear that, contrary to the mistaken view which has been put about up and down the country, the Americans as suppliers are in no way responsible for holding short the materials which we need here. In the case of the American materials for which the Ministry of Supply was responsible— molybdenum, tantalum and manufacturing abrasives— America has been generous and we have not so far gone short of them for our own industry. As to American generosity in supplying materials which she herself produces, it is important to emphasise that we have no fundamental cause for complaint.

On the other hand, if we turn from the supply of native American materials to the supply by the United States of materials which she herself has had to procure, we naturally see a certain wariness on her part in releasing them. Listening to my right hon. Friend the Member for Huyton, who is not at the moment in the Chamber, I had the impression that I was listening in reverse to a speech by an American Senator who was a member of the Senate Sub-Committee on Preparedness. If we look at the report of that Sub-committee we see that the Americans were complaining in almost exactly the same terms about British and Commonwealth suppliers, accusing them of "gouging" the Americans, holding supplies short and forcing up the prices.

In a sense, my right hon. Friend the Member for Huyton and the American Senators who complain about the policy of Commonwealth suppliers in rubber, tin, wool, and so on, were both right and wrong. They were right on the facts that here among Allies in a time of world crisis the producers of the world were holding supplies short while prospective consumers were bidding up the prices against each other. On the other hand, it is clear that both of them were wrong, because Transatlantic recrimination can only help the Communists and will certainly be of no use whatsoever to the free world. But that does not absolve us from a responsibility for trying to take action which will prevent the tremendous uprush of prices and the concomitant condition of the disappearance from the world markets of those vitally necessary materials which we need to maintain our current industry.

I want to mention what has been done in America to try to arrest the advance in prices. My right hon. Friend the Member for Huyton was extremely critical of "unplanned capitalist America" in her failure to take such measures of control as would effectively keep down the prices. I hope that after he has read what I have to say he will, if necessary, contradict me, but I should say that in America today the range of material controls is far in excess of what we have in this country.

More than that, that the action taken by the Americans to keep prices down on the international markets has been more dramatic, more drastic and more effective than anything that we have sought to do and certainly more effective than anything which my right hon. Friend attempted to do when he was President of the Board of Trade. I regret that he is not present to hear me making this statement, because I feel that he himself can certainly not be absolved from responsibility for having failed to arrest some of the rises in prices which have taken place over the last few months. [HON. MEMBERS: "Hear, hear."]

I hope that hon. Gentlemen opposite will not cheer, even in murmurs, because when it was suggested in the House that something should be done to keep down the prices of commodities like rubber and tin to restrain the profiteering which went on in the free markets of the world it was hon. Gentlemen opposite who consistently protested against controls and objected to any measures which this Government put forward to keep down prices. It is only proper and fair to the Americans to say, for example, that it was their action in limiting their purchases of tin and rubber and taking them under Government control and allocation which, in the first instance, brought those prices down and that we in Britain have been the accessory beneficiaries of the action which the American Government took.

That is not to say that in America itself there have not been very loud complaints or "squeals"— the word used by my right hon. Friend the Member for Huyton — about the action which the Government has taken. I will illustrate my point with an example relating to tin. Only a month or so ago Mr. Kemper, a leading United States tin man, writing in "The American Metal Market" said about the new price fixed by the American Government, which, he complained, was far too low: The new price means that our Government, which finds all right a rise of nearly 237 per cent. in lead from 1939 to today, and has no objection to a hike of 242 per cent. for zinc, demands that tin, the lifeblood of Bolivia, be held to a boost of 167 per cent. from 1939 to today. This American tin man was complaining that Bolivian tin prices had gone up by only 167 per cent. I am sure that none of us will waste any tears on the Bolivian tin exporters who have only been able to raise their prices by 167 per cent., but in justice we must agree that the American Government as such has endeavoured to take action which has effectively had the result that the prices of certain vital commodities in their industries have been kept down.

In our present situation there must be some kind of give and take between America and ourselves and the other countries of the free world. Unless that takes place, and takes place on both sides, there will be a tremendous amount of anti-British propaganda in America and anti-American propaganda in Britain. We all know from our own observations that nothing will more easily raise a cheer than putting the blame for everything upon America. We know that there is always a willing audience to lend a receptive ear to such a discharge of responsibility upon someone else, particularly if it is someone overseas.

For those reasons I think it very important that the House should try to analyse the situation as it is today and see what we can do to bring about an equitable settlement of the free world's raw materials difficulties. Some months ago the Prime Minister went to Washington— as did the Lord Privy Seal a short time ago— and as a result of his activities the International Materials Conference was set up last December with high hopes. Unfortunately, those hopes have not been fulfilled and my right hon. Friend the Minister of Materials has had to come to the House and say that to-day, six months after the first commodity groups were set up, nothing has been done in practice.

Mr. Stokes

I did not say that. I was very careful to differentiate between some of the committees. What I said was that overall, and having regard to the complexity of the situation, the materials in short supply and the many countries involved, it would be foolish to anticipate that we could get any comprehensive decision before the fourth quarter of this year. In fact we have made vast progress in certain directions and great credit is due to the Americans that we have done so.

Mr. Edelman

We certainly welcome any progress made but I am concerned with practical progress. If my right hon. Friend says that no allocations will be made until the fourth quarter of the year it seems to me to be a very long time for the conference to get going. Although the commodity groups will no doubt ultimately be able to confirm some allocations the fact is that they are still far from being effective instruments. In the meantime, the market has not stood still. Prices have risen and the actual commodities that they have been established to allocate have dwindled and ebbed away.

Therefore, I cannot be satisfied with what my right hon. Friend has said. I cannot consider that the International Materials Conference has so far justified the hopes which those of us who originally welcomed it had of it. In the first place, it seems to me that the reason why that Conference has not so far succeeded and will not succeed, even in the fourth quarter, as my right hon. Friend expects, is that the actual administration on the International Materials Conference is at too low a level and the representatives on that Conference have not the political power to enable them to make those rapid decisions necessary in order to bring about fair allocations.

For example, our own representative is Viscount Knollys, Managing Director of the Employers' Liability Assurance Corporation. The French representative is M. Raoul de Vitry, Managing Director of the Péchiney Aluminium Works. From America there is Mr. Edwin T. Gibson, Vice-President and Director of the General Foods Corporation of America. I am sure that these three gentlemen, each of whom represents a leading company in his particular industry, is an eminently successful businessman and eminently competent to carry out the duties which within the scope of his administrative experience he is capable of discharging. But what is required on the International Materials Conference is surely more than business administrators.

It seems to me that even at the level at which they are engaged there should be representatives of the men who have to use the materials. Certainly, in my view, there should be representatives of the organised workers, who are most vitally concerned with the mass unemployment which would flow from shortages of raw materials. I would say, in parenthesis. that my experience in my constituency is that those who have been most alive to the difficulties arising from the shortage of raw materials have been the trade unions and the workers in the factories. Indeed, the representations that have been made to me have come not from industrialists but consistently from the workers, who are worried about their jobs and are concerned when they see that their machines are not working because there are not the raw materials to feed into them.

I wish to put to my right hon. Friend, and through him to the Government, the suggestion that what is required is a reform of the structure of the International Materials Conference. In O.E.E.C. there is a permanent administration and secretariat but there is also a Council of the O.E.E.C., a political Council, which makes political decisions and which decides on the general policy which should be carried out by O.E.E.C. That Council is a Council of Ministers.

I believe we shall never reach an understanding either with America or the other countries associated with America or ourselves until the International Materials Conference has set up for itself a council of Ministers, an economic council which will meet say four times a year but which, when it meets, will be able to work out a formula for the equitable distribution and allocation of raw materials, taking into account the effort that each country is making for re-armament for defence purposes as well as the sacrifices which particular countries have already made to cope with the difficulties which have confronted them in the past. That seems to me to be essential. I believe that if we introduce this very simple reform within the International Materials Conference by setting up such a political council we shall have gone a long way towards solving our difficulties with America and with the associated countries.

It is quite certain that if, as I confidently expect, my right hon. Friend, when he goes to Washington as Minister of Materials, and in a man to man talk, perhaps by bilateral negotiations, pending the development of the International Materials Conference, succeeds in getting — standing on Washington's doorstep— the materials which Britain so badly needs, I am confident that his example will be rapidly followed up by Ministers of Materials from other countries. We shall have the spectacle of M. Stoc, then Herr Stock, after him Signor Stocco, and perhaps, in time, Tovarish Stokowski, going to Washington and there applying far raw materials in competition with my right hon. Friend.

I suggest that that is another form of the international scramble for raw materials. The only way in which we can have effective harmony and effective integration— to use that much abused word— of the demands and requirements of the various countries of the free world is for the International Materials Conference to reform its structure and set up a political council. In that way we should have a fair organisation, fair not only for the purposes of defence but fair also in maintaining our standard of living.

8.8 p.m.

Mr. John Grimston (St. Albans)

In the earlier part of his speech, the hon. Member for Coventry, North (Mr. Edelman) effectively deflated the argument advanced by the right hon. Member for Huyton (Mr. H. Wilson) about the effect of stockpiling on the present raw materials shortage. That bogey has been raised so often that it cannot be too frequently contradicted.

The fact is, in relation to the industry with which I am particularly concerned— non-ferrous metals, which are particularly short— that the great majority of the American stockpile was bought a long time before Korea was even thought of by anyone. More than 90 per cent. of the American stockpile of zinc was bought between 1945 and the middle of 1950— long before Korea. To attribute American stockpiling to grabbing for raw materials after Korea is to misread the situation. Unless we can examine and appreciate what has led to our present difficulties we shall not be able to take the necessary steps now to adopt proper policies in the future.

The right hon. Member for Huyton went on to say that the danger of the present situation is inflation in America. We would all agree, I think, that the danger of the present situation is inflation both in America and here—

Mr. Stokes


Mr. Grimston

Everywhere, I quite agree. The measure of inflation is clearly the amount of money chasing the supply of goods. But in America motor cars are virtually unsaleable, coal and radios are virtually unsaleable, timber is very difficult to sell and cut-price wars are going on in the stores. Is that a measure of inflation or is it not a sign that the supply of goods has caught up with the demand and the usual correctives are being applied?

If we are to understand the present situation, we must realise that the steps the Americans have taken to fight inflation have been vastly more effective than the steps that have been taken here. Cars are not readily obtainable here, nor is coal, and even timber is not too easy to obtain. Therefore, to blame inflation in America and the steps she has taken as bringing about the present shortage is to misunderstand the cause of the present situation.

Also in his speech the hon. Member for Coventry, North (Mr. Edelman), raised an argument I have heard him use before, that it was at the time of the Korean war that people in this country began to appreciate the shortage, particularly of metals. That was not so. The Minister of Supply whom I have been chasing on this matter for a very long time, knows full well that nearly two years ago, on 2nd January, 1950, our trade told his Ministry in his Ministry and I have the agreed minute here— that we could not view with equanimity the running down of stocks in zinc and wanted to see a stockpile of zinc and copper. That was six months before Korea and immediately after devaluation had taken place and had shown that the upturn in demand which we expected would take place in America was beginning to gather momentum.

If you are buying commodities on a large scale you have to take notice of the advice given, and our principal complaint against the Minister of Supply has been that he has ignored our advice when we have given it to him. We hope very much that if we tender similar advice to the Lord Privy Seal, he will act on it more quickly. I was sorry that in his opening speech the Lord Privy Seal claimed as an advantage of his present arrangement the fact that he had consulted trade associations on the division of responsibilities and so on and— quite unintentionally, no doubt— the impression was gained on this side of the House that trade associations generally approved of the arrangements which had been made.

I think he will agree that the questions he directed towards the trade associations were not whether we felt an extra Ministry was necessary or whether we wanted to see a Minister of Production on top of the whole thing, but purely whether this or that particular function of the Ministry of Supply in the new set-up should be administered by the new Ministry, or by the old Ministry.

I quite agree that on that kind of point he consulted trade associations, but our criticism from this side of the House of the proposed set-up is that it is not at all clear where the various functions are to be permanently placed, and it is certainly not clear to us that it is necessary to have another Ministry. We might very well agree in certain circumstances that another Minister was necessary but why, to administer powers already in the hands of a Ministry, we must set up a new Ministry, is beyond us at present.

The hon. Member for Rotherham (Mr. Jack Jones) has clearly shown that in steel it is impossible to draw a line between the varying sections of the trade and, indeed, the points at which the line has been drawn still show anomalies, such as nickel, chromium and so on, which are in the hands of the Ministry of Materials and are no longer to be kept with the same Ministry that controls steel itself. In regard to all other metals in the nonferrous metal trade, precisely the same anomalies will exist.

The new Ministry will be responsible for buying our raw material and seeing that enough of it goes into the rolling mills, but such products as slags and residues will again become the province of the Minister. We shall have some of the non-ferrous metals going to the Ministry of Supply and some reverting to the Ministry of Materials, and surely that will make for a great deal of confusion of exactly the kind of which we have heard in the steel industry, and I do not think it will improve relations between the Government and the industry over existing arrangements with the Ministry of Supply.

Mr. Stokes

May I put this to the hon. Member, as indeed to some others who have spoken in the debate? Can he not take a broader view? Some of these materials come practically wholly from the other side of the Atlantic and it would be absolutely impossible to deal in textiles and other materials unless we were dealing with those materials at the same time. It may be an inconvenience to industry I admit, but what we have tried to do is to arrive at an arrangement which will inconvenience industry as little as possible while giving the Ministries powers for negotiation in the international field.

Mr. Grimston

I am grateful to the right hon. Gentleman, because I was hoping to come to that point later. I do not think he can possibly do the job unless he controls pretty well everything brought into this country. If he wants a little more copper and has a little oil to trade for it, that is part of the deal. If that were the proposal, I would support him; but the proposal is that the buying should be in the hands of three or four Ministers, and I have no doubt he would like a great many more commodities than he has got. The fact remains that the object is now to hive off a few sections of two Ministries and combine them into yet another. That does not concentrate functions at all, but simply diversifies them further.

The whole argument of the right hon. Gentleman and the hon. Member for Coventry, North, is centred on these commodity committees which are meeting in Washington and the right hon. Gentleman said that he does not expect any results until the last quarter of this year. He is afraid he will not get very much progress. I am less optimistic than he is and my impression is that they are rather bogged down at the moment and many of the people have gone home to report to their own Governments. But an interesting sidelight has come from these commodity committees that there is an increasing demand for opening up commodity markets, which is the very thing we on this side of the House have for years been pressing as the most sensitive barometer we could possibly have of supply and demand, production of alternative materials and so on.

The right hon. Gentleman, in giving some advice to industrialists a month or so ago about the shortage of steel, gave some excellent and typical advice. He said, "There is lots of steel— go and scrounge it." I should like to give him the same advice about marginal supplies of raw materials. I believe there are a lot of marginal supplies in the world and the present policy of the Ministry of Supply to prohibit private importation of the materials for which the Ministry is responsible for buying in bulk should be reversed.

I look to him to do it because I think the marginal supplies are in the world and only the user can determine whether or not his product will stand the high, price of whatever the small supply of a commodity available will cost him. That decision should be put on the consumer and if the Minister does not want to buy a substantial lot of metal or any other commodity, he should see first that currency, or whatever is necessary, is made available to the private importer and see that no other obstacle is placed in the way of such private importations. The right hon. Gentleman prides himself on not being a doctrinaire type of man and I hope he will succeed in getting through that alteration in our policy for which we on this side of the House have been asking many months.

In his opening remarks, the right hon. Gentleman described this operation as re-hiving two sections of the Ministry. I think that I am one of the few practising beekeepers in this House. I know of only two others. When one unites the bees from two hives, one must make them smell the same, because they fight unless that is so. Unless the same drive and policy which the Minister can enthuse into this Department is to be put into both sides of the new arrangement, it will lack any of the advantages which it might otherwise have.

There is another small point I should like to mention. That is the matter of importing materials for re-sale abroad in those cases where the export has been cut down. The right hon. Gentleman' will know that many exports have been greatly reduced in volume. I hope that a further argument in favour of the import at high prices of marginal materials will be that the Minister will thus allow traditional exports to continue in greater volume than they might otherwise do.

I believe the buying of material such as will be undertaken on a vast and colossal scale by the right hon. Gentleman can only be done if it has a kind of philosophy underlying it, that they must be bought on the longest possible terms. I do not believe the present high prices attract, for instance, the new mining venture to start half so much as the fear of a collapsed market by the time they are in production deters it. Therefore, the main step the Minister ought to take is to operate true commodity markets at the same time with guaranteed tonnages, outputs, sales or purchases of whatever it may be from abroad.

I agree that there are many of our raw materials which are running out throughout the world. I am quite certain they can be developed to meet our rising requirements, but only if sufficient guarantees of sale of the output are forthcoming from the Ministry. If the Minister does that, I am certain that some good will come out of this new Ministry; but I still feel that what we need is not a new Ministry, but a new Minister in the Ministry of Supply, which would be a much better step, or else some man over the Minister of Supply— and it could well be the right hon. Gentleman— with no Departmental responsibilities whatsoever, who would be able to go and knock together the heads of people in any part of the world where obstruction, vacillation and bumbledom are hindering output, because that is happening today in so many places.

8.22 p.m.

Mr. Albu (Edmonton)

I hope, in the course of the few remarks I wish to make, to follow up some of the points raised by the hon. Gentleman the Member for St. Albans (Mr. Grimston), who seemed to me to be advocating long-term bulk purchase agreements for ensuring adequate supplies of raw materials for this country in the future. It is to that particular aspect of the problem that I want to direct my remarks. I was pleased that the Minister, in introducing the Bill, both in his opening and closing remarks, referred to his responsibilities for the long-term development of our raw material supplies in this country and our conservation and substitution policy.

Some of my hon. Friends and some hon. Members on the other side of the House have assumed— of course, they understood the personality of my right hon. Friend— that his function was to be something like that of the noble Lord who was the Minister of Aircraft Production in our darkest hours during the war. That was to conduct some sort of smash-and-grab raid on the raw material stocks of the world on behalf of this country. We welcome the energy with which the Minister has pursued his task, but I think he understands that the present position in which this country finds itself is only an extreme example of what is in fact a very long-term problem. Although hon. Members who have spoken today have, on the whole, recognised that, I doubt if it is recognised in the country as a whole. It is very important that it should be recognised.

The recent Economic Commission for Europe Survey of Europe in 1950 pointed out the general position of Western Europe in regard to supplies of food and raw materials. The symptoms, they point out, vary from time to time. They sometimes appear as a worsening of the terms of trade, which seems to be permanent in the case of most materials; sometimes in the shortage of dollars because so many materials come from the dollar area; sometimes they appear as an absolute shortage of supply, that is to say, materials cannot be obtained at any price or in any currency. The Survey says: The prospects of an adequate increase in production in the longer run look hopeful for oil, tin, cotton and rubber, but the outlook for other materials may depend on a more direct interest being taken by European countries in their development. They added that there are no signs that the supply position of these commodities will improve immediately after 1951.

I believe we all understand the basic causes of this situation. They are, first of all, the world population, which is increasing at the rate of 20 million a year; they include also the increasing industrialisation of many countries, some previously considered backward and some more generally considered to be commodity or raw materials producers, with the result that they are themselves consuming more and exporting less. Finally, there is the enormous increase of the United States manufacturing output. It is not only due to the recent activities of the United States, both in stockpiling and increasing production for defence purposes. It is not in any way blameworthy in the way which the right hon. Member for Huyton (Mr. H. Wilson) implied. It is the natural expansion of population and industrial productivity in the United States.

My hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith), referred to the United Nations Scientific Conference on the Conservation and Utilisation of Resources held in 1949. In one of the papers read at that conference, Mr. H. L. Keenleyside, of Canada, pointed out that in 1948 the United States consumption of pig iron was 790 lb. per person, and that of the rest of the world 47 lb.; and that, if the consumption of the rest of the world had gone up to half that of the United States, there would have been a total demand of 450 million metric tons per year, whereas production in 1948 was only 109 million tons.

In the same way, if the consumption of copper by the rest of the world had gone up to half of the United States consumption. the demand would have been for 10½9 million tons, against a total production of 2½35 million tons. For aluminium, the figures are 8½ 7 million tons and 1½ 54 million tons; lead, 8½ 3 million tons against 1½ 72 million tons; and zinc, 6½ 8 million tons against a world production of 1½ 7 million tons.

I am sure that hon. Members will think that such a level of consumption by the rest of the world, equal to half that of the United States, can only be visualised in the far distant future, but of course, throughout the world, as has been pointed out during the debate, manufacturing activity and production have been rising at a far faster rate than that of commodity production.

A very interesting article appeared in "The Banker" for May, 1949, by Mr. Ernest Stern, who pointed out that world manufacturing and mining output had increased by 60 per cent. over 1937–38, whereas the production of virgin raw materials had only increased by 34 per cent.; of metals by 24 per cent. (mainly aluminium) and of fibres by 36 per cent., including a very big expansion in artificial fibres. The countries of Western Europe are never likely again to return to the. days when the industrial producers were able to exploit the primary producers. We are not going back again to the days of cheap food or cheap coal or cheap minerals, and we have to adjust our economy to this new situation, and the people of this country have got to understand it.

This article also points out that, in the opinion of Mr. Stern, prices will remain at or above the level of the present high cost producer, and the hon. Member for Bury and Radcliffe (Mr. W. Fletcher) made a plea, which sounded rather extraordinary as he made it, that we should pay much higher prices in future, but I think I understood what he meant. He was saying that, if we are to get supplies in future of our raw materials, we shall never be able to get them again at what I call the exploitation prices which were frequently paid by ourselves and other industrial countries in the past. I think that what he was also trying to point out was the danger that if there were, as we all hope will shortly come to pass, an easing of the international tension, so that there would be at any rate a considerable unloading of private stockpiles of raw materials, there might be a very rapid slump in prices.

Such a slump, though it might appear as a temporary benefit, would be no benefit in the end, because, once those materials thrown on to the market were consumed, as happened in wool after the war, the prices would then rocket again. In the meantime, high cost producers would have gone out of production and expansion of the production of materials, mining exploitation, and so on, which should have taken place would not have taken place. If the present agreed policy of full employment and the development of backward areas, and so on, were put into operation, there would then inevitably occur very shortly again a shortage of many of these raw materials. As I say, prices would then rocket again, and this country, because of its economic position and its reliance on imports and the use of those imports for exports in order to feed its people, would find itself in an extremely difficult position.

We do not want ever again a return to the violent fluctuations in the price of commodities which took place before the war. I was not in the commodity market then, but was merely a purchaser of some raw materials for manufacturing purposes. From my experience, the fluctuations were absolutely fantastic. I cannot see how there can be any orderly expansion of raw material production under such conditions.

I am afraid I cannot go all the way with my hon. Friend the Member for Coventry, North (Mr. Edelman), because, although I agree with the necessity for international allocation and international agreement, particularly between producers and consumers, in order to procure an orderly expansion, I am afraid it will be many years before that is achieved. Meanwhile, I am certain that we in this country must do everything possible to make ourselves safe from and independent of— and I say this in no hostile spirit fluctuations in the American economy. I do not know whether the American economy is going to fluctuate or not in the future, but I do know that if it fluctuates only 5 per cent. the variations in prices and the availability of materials are going to have an extremely harmful effect on the economic life of this country. Therefore, it is essential that we should have plans for developing our raw material supplies.

I very much welcome paragraph 2 of the White Paper, which makes it clear that it is the responsibility of the Minister to see that there is an expansion of sources of supplies, a conservation of materials, a development of substitutes, and so on. I suggest that he should use his powers to establish within his Department a permanent expert group of economists and technologists for the purpose of making a continuous study, not only of price changes, market conditions and economic changes, but also of the technological changes which are taking place both in the use and development of materials and in the use of substitutes, and so on.

I believe there is some sort of advisory committee of scientists which has, in a dilatory sort of way, been considering this problem during the last two or three years. I think it is one of absolutely first-class priority, but one which, if this country is to survive at all, is also of long-term importance. I hope to see such a group, making a continuous study, established in my right hon. Friend's Department so that we can work out the very best methods not only for the sort of long-term agreement the hon. Member for St. Albans (Mr. J. Grimston) was suggesting, by bulk purchase—

Mr. J. Grimston

Why bulk?

Mr. Albu

Very well, a long-term agreement made by the Minister. I will not put it in any other way. After all, I think one hon. Member asked why it is that private industry and private firms cannot be left to themselves to think out and develop their own ideas but the average private firm does no long-term thinking. [HON. MEMBERS: "Oh! "] I very much doubt whether the average private firm in this country does any long-term thinking on these economic problems. It is absolutely essential that there should be, under the control of the Cabinet, a Department and a group of people continuously thinking about these problems and working out methods not only of saving materials but of providing substitute materials —

Mr. Osborne

Does the hon. Member really think that firms like Lever Brothers, I.C.I., and Dunlop's have no long-term planners or long-term planning departments?

Mr. Albu

I never know whether or not to quote hon. Members from their own mouths but hardly an industrialist on the other side ever gets up without pointing out that British industry is not represented by Lever Brothers, I.C.I. or Dunlop's. There are, in fact, about 200,000 firms. I have been employed mainly by firms of 500 people and they did no economic thinking at all. I see no reason why the Minister should not take advice from large firms who have the staffs, but I think it is necessary that within the Government there should be a group of people continuously studying these problems on which the whole life of this country is going to depend.

8.37 p.m.

Mr. Odey (Beverley)

I do not propose to follow the hon. Member for Edmonton (Mr. Albu) in his very interesting economic survey, because I want to address myself specifically to the proposal in this Bill that we should have another Minister. I approach this problem first and foremost as a taxpayer. At a time when we are faced with enormous Government expenditure and when both sides of the House are concerned with the unwieldy growth of the bureaucratic machine, it would take a great deal to persuade me that another Ministry is necessary.

When I see a picture of the Lord Privy Seal hiving off with 2,000 drones— I am only following up a simile, of course— to establish this new Ministry, and when I hear suggestions made by the hon. Member for Edmonton that the Minister should add to his staff a vast concourse of economic experts to advise him on what raw materials are available and how they should be developed, I begin to wonder whether the remarks in the Financial Memorandum that, … the increase in the total provision which Parliament has been asked to make in the field of raw materials for the current year is not expected to he large. will be realised in actual experience.

It is not only as a taxpayer that I address myself to this problem and I should like to say something with regard to the White Paper and these proposals as they affect leather. I see that in paragraph 8 it is suggested that, The Minister will be responsible for hides and skins, leather and tanning materials. I must confess that I have a considerable interest in the subject of leather. I recall that during the war leather came under the Ministry of Supply, and boots and shoes, with which leather is normally intimately associated, or should be, was handled by the Board of Trade. As a result there were very serious administrative inconveniences. Following that, the question of leather was ultimately removed from the Minister of Supply and, as the right hon. Gentleman the former President of the Board of Trade has said, was dealt with for a time by a raw materials department of the Board of Trade.

We were told by the right hon. Gentleman, who should know, that "prayer meetings" were held every morning— and he knows a great deal about prayers, or he did— to settle inter-Departmental disputes with regard to the allocation of raw materials. As a result the raw materials department in the Board of Trade was in turn dispensed with, and we reached a stage, which I suggest is a very rational and proper stage, where boots and shoes and leather were all dealt with by the same department in the Board of Trade. Now we have this proposal, the result of which would be to reverse the entire arrangement, and leather is to be divorced from boots and shoes. If I may say so, it seems not only a soulless but a very incompetent suggestion, and I cannot believe that it will add to the general efficiency of the industry.

I see in paragraph 13 of the White Paper: The structure of the jute industry makes it inadvisable to divide the responsibility for raw jute and lute goods as a whole… Therefore, the Minister will be responsible for jute goods generally in addition to raw jute and jute yarn. I should like to ask the Lord Privy Seal, if it is inadvisable to divide raw jute from jute goods, why should it be advisable to divide leather from boots and shoes? I hope he will consider this matter again.

I have considered what other possible reasons could have led to the inclusion of leather in this new Ministry. The Lord Privy Seal will recall that at the beginning of 1950 the leather industry was de-controlled and the procurement of raw materials was handed back to private hands. That arrangement, bearing in mind the rise in prices of all raw commodities, has worked extremely well, and particularly well in the case of leather, because in the last three or four months the price has fallen substantially. Not only that, but the supply position has entirely eased. Leather is one of the materials which has been handed back to private enterprise, where the record is extraordinarily good. If there is a surplus of leather at present, what conceivable reason can there be for including leather or tanning materials in this new Ministry?

I want to remind the right hon. Gentleman of the productivity figures for the leather industry which are provided to the Board of Trade by the trade federations. If we take 100 per cent. as the basis for 1946, then by 1950 the figure had risen to 114½2 and for the months of January to April, 1951, it had risen to 116½4. As I have already said, there is no shortage of leather. In fact, there is a surplus for all conceivable requirements, including Service requirements.

Mr. Stokes

The hon. Gentleman should not be under the delusion that I am taking over only materials which are in short supply. That is not the idea at all. I am taking over the whole range.

Mr. Odey

Perhaps when he winds up the debate the Chancellor of the Exchequer will indicate what are the reasons for taking over leather. The industry are only too anxious to work whatever arrangements have been made, of course, but the right hon. Gentleman must surely realise that when these reorganisations take place, they lead to great dislocation in the industry. That is one factor which should be borne in mind before these large numbers of civil servants are transferred from one Ministry to another, and before men who, in recent years, have become acquainted with certain industries are suddenly removed from their environment in order that other industries may be placed in their care.

Those of us who have been engaged in industry during the war and since, and who have been responsible for dealing with the appropriate Government Departments, have all gone through the phase during which we have had to educate civil servants in the details of the industries with which they were endeavouring to deal. Surely this critical moment, when our whole re-armament programme is getting under way, is not a moment to carry out such a major dislocation.

If the Minister must go forward with this proposal for a new Ministry, I hope he will reconsider his decision about leather and will see whether the affairs of the industry can remain at the Board of Trade, in conjunction with the great boot and shoe industry which it so largely serves.

8.48 p.m.

Mr. A. Edward Davies (Stoke-on-Trent, North)

I shall take up the time of the House for only a few minutes to mention one or two points which are in the minds of some of my hon. Friends and myself. They concern the division of functions. I shall not pursue the hon. Member for Beverley (Mr. Odey) into the subject of leather.

I thought that when the Prime Minister sent my right hon. Friend to America the arrangement was widely welcomed. It was not looked upon in a party way as a step to support a Labour policy. It was accepted that we were in serious difficulties about certain raw materials, and all of us, on whatever side of the House we sat, were most anxious that if anything could be done to avoid dislocation, it should be done.

We had been pressing the Americans, by correspondence and through other channels, to give us some assistance, and following the visit of the Prime Minister to America it was thought that the appointment of my right hon. Friend to go to America specially to discuss our problems on the spot would be most helpful. I thought that the House and the country welcomed that decision. I must say, in passing, that we are all highly delighted with the success which attended his efforts. We know him to be a vigorous and robust personality and man of business, not a mere theoretician, and not even only a man out of the top drawer, but a man with both vertical and horizontal vision and ability.

I think that no matter what was done about the setting up of a Department concerned with materials there would have had to have been something arbitrary about it in the nature of the case. Wherever we draw the line, there will be difficulties. As I see the position, my right hon. Friend's new Department will be a procurement Department. My right hon. Friend is to assist industry to obtain materials which are in short supply. He is to act as our liaison in the world's councils where these matters are discussed. In short, he is to do his best in a time of emergency— although, as we have been rightly warned today, this is not a matter to concern us only for a few months but one which is likely to concern us for a number of years.

I would point out, however, that in the matter of iron and steel there is widespread apprehension in the country. There are certain basic materials which will not come within the purview of my right hon. Friend. Coal is one, and iron and steel are others, and there are one or two other things. He is not proposing to have anything to do with coal or iron and steel. He is not to be responsible for the procurement of certain materials such as manganese ore, ferro-manganese, scrap iron, and so on. I do not know what arrangements are to be made about the allocation of iron and steel, but I do not think it is beyond the scope of the debate to consider the question of iron and steel.

It is estimated that there will be 10 per cent. less iron and steel available at the end of the year, and that there will be about 20 per cent. less available for civilian use. So I am advised. I understand that there may be a high level of production, but that there are certain difficulties in respect of coke, pig iron, scrap iron, and iron ore, and that these are linked up with shipping difficulties. Manufacturers—notably motor car manufacturers, on whom we depend to a great extent for our exports—are apprehensive as to what is to happen. Industry is not quite satisfied as to what the development is going to be, and upon what the emphasis will be—whether upon sheet metal or other specialised forms of iron and steel required for manufacturing purposes.

I should have been better satisfied if we could have had this matter placed in the hands of one Ministry. I notice, by the way, that the Minister of Supply is not quite satisfied with the present arrangements so far as his Ministry is concerned. There are difficulties in the procurement of iron ore, and I believe that the Iron and Steel Federation are unwilling to give up their powers. I wonder how this will affect the work of my right hon. Friend's new Department and its responsibilities.

What is the position to be? Is he to be only our procurement officer? Is he to be responsible for purchasing all of these supplies? I think he said that he was not. There, again, a whole series of difficulties occurs to our minds. Is he to compete in some way for supplies of commodities which are limited in quantity in the world markets? With whom is he to compete? How is this control to be exercised by him?

I suggest that this problem of iron and steel is not remote from the problem which we are discussing today. As my hon. Friend the Member for Rotherham (Mr. Jack Jones) has said, it is vital. There is widespread apprehension in the country that this division of functions will not produce the results which we expect.

When we went into re-armament, we undertook to saddle ourselves with great commitments, financial and economic, so far as productivity was concerned, on the assumption that the supplies would be forthcoming; that there would be a sharing out of the basic supplies among the Allied nations; and I voted for re-armament reluctantly upon that assumption. Unless co-operation is forthcoming between America and the other nations involved in this great re-armament programme, and they are willing to play the game in such a way as not to prejudice our civilian economy to the detriment may be of our social services, of employment in this country and of all the good work for which our people have made sacrifices over the last five or six years. it is not good enough.

In these circumstances there should be a review of the re-armament programme, with a view to slowing down our undertakings, because it would seem to me to be foolish to overburden ourselves in this way by seeking to re-arm the country and, at the same time, completely to upset the civilian economy and cut the standard of living of the people of this country.

We are already feeling inflationary effects in this country. All of us when we go to our constituencies see that from day to day. We know that much of it was to be expected, but if someone is obstructing, deliberately and selfishly, and making it more difficult for us to do the work to which we have pledged our hands, I for one, without being a Bevanite or any other kind of "ite," although prepared to defend my country and make sacrifices, am not prepared to sacrifice the people to the great disadvantage of their standard of living, employment and social services if it means that someone else is not playing the game, if, because of their selfishness, things are not working out as we originally hoped they would. I hope that this will be borne in mind as we progress in this matter, and that we shall adjust our programme in the light of these considerations.

8.58 p.m.

Mr. Watkinson (Woking)

I hoped that someone would say a word of welcome for this new Ministry. I think that the right hon. Gentleman would have left the Chamber in disgust if he had taken any note of what has been said to him by hon. Members who have spoken from the benches opposite. No one opposite has welcomed this new Ministry in its present form. At least, we on this side of the House have been entirely consistent, and in all our approaches to the problem we have hammered at one solution which I believe to be the right one.

I listened with great pleasure to the hon. Member for Rotherham (Mr. Jack Jones), and I think that we all agree with what he said so well about the dangers to our future and to our children's future if we do not solve this problem of securing adequate raw materials to keep our industries going. This is not a party matter; it is a question of trying to find the best possible way to get this country and its industries through the difficult period of shortages in raw materials which we all know lies ahead. It is quite obvious that hon. Members opposite do not think that the solution put before them by their own Government is the right one.

It is quite obvious that most of us on this side of the House, who have approached this problem by many different and practical channels from the point of view of our own individual industries, think that the right solution would be to appoint the right hon. Gentleman the Lord Privy Seal as an overall co-ordinator and "troubleshooter," who would be free to go about the world sorting out these difficulties of raw materials, and who would not be burdened with Departmental responsibilities.

I am a little surprised, personally, that the Lord Privy Seal, who has just come in, and whose long background of business experience I know well—[Interruption.] I quite agree, and if the hon. Member would like it on the record, I will admit that the right hon. Gentleman who has just returned has been absent from the Chamber only about three minutes. I am sure that he deserved that, after sitting long hours through this debate.

If I may return to my point, I must say very sincerely that I am rather surprised that the right hon. Gentleman, whose long experience in the engineering industry I well know, has agreed to lend his talents and knowledge of the way in which business is run to this particular sort of set-up, because the only result will be a kind of political shadowboxing. That is the only job which his Ministry can perform in its present setup.

Let me suggest, from the purely practical standpoint and the angle of practical application, how I think this new Ministry will work out. If I am wrong, perhaps the Chancellor will correct me. The vital question is whether this new Ministry will assist British industry to get over its difficulties more successfully. Let me take the case of the grinding wheel industry and the abrasive which provides the wheels which, as the Minister of Supply knows, are essential to the production of steel, aircraft engines, motor cars and almost any other manufactured articles made in this country. Let us see how that industry fares in regard to this new Ministry. Will it help or hinder it? Already, the industry is suffering grave difficulties through shortages of various raw materials, particularly phenol, which was mentioned by my right hon. Friend in his opening speech.

The first thing we find in discussing this new set-up is that the purchase of abrasives is to be transferred from the Ministry of Supply, where it has rested quite successfully and happily for a number of years, to the new Ministry. The first thing I should like to ask the Chancellor is whether the civil servants who have spent many years in getting knowledge and expertise in the abrasive industry are to go to the new Ministry? If not, there cannot but be a great fall in the efficiency of the Ministry, unless those civil servants who have an expert knowledge of this very expert industry and of these very difficult raw materials are to be transferred to it. If that is not so, the new Ministry will certainly be hindering instead of helping.

Mr. Albu

Will the hon. Gentleman give way? Is he suggesting that phenol is used in its natural state in the grinding wheels industry?

Mr. Watkinson

Perhaps the hon. Gentleman will contain himself until I come to that point, when I will answer his question. I am dealing with the raw materials of that particular industry, which are abrasives. The point I am making is that there will be much less efficiency if these expert civil servants are not transferred to the new Ministry, and, even if they are, the whole transaction is completely pointless, because, in the M.2 section of the Ministry of Supply. the purchase and procurement of abrasives has run on perfectly satisfactory lines, although the material itself has always been difficult and scarce and is a dollar raw material. There is no advantage to us as manufacturers of abrasives as a result of this change. The next question is whether it is an advantage to us in cutting down the number of Ministries with which we have to deal, when, in fact. it adds one to the number.

Let me now answer the question which the hon. Gentleman asked about phenol. The point is that it is an essential component of the resin, synthetic or natural, which is used in certain types of grinding wheels. The position is now quite fantastically complicated, as the new Ministry, which now has control of abrasives, also controls sulphuric acid, which is an essential component in the manufacture of synthetic phenol, which is a by-product of benzol, so that, instead of dealing with four Ministry's we now have to deal with five. As far as I can see, my industry, which I do not think anyone will deny is vital to increased productivity; has had a further load put upon its back. We are perfectly satisfied with the present arrangements; we have grave doubts whether we are likely to be satisfied with these new arrangements.

I support the plan put forward by my right hon. Friend for having the Lord Privy Seal in the capacity of a co-ordinating Minister. In the manufacture of this type of wheel we shall have to deal now, if this Bill is passed—which I hope it will not be—with the Ministry of Materials, the Ministry of Food, the Ministry of Fuel and Power, the Board of Trade and the Ministry of Supply. The Ministry of Supply have, for example, over 40 main Departments and something like 250 trade committees associated with it.

With all this multiplicity of channels, surely the one thing any Government that meant business would have done would have been to appoint a powerful businesslike person to co-ordinate the whole thing, streamline it and see that industry got what it wanted. That would have been the action of any Government that really meant business in this re-armament drive and in the increased productivity which we all want to see. I would only say that, instead of doing that, the Government have created a hydra-headed monster and put great burdens on industry instead of creating an administrative Measure to help industry to do the job which everyone realises must be done. I hope we shall go into the Lobby against this Bill. I think it is a bad Bill and that it sets up a bad and unnecessary Ministry.

9.7 p.m.

Mr. Harold Macmillan (Bromley):

The Lord Privy Seal began his speech this afternoon with a reference to the absence of the President of the Board of Trade. We all regret his absence, and more particularly regret the cause for it. I should like to associate myself and my right hon. and hon. Friends with the wish that he may make a complete and speedy recovery.

The Lord Privy Seal went on to use a rather curious phrase. He said that he was able to tell the House that the President of the Board of Trade supported the policy contained in the Bill. I thought this this was not a very felicitous form of words but, on the other hand, having regard to recent events, perhaps it was an assurance which it was just as well to give to the House. This debate is, for many of us, of a nostalgic character, for although the Bill is a machinery Bill and the White Paper refers mainly to the procurement of raw materials, it is, in the widest sense, associated with other related problems.

We recollect the fierce contests that used to range round the vexed question of priorities during the war and the classic figures in those heroic battles. We remember the gradual disappearance of the cruder methods of priority and the development of a more flexible system of allocation. Mine was only a very humble part in those early but formative stages. For nearly two years, from the spring of 1940 onwards, I was Parliamentary Secretary to the Ministry of Supply, and I served three chiefs in turn, the present Foreign Secretary, Sir Andrew Duncan and Lord Beaverbrook. That in itself is a unique record.

I learned a great deal about a very large range of subjects. Many mistakes were made during the early stages. We had to improvise and adapt, and no one is more familiar with those difficult days than is the Lord Privy Seal himself. At that time he was a tireless and formidable critic, yet I think he would admit that the broad structure which has emerged has stood the test not only of war but of post-war pressures.

Paragraph 17 of the White Paper attempts, but, I am bound to say, in rather obscure language which may be misleading, to give a summary of the general system of allocation. I shall have something to say on that matter later. Any system, however perfect in theory, depends for its success on the personalities who administer it. Members of committees must have confidence in the chairman who presides, in his loyalty and impartiality, his fairness and his common sense—above all, in his common sense. There was a great Scottish Divine who said, "The grace of Almighty God can do muckle, but it cannot give a man common sense." If the Lord Privy Seal had then been entrusted with this work, we should have had a man of common sense.

We must be careful not to press too far our war recollections. Most of us hoped that by this time we should have advanced to a position where the purchase and procurement of raw materials would have reverted to private hands, except perhaps for transactions involving currency difficulties. It is a mark of the deterioration of our affairs that in spite of the genuine efforts of the Government to keep control of many commodities and to restore free markets, many materials still have to be obtained by direct Government purchase. This policy can only be justified by genuine and over-riding technical difficulties, and it can only be continued or extended for purely doctrinaire reasons.

I admit that the transfer of responsibility from one Minister to another does not of itself affect this question. I was very glad to hear the Lord Privy Seal give us an assurance that he had no intention of enlarging the scope of public purchase. We ought to remember that we are not yet, thank goodness, in a complete war economy. We have three tasks of equal magnitude to perform: to produce for export, to produce for home civilian use, and to produce for the rearmament programme.

If the Bill had been framed to make necessary preparations against the danger of war and for the administrative system required in war, I could have understood it. It does such things as the Lord Privy Seal admitted, but I am equally anxious that it shall not help to create machinery which may be used to rivet a restrictive or dangerous system on our normal peace-time economy. That is one of the reasons why I do not like the Bill.

What is the real purpose of the Bill? What is its origin and what is the motive behind it? Those are questions which have sprung to everybody's mind during the debate. The Lord Privy Seal has not really answered them or even explained them. If it had been put forward as a further step towards a sound organisation, useful in peace, necessary during re-armament, and easily adapted to the requirements of war, I could have understood it.

I do not think that Ministers themselves make this claim. At any rate, such was not the view of the former President of the Board of Trade. In that part of his speech which he devoted to the actual Bill—apart from what he called "the background" he made the most terrible indictment of it. He prophesied that it would cause dislocation in the Government's relations with industry. He went on to say that it would lead to chaos, and that has to some extent been supported by other hon. Members. That is a fairly strong term for a man who was lately in charge of just these affairs. From both sides of the House similar criticism has been made by almost every hon. Member who has spoken.

I could have understood it if a Ministry were set up charged with the control of and the responsibility for all the essential instrument production other than labour; that is to say, all raw materials machine tools and perhaps even industrial capacity. In that case there would have to be all along the line a division of responsibility between procurement and use, with all its difficulties, but there would not have been a division of responsibility between procurement and allocation. There are difficulties about any such division, but that would be an essential part of a true Ministry of Production or Ministry of Raw Materials in its proper sense.

I could have understood it if it had been decided that a Minister but not a Ministry should take over special duties during this period, a period when, happily, we are not at war and when production for civilian purposes for both home and export are far greater than war production. Such a Minister could have been given two tasks, the first one related to allocation and the other to procurement. I use "procurement" in its largest sense, whether direct purchase or the general supervision of raw materials purchased on private account.

On allocation, the broad economic decisions would no doubt remain with the Chancellor and the Treasury. It is not quite correct to say, as the White Paper does, that the position which now exists has existed since 1939, because the Treasury did not then have the broad control which the Chancellor of the Ex.- chequer only obtained when, after the collapse of the previous Chancellor, Sir Stafford Cripps took both the economic side and the finance into his own hands. At any rate, it was not so in 1939 or during the war. I am not complaining about this; the Treasury ought to have, in the words used here, the "broadest general control."

Without disrespect, because I once belonged to that curious tribe of people who are not fish, fowl or anything else and are called "Parliamentary Secretaries," for whom I have a great regard, I believe that the new Minister, and not the Economic Secretary to the Treasury, should preside over any inter-Departmental Committee to implement the broad decisions which might be made for the broadest economic reasons. Of course, the detailed allocation of firms should be made where necessary either by the Departments themselves or by any appropriate machinery that may be set up, which may vary from industry to industry, as was our experience during the war.

As to procurement, the Minister would only be given the duty of advice, stimulus and general supervision, leaving the actual formal and legal responsibility for any raw materials purchases by the Government to the Departments now concerned, that is, the Ministry of Supply and the Board of Trade. In that way it would not have been necessary to have a Ministry, a Permanent Secretary, an accounting officer and all the paraphernalia involved. We should thus have had, at any rate at this stage, a Minister but not a Ministry.

I thought that the Lord Privy Seal almost seemed to prove this point in his own speech when he told us about the work he had done and hoped to do at Washington, when he told us—and very good news it was—about the work he hoped to do to stimulate production throughout the Empire and Common- wealth, when he told us about the work he hoped to do regarding scientific development, economies in use and substitutes—the promotion of work and interest in all those spheres. All this he could quite as well have done as a Minister without the support of a new Ministry, without taking over these immense functions.

When the right hon. Gentleman came to that part of his speech he spoke far more freely and with far more conviction. It was at the beginning of his speech, when he tried to define the machinery of this Bill that I thought that he was not, considering his great experience, so happy. By either of the methods that I have described a structure could have been set up which would be useful now and which could easily be adapted, if the worst should occur, to the needs of war.

But this Bill does neither of those things. It really does very little to develop the mechanism of government for the strain which may fall upon it. Nor do I see that it helps much to solve the problem during this twilight period. To be quite frank, I think that it owes its origin much more to the former Minister of Health and the former President of the Board of Trade than to anything or anybody else. If they had not resigned the Lord Privy Seal would still be Minister of Works. If those former Ministers had not declared that the future and prospective shortage of raw materials made nonsense of the whole policy of the Government, the Government would have left the responsibility where it was.

But the rebel Ministers exposed the weakness and the muddle that the Government had made. After all, they had good reason to know, for one of them was largely responsible. So the Government took refuge in a very old and hackneyed device—when in doubt, when under pressure, when in a jam, especially from the back benches, have a new Ministry. In 1945, if I remember aright, the party opposite wooed the electorate by the promise of a Ministry of Housing. It is true that they did not redeem the promise nor have they built the houses, but I do not think it has been the lack of the special Ministry which has been the trouble.

In a word, I do not think that this Bill represents a well-considered and carefully prepared plan, marking a new point in the orderly development of the machinery of government. It is not, if I might use the expression, the answer of grave consuls and senators to a national problem. It is the reply, perhaps, to the dangerous machinations of the Tribune of the people.

The House listened with deep interest to the speech of the right hon. Member for Huyton (Mr. H. Wilson), whom I am sorry is not in his place. Apart from his severe criticisms of the Bill, he devoted most of his speech to what he called the background, and it is into that territory that I ask the permission of the House for a few moments to follow him. We here, and I think the country generally, still find it rather difficult to discover the real facts about the raw materials problem. There is certainly a great conflict of evidence.

Some maintain that there is no serious shortage of raw materials and that the rearmament programme can be carried out with no real difficulty. Others, like the right hon. Gentleman, assert that the programme is not physically practicable with the materials available. Those were the words of the right hon. Gentleman's resignation speech. Others tell us that everything was all right before Korea. It appears that Korea is a sort of popular "get-out" nowadays. It is used to cover a multitude of sins.

I remember when I was a young officer those periodic checks on stores and equipment which were so awkward and sometimes, to us, so expensive. But, of course, on active service the lost blankets, the missing bicycles and the disappearance of tents and the like were all covered by the comprehensive and unanswerable formula, "destroyed by shell fire." So it is with Korea. I do not know what the Government would do without it; it is a sort of blessed word like "Mesopotamia" was to our forebears. In any event this is now the popular method of Government alibi, "Please teacher it was not me; it was the other boy." Sometimes it is, "That Russian boy, who is such a bully," and sometimes it is "That American boy, whose parents are so rich."

It never occurs to them to look closer home and blame their own lack of foresight. But the perplexing thing about the Korean excuse is that it is not borne out by the facts. The stockpiling activities of the United States have, in fact diminished since Korea as was proved by several speakers from this side of the House and by some hon. Members opposite. Tin, lead and wool purchases have been either largely discontinued, or reduced and purchases of copper and zinc have been spread over a longer period. It is true that in terms of money American stockpiling expenditure in the second half of 1950 was at the same rate as in the previous 18 months. But it is evident that when allowance is made for the great rise in prices the quantities are substantially less.

Can it then be that it is not all the fault of the Americans after all? Such a conclusion would be very dreadful. Some hon. Members opposite could scarcely bear it. Can it be that even after Korea had it not been for the usual dilatoriness of the Governmental machine as it now operates all would have been well? After all, the Americans do not control all the material in the world. Quite a sizable amount is in the sterling area in general and the British Commonwealth in particular. Can it be that in spite of repeated warnings from the right hon. and hon. Members on this side of the House—I remember particularly my hon. Friend the Member for Bury and Radcliffe (Mr. W. Fletcher) and more respectable hon. Members who might have been trusted in respect of all this—I mean hon. Members free of party prejudice—the Government have shown in spite of warnings the same complacency as they have shown over other major crises in the last six years?

Or is it perhaps in the pre-Korean period and not in the post-Korean period that we should look for an explanation? It is one of the weaknesses of bulk buying in time of peace, unsupported by the sweet and simple sanction of the navicert that if the main and governing principle proves to be wrong the effects are disastrous in every field of policy. Undoubtedly, 18 months or so ago the Government had a big gamble. They gambled on falling prices and they have been badly stung, as so many people have been in our financial history. They backed a horse called "Recession" and, as with many other sportsmen, their fancy let them down.

I think this is clear from an unusually very frank broadcast made by the Foreign Secretary last October. He lifted the veil a little and made this statement with all the injured innocence of the disappointed punter: At the beginning of the summer "—that is the summer of 1950— it looked as if there was going to he an easing of prices. That was the reason why they held out of the market for so long. They waited and waited for the fall in prices. That is why they got no meat from the Argentine and no newsprint or zinc from Canada; they were waiting for the prices to fall. And so all dollar purchases were frowned upon and all dollar sales were encouraged, no matter how vital to our economy these materials might be. Therefore, the stocks of materials were run down and the stocks of gold and dollars were accumulated.

Mr. H. Wilson

Since the right hon. Gentleman puts all the blame on bulk purchase, will he explain why it is that stocks of raw wool and other commodities bought by private purchase, which had been on private purchase for several years, declined almost more than any other raw materials bought in this country?

Mr. Macmillan

Because, of course, the Government do not allow them to buy without their permission and licence.

Mr. Wilson

Will the right hon. Gentleman say how many licences have been applied for or issued in the case of raw wool in 1950, or will he admit it was completely free from licence?

Mr. Macmillan

I quite agree, but I am saying that over the whole field the whole effort of the Government was to persuade people not to buy. The whole machinery of the Government was used for that purpose. The disadvantage—and I am not putting it at more than disadvantage—of this system is that, if you have a number of private estimates, some of them may be wrong, but some may be right; but, if you have one single view pressed by the Government, if that should be wrong you are wrong over a much wider field.

I am glad to see that the right hon. Member for Huyton has returned. I have something further I should like to say about his speech. The Ministers primarily concerned are now telling us quite a different story from the one they told us up to a few months ago. It is true that the difference is that they are now out of office, but I have always regarded them as very truthful men. Sometimes I think that the right hon. Member for Ebbw Vale (Mr. Bevan) suffers from an excess of imagination, but the former President of the Board of Trade follows a more prudent course. He is a statistician; he is even—if the term is not too painful—an economist.

I will say frankly that I did not much like the tone—nor did the House like the tone—of his words about the peoples, policies and administration of the United States. I agree with him about one thing. I think we have a fine British Ambassador in the United States, and I resent as much as he did the recent attack upon Sir Oliver Franks in the "Daily Express." I cannot imagine why he should be so objectionable in that quarter, for after all, he is not even an old Etonian.

This is not the occasion, nor is it my duty, to reply in detail to the right hon. Gentleman's charges. Perhaps I ought to declare an interest at once, because, like my right hon. Friend the Leader of the Opposition, I am born of an American mother. Perhaps I may also say this. The Americans have been good comrades and partners to us in war, and, since the war, they have shown to Britain, to Europe and even to the whole world a generosity absolutely unexampled in the history of the world. I think we should do far better to try to work, with good understanding and frankness as partners should do, but not with those words, like "whining" and "bleating" and all the expressions the right hon. Gentleman used. If that is the way in which he tried to negotiate with the United States, I can quite understand the position.

I must now turn from the background, and the right hon. Gentleman's remarks about the Bill, to the Bill itself. All that the Bill really does is to remove from the present Minister of Supply certain functions which he has failed, no doubt due to other occupations, adequately to perform, and to hand them over to the Lord Privy Seal. It truncates the Minister of Supply; or at least it amputates important parts of his ministerial body. It sets up another Ministry of Supply, to perform some, but not all, of the functions in this sphere which at present belong to the Ministry of Supply and to the Board of Trade. That is what the Bill does.

It can be argued that both these Ministries, the Board of Trade and the Ministry of Supply, are overworked and overloaded. But what is that due to? It is due to the Government's itch for interference with all industry, and, above all, to the crazy decision to proceed with the nationalisation of iron and steel. I am ready to admit that the Lord Privy Seal is a more sensible man than the Minister of Supply. They are both great capitalist magnates, but I really think that the Lord Privy Seal knows more about industry, and if he had been made Minister of Supply we should have been very glad; or if a much more radical re-arrangement, such as I have tried to describe, of Governmental functions and structure had been proposed, upon a sound and lasting basis, we should have been ready to consider it with sympathy.

There are many suggestions which could be made, some of which might involve new Ministries, but also involve the suppression or amalgamation of others. But this, like all the plans of the planning party opposite, is not really a plan at all. It is just a hastily botched up device. It has the fatal flaw of meeting an emergency situation, which may pass, by the creation of a new and permanent Ministry, with all the paraphernalia of Minister, Parliamentary Secretary, Private Secretary, Permanent Secretary, and all the rest. I should not be surprised if we got a second Parliamentary Secretary soon, or even, as the fashion is today, a Minister of State.

Mr. Gaitskell

The right hon. Gentleman was once in the fashion as Minister of State.

Mr. Macmillan

I have never been a Minister of State—never. The right hon. Gentleman assured us that there would only be an increase of staff of 100 or so as a result of this change. At least he was frank enough not to follow the usual procedure on these occasions, when it is claimed that the creation of a new Ministry will lead to a substantial reduction of staff. But if he puts it at 100—and we have had some experience of this over the last 10 years—I make a bet with him that within a short time it will be three or four times that number.

Mr. Stokes

I will take the bet.

Mr. Macmillan

All this will not, in my belief, facilitate, but will rather hinder business. It will create a new set of Departmental jealousies and inhibitions. It will give fresh opportunities for what Mr. Robert Sherwood called, in his admirable book on President Roosevelt's papers, "the bureaucrat's occupational disease—jurisdictional jealousy." In many cases, where responsibility is divided—and examples have been given today from all sides of the House—this will not help to clear the course for the unhappy industrialist. It will merely put up another fence.

I invite hon. Members to read paragraph 6 or paragraph 11, to both of which the former President of the Board of Trade called our attention. Take the case of cotton and wool, two materials which play a fairly important part in our economy. Here the responsibility will be divided. The White Paper says: The Minister and the Board of Trade will exercise their particular functions "— in regard to these materials— in close co-operation with each other. That phrase has a very familiar, almost ominous ring.

What it really means is, for the officials more inter-Departmental committees, and for the industrialist more hours of weary trudging from Department to Department, more correspondence pushed backwards. and forwards, more disappointments, more delays. The Lord Privy Seal told us that the Federation of British Industries and other similar organisations had been consulted as to this project. I am sure he did not wish to mislead the House, but "consult" is a rather ambiguous phrase.

It is my understanding that these bodies were informed of the Government's firm decision to set up this Ministry in this form. What they were consulted about was not whether they approved the project, but as to the detailed arrangements which might be made if the project materialised. In other words, it was like doing what used to be done in the Middle Ages. When a great State personality was condemned to death, he was consulted as to whether he preferred the axe or the silken rope.

Ministers having got into this jam because of their own folly had two courses open to them. The first and simplest would have been to dismiss the other Minister chiefly at fault. One had already conveniently gone. But then, think what might have happened. It was widely rumoured that the loyalty of the Minister of Supply was not altogether to be trusted. He had no doubt been screened from time to time by Transport House, but the result was, to say the least, uncertain.

When his Parliamentary Secretary deserted, it was thought that only the Minister of Supply's greater caution had saved him from that plunge into the icy water into which the President of the Board of Trade—a more simple character, it would appear—had been so firmly and so fatally propelled. Nobody yet knows quite how it happened. Was it suicide or was it murder? Not until the book is open and the letters are published shall we ever know.

It was impossible to remove the Minister of Supply for political reasons. Therefore, the only thing to do was to carve him up, and this Bill is the result. Accepting, therefore, the dogma of the immutability of the Minister of Supply, it might still have been possible to follow another course. The Lord Privy Seal might have been given, without a Ministry, but with a small and expert staff, the general task of supervision over the whole field of raw materials. In that event, the formal and legal authority would have remained with the present Ministers and Ministries.

But the Lord Privy Seal could have played a role which has often been played with conspicuous success by a senior Minister, charged with general functions, presiding over a team of Ministers specially concerned, and free from detailed responsibilities; able to go abroad and to stay abroad as long as is necessary for these negotiations. For all this we know that the Lord Privy Seal has great qualifications. He is sensible, genial and energetic. If it were possible to imagine the Minister of Supply being jollied along by anybody, the Lord Privy Seal is the man to do it.

The Government have followed neither of these courses. They have chosen a compromise which can only lead to more, and not less, confusion. The degree of this confusion has been well illustrated by speeches not only from the Conservative benches, but from the Labour benches and, indeed, from all sides of the House. The Lord Privy Seal has done his best to defend it in a thoroughly sportsmanlike way which we would have expected of him, but I do not think he is very happy about this organisation. A Minister, yes; a Ministry, no.

The country is not really looking for new Ministries. It is looking for a completely new team of Ministers. Meanwhile, we are forced to the conclusion, that this is a plan, as, indeed, was indicated by many hon. Members, including some who have lately held high office. hastily conceived and ill-contrived to cover up the administrative failure of the Government and to meet a purely political emergency.

9.45 p.m.

The Chancellor of the Exchequer. (Mr. Gaitskell)

The right hon. Gentleman the Member for Southport (Mr. R. S. Hudson) described this Bill as. raising no party issue, and I listened throughout the debate hoping I should hear from at least one hon. Member on the benches opposite what might be described as a reasonably objective speech. Alas, there was no such thing and the closing words of the right hon. Gentleman the Member for Bromley (Mr. H. Macmillan) were, true to his usual form, partisan in the extreme. I have no objection to having a party debate but let us not disguise it. Let us at least admit it is a party issue and we will fight it out.

This Bill is a necessary and valuable. one. It is made necessary by recent economic developments, particularly in the international field. The questions that arise when we consider this matter can be divided into three. First, is it desirable that some one Minister should, in present circumstances, have special responsibilities in respect of raw materials? Secondly, if so, should he be a coordinator—the favourite word of the Opposition, the word they have now selected—[An HON. MEMBER: "Supervisor."]—I beg pardon, "supervisor" was the word the right hon. Member for Bromley composed—or should he be a, Minister with direct executive responsibility?

One can put this more clearly perhaps by asking, should he, in carrying out those responsibilities, have to deal through other Ministers alone with no officials directly responsible to him in respect of materials, or should he have officials directly responsible to carry out his orders? The third question, if the answer to the second one is "Yes"—as we believe it is—is this: are the precise arrangements in the Bill the right ones?

As far as the first question is concerned, there is apparently no great division of opinion in the House. Certainly we all agree that at present the supply of raw materials and their prices are, between them, really the two most vital problems on the economic side with which the Government have to deal. In the one case, so far as supplies are concerned, we all know that the productivity of our industries in large part depends on our success in acquiring sufficient supplies of imported materials, and so far as price goes there is certainly nothing more important to our balance of payments problem than what we have to pay for our imports at the moment. I think we all know how very grave the situation is as a result of the extremely sharp rise in the prices of these imported materials.

How has this situation emerged? I must confess I do not think the Opposition's attempts to explain this solely in terms of some deficiency on the part of the Government are in the least bit convincing. Of course, it is quite true that devaluation had an initial impact on the prices of our imports. We never for one moment said it would not do that. But it is equally clear that by the middle of 1950, so far as our import prices were concerned, the effect of devaluation had been worked out.

There is a very simple and, to my mind, absolutely convincing argument on that. It is that since June, 1950, the movement of prices in the United States and in the United Kingdom has been almost exactly parallel. It is quite inconceivable that prices in the United States would have gone up as a result of devaluation here. The plain fact, of course, is that, while devaluation had an initial impact, it was as a matter of fact, even before Korea, caught up by the rapid expansion in the United States demand, in United States money incomes.

The United States of America suffered in the course of 1949 a slight industrial depression. It was that depression which I think most of us would say precipitated the devaluation crisis here, and as recovery took place in the United States, of course the demand for raw materials began to rise, too, and their prices went up. But all this, of course, has had a tremendous impetus from Korea, since June, 1950. When the right hon. Gentleman—perhaps one is wrong even to begin to take him seriously—speaks as though Korea were just an alibi and had no influence at all, I can only say that it is time he paid a visit to the United States and saw just what the consequences of Korea have been in that country, and through that country, of course, on the commodity markets of the world.

The right hon. Gentleman tried to make play with the responsibility of the Government in not being able to purchase in the course of 1950 the materials that we would have liked. My right hon. Friend the Member for Huyton (Mr. H. Wilson) very properly at once challenged him on wool which, of course, is a commodity imported on private account on open general licence, and in fact the stocks of wool have fallen a good deal further than most. Here are the figures for a wide range. Valued at the prices ruling at the end of 1950, there was a fall during 1950 in the value of stocks of materials in this country of some £97 million. Of this £97 million, £70 million were stocks in the hands of and imported by private traders. Of that £70 million, no less than £56 million were imported from non-dollar areas—that is to say, without the restrictions imposed on dollar account.

It is, of course, a plain fact which it is time hon. Members opposite recognised, as the right hon. Member for Aldershot (Mr. Lyttelton) long ago admitted in this House, that private enterprise on the whole was expecting a fall in prices at the end of 1949 and did not import on the necessary scale in 1950.

Mr. W. Fletcher

If the right hon. Gentleman is trying to be fair, which I find it difficult to believe, would he point out at the same time that those materials were being sold for dollars at the Government's request, and the Prime Minis- ter was asking private enterprise not to buy stocks of raw materials?

Mr. Gaitskell

That is quite untrue as far as the non-dollar materials are concerned. We were inviting the United States to buy rubber at that time in order to increase their stockpile and help us out.

Let me quote— my hon. Friend the Financial Secretary quoted it the other day, but the right hon. Gentleman seems to have forgotten it— what the right hon. Member for Aldershot said, not in 1949, not early in 1950 but on 16th November, 1950, in this House: The purpose of my argument is to try to show that, until we can calculate the effect of a rise in prices of raw materials, we should be slow to rush into very much relaxation of dollar purchases."— [OFFICIAL REPORT, 16th November, 1950; Vol. 480, c. 1925.] That was, in fact, a perfectly honest statement that he was making at that time— that we ought to be very careful about spending any more dollars. It really will not do for right hon. and hon. Members opposite to start accusing us of doing in effect what their own deputy Deputy-Leader was recommending to us.

This situation which grew up after Korea was, of course, bound to give rise to a good deal of concern in many parts of the world, and in the autumn of 1950 the O.E.E.C.— the 17 nations of Europe which it comprises— had more than one meeting on this, and great anxiety was there expressed because their economies were being affected just as much as ours and just as much as that of the United States. This was followed by the Prime Minister's visit to President Truman, and it was as a direct result of that visit—I do not believe it would have happened otherwise— that the International Materials Conference was set up.

All this background has created a situation in which materials, both as regards supplies and prices, have become a far more burning and urgent problem to the British economy. That being so, I may say we had begun to consider, well before the Budget period, the question of organisation here at home and we had done so for two reasons. In the first place, as my right hon. Friend pointed out in his speech, it was becoming increasingly clear that if Great Britain was to pull her weight effectively at the International Materials Conference in Washington and in the various commodity committees there, if she was to be able to press her own point of view and play her full part there with the Commonwealth countries, it was important that those who represented her on the various committees, who were necessarily Government officials assisted occasionally, whenever necessary, by industrial advisers, should be responsible to one Minister here; and that was one of the main reasons for making the change. It was essential that we should have a co-ordinated— and I grant the word here, at this stage policy in Washington, that we should be able to look at the problem as a whole and ensure that responsibility was pinned down on one Minister in that respect.

Secondly, it was undoubtedly the fact that, as a result of the re-armament programme, the Ministry of Supply, which is already a very large Ministry— [HON. MEMBERS: "Hear, hear."]— responsible for the whole of the engineering industry —and it is no good hon. Members opposite arguing that it is too large and at the same time complaining when we take duties away from it. The Ministry of Supply, which is already large, with a very heavy responsibility, had imposed upon it, with the general assent of the House, the important duty of carrying out by far the greater part of the re-armament programme.

In those circumstances one has to take a sensible view about just how large a Department should be, and it became very desirable that we should relieve the Ministry of some of its burdens. Thus, the two things worked together. It would have been possible to have taken all the raw materials problems and handed them over to the Board of Trade and to have made the President of the Board of Trade responsible for all raw materials, but I think the House and my right hon. Friend the Member for Huyton will not disagree with me when I say that that would have made the Board of Trade a wholly disproportionately large Department. Again, it is already a fairly large Department, and that would not have been a satisfactory solution.

Those were the reasons, therefore— the need to make a single person responsible for handling policy in Washington; the need to ensure that those who represented us at Washington would be responsible to one Minister; and the need to get the concentrated attention of senior officials and of all officials on this vitally important problem. It was all those needs which led us to the conclusion that there must be a new Minister concerned with this task, and solely concerned with this task.

I turn to the next question— was it really necessary to set up a Ministry of Materials? Would it not have been possible, as the Opposition claim, to have appointed a co-ordinating Minister? Let us consider for a moment what is involved in the appointment of a coordinating Minister. As I said earlier, it means, of course, that he has no power, not even direct access to the officials of the other Ministries who are actually doing the job, who are carrying out the necessary decisions to obtain raw materials. It means simply that he is in charge of the Ministers concerned but cut off completely from the executive action.

I would say myself that there is a case for co-ordination in that sense when a problem arises of settling arguments, differences of opinion, disputes, demarcation problems, dangers of over-lapping or anything of that sort. There is then a strong case for a co-ordinating Minister. He does not then have to deal with the people concerned with executive action. The problems come up to him and he acts in a semi-judicial capacity in settling those problems.

But can we really suppose that if my right hon. Friend had been simply a coordinating Minister we should have got an effectively directed policy in Washington— with the officials being not responsible to him, of course, but responsible to the other Ministers concerned? Can we really suppose that this division of responsibility would have made for a more efficient administration? Can we really imagine, supposing that my right hon. Friend had come to the conclusion that he ought to make some urgent purchases, that it would have been easier for him if he had had to work through other Ministers— first calling a Ministerial conference? Does that sound like a swift and efficient way?

I can imagine nothing more confusing and nothing more weakening in trying to get effective action. I must tell the House frankly that if I had been asked by my right hon. Friend, he having been offered the job on those terms, whether he should accept it, I should have told him that I should have refused it on those terms. If one is to be responsible for procuring raw materials, then one must have officers under one who are going to do the job, and they must be responsible to one. There is really not the slightest doubt about that.

I have no doubt whatever that if the right hon. Member for Aldershot, whose illness we all regret, had been here, he would have confirmed that he would not have been Minister of Production, responsible for machine tools, without having the Machine Tool Control directly under the Ministry of Production. Of course he would not; and that is, of course, an exactly parallel case. Moreover, I do not think that even the right hon. Gentleman the Member for Woodford (Mr. Churchill) would really suppose that the appointment of the late Lord Caldecote as Minister for the Co-ordination of Defence, as I think he was called, appointed in 1938 or 1939 and continuing for a year after the war began, was a really conspicuously encouraging example of a co-ordinating Minister.

At this point let me say a few words about the question of allocations, on which, I think there is still some confusion. The right hon. Member for Bromley, of course, knows the history of this. He was Parliamentary Secretary to the Ministry of Supply, and he recalls the war period and the Materials Allocations Committee, which was set up in 1939. It is a Committee of officials with a Ministerial chairman— with a junior Minister, though not always a junior Minister, as chairman. I think I am right in saying that Colonel Llewellin, now Lord Llewellin, was the first Chairman, and I think that the late Lord Portal was the second Chairman; and there have been other Chairmen. I was Chairman myself for a time when I was Parliamentary Secretary to the Ministry of Fuel and Power.

It is, of course, a body concerned with a very specialised job— allocating the supply of scarce materials between the different Departments. Sometimes, of course, it also embraces the allocation of those materials between different uses; but that is just a question of doing a little more work than that of simply dividing materials between Departments. This is quite a separate affair from the job of procurement, and, indeed, during the war, when responsibility for procuring rested with the raw materials department of the Ministry of Supply, the right hon. Gentleman will recall, he was never Chairman of the Raw Materials Committee, not because of any personal defect—

Mr. H. Macmillan

Lord Llewellin was.

Mr. Gaitskell

The point is that he was never at once Minister and Chairman of the Raw Materials Committee.

Mr. Macmillan

He was.

Mr. Gaitskell


Mr. Macmillan

Will the right hon. Gentleman allow me? This is a matter of history. Colonel Llewellin— Lord Llewellin now— held the position as Parliamentary Secretary to the Ministry of Supply. He did the work so well that when he went to the Ministry of Aircraft Production, by general agreement, he continued to do it. At a later date Lord Portal took over the work as Parliamentary Secretary to the Ministry of Supply.

Mr. Gaitskell

I thought he was Minister of Works?

Mr. Macmillan


Mr. Gaitskell

At any rate, there is certainly not necessarily a tie-up between a procurement Department and the chairmanship of this Allocations Committee, and, as a matter of fact, I think myself that what is far more important— and here, I believe, the right hon. Gentleman made the same point— is probably the personality of the Chairman, and not his particular Departmental position. That is the important thing.

I would add just this. What he has to know in acting as chairman of that committee, what he has to be in very close touch with, is the Government's general economic policy, and I therefore suggest that, since the Treasury happens at the moment to have the task of economic co-ordination in the general sense— as the right hon. Gentleman says, since 1947— it is particularly appropriate that my hon. Friend the Economic Secretary—who I think the House will agree has got precisely the qualities which make for a good Chairman of this Committee— should be Chairman in the present circumstances.

This is not a matter of any great importance; but it is, however, essential to distinguish between the two functions. My right hon. Friend's job is to get the materials, the procurement. The job of allocating them between different users is a judicial one of a rather different character. Perhaps I should add, in case hon. Members are confused, that my hon. Friend's task of deciding the allocations between Departments is again distinct from the job of distributing or granting the licences to the various firms. That is done, in practically every case, by the sponsoring Departments for the various firms concerned.

All that will continue as it is; there is no change there: there is no change in the allocation arrangements. The only difference is that my right hon. Friend the Lord Privy Seal takes over the responsibility for procurement, and in that capacity, through his officials, plays a part in advising the Chairman of the Materials Committee. The plain fact, therefore, is that the case for a Ministry as compared with a Minister, a coordinating Minister, is really an overwhelmingly strong one. If we want to put somebody in charge of the job we must give him the tools to do the job, because without them he will not be able to do it.

I may say that I have just been informed— and here I must correct the right hon. Gentleman— that Lord Portal became Chairman of the Materials Committee when he was appointed Minister of Works; that is to say, after he ceased to be Parliamentary Secretary to the Ministry of Supply.

Mr. Macmillan

indicated dissent.

Mr. Gaitskell

I do not think my advisers would have made a mistake about that.

The third question was whether the division of functions and responsibilities between my right hon. Friend, the Ministry of Supply and the Board of Trade was the correct one. I should just like to say a few things about that. First of all, the plan in this Bill is, of course, a flexible one, and we can very easily change the dividing line if from experience we find that is necessary. Secondly, I suggest that the division that we have made has been purely practical in character, and there has been no special dogma or doctrine or theory about it. We have simply left the Board of Trade or the Ministry of Supply materials where there would be no particular advantage in moving them to my right hon. Friend. Here again, during the war not all the materials were with the Ministry of Supply. Some were with the Ministry of Aircraft Production, and I fancy a few were even with the Board of Trade at that stage as well.

Most of the commodities we have been concerned with this afternoon, do not, I think, cause any difficulty. Indeed, nobody has really disputed the desirability of the Timber Control, of rubber and of paper going over to my right hon. Friend. So far as textiles are concerned, he is responsible simply for procurement; everything else remains with the Board of Trade. As for the chemical industry, on which there were a number of speeches, all I can say is that the arrangements there met with the satisfaction of the trade association, which was consulted on what was proposed.

I should say a few words, if I may, on the steel arrangements, because a number of hon. Members have referred to that matter. The arrangements are set out in the White Paper. The reason why, first of all, the steel industry as a whole is not moved to my right hon. Friend is, as he said, for the simple reason that he has certainly quite enough on his plate already, and that, in view of its intimate relationship with the engineering industry, it is far more appropriate to leave it with the Ministry of Supply.

But here there do arise certain problems. The raw materials, the iron ore, scrap and manganese are, in fact, bought centrally by the industry—by the Federation, as a matter of fact—and it would obviously be silly to take those out. They are left with it. So far as molybdenum, tungsten and vanadium are concerned, all that my right hon. Friend is responsible for is the import of ores or concentrates. The metal, when the ores have been smelted here, is still in the hands of the Minister of Supply. There is no question of carving up the steel industry. All that happens is that we have given to my right hon. Friend this responsibility because in fact these essential raw materials are among those which are being discussed in Washington; they are in short supply, and it is extremely important that he should be responsible for them, as he is for the other major materials, in Washington.

I do not say, however, that we can make a change of this kind to the satisfaction of everybody, nor would I say there are not some disadvantages. That is perfectly true. It is obviously a little inconvenient for the woollen or cotton industry not to be able to deal solely with the Board of Trade. I agree with that; but we have to balance these things against the over-riding importance of securing these raw materials and of establishing an international system of distribution and, if possible, a system by which prices will be held down.

Mr. Odey

Will the right hon. Gentleman explain why it is proposed to transfer leather and hides and skins from the control of the Board of Trade to this new Ministry, having regard to the close relationship between leather and boots and shoes?

Mr. Gaitskell

Because, of course, the hides and skins are imported and are among those materials which are very scarce and upon which the price has gone up very considerably and which we therefore consider should go to my right hon. Friend.

Mr. Odey

Will the right hon. Gentleman bear in mind that in this instance there is no shortage?

Mr. Gaitskell

I recognise that we could go on arguing about this. It is not easy to draw these lines. What we have tried to do in every case is, except where with the general consent of the industry it has been desirable to move a little further into the manufacturing stage—

Mr. Odey

In this instance there was no consultation with the industry.

Mr. Gaitskell

— to limit my right hon. Friend's responsibility to the procurement of raw materials only, but there is always an argument to be stated as to exactly where one draws a line. I would not deny that for a moment.

I do again remind the House that I think that if we take into account the fact that the officials are being transferred— and I think that it was the hon. Member for Woking (Mr. Watkinson) who asked for an assurance on this point— there is really a great deal of exaggeration about the alleged dislocation and serious consequences to industry. There may be a certain amount of rough edges and friction to start with, but I do not believe this will last for long.

The outlook, so far as raw materials are concerned, is, I think, rather better today than it was a few weeks ago. But it is certainly still extremely serious. The problem remains, so far as the physical side is concerned, of the greatest urgency and importance to British industry. If we cannot get these raw materials, we cannot hope to get our economy on such a level of output that it will give us the output for exports, for the defence programme and for the maintenance of reasonable civilian standards at home.

At the same time, so far as prices go, we must again emphasise the vital importance to our economy of getting some stability in this matter. There have been as my right hon. Friend said, some encouraging signs here, too. It is interest

ing that in the United States Dow-Jones commodity index there has been a fall of nearly 10 per cent. in the general index. There has, of course, been a much sharper fall in wool, rubber and tin.

We do not, of course, want to run into a slump, and we do not want to get back to the frequently far too low levels of raw material prices that we had before the war, which would have very serious consequences in the Colonies and in other parts of the world: but we do want to introduce a reasonable stability and to take hold of this most dangerous influence upon our economy at the source, with the help of our American friends, and I am quite sure that this Bill, which enables us to set up a much more satisfactory machine at this end, will make a vital contribution to acquiring these raw materials and to price stabilisation generally.

I commend the Bill to the House, and I wish my right hon. Friend all possible success in his new enterprise.

Question put, "That the Bill be now read a Second time."

The House divided: Ayes, 296 Noes, 277.

Division No. 152.} AYES 110.17 p.m
Acland, Sir Richard Castle, Mrs. B. A. Edwards, Rt. Hon. Ness (Caerphilly)
Adams, Richard Champion, A. J. Edwards, W. J. (Stepney)
Albu, A. H. Chetwynd, G. R Evans, Abert (Islington, S.W.)
Allen, Arthur (Bosworth) Clunie, J. Evans, Edward (Lowestoft)
Anderson, Alexander (Motherwell) Cocks, F. S. Evans, Stanley (Wednesbury)
Anderson, Frank (Whitehaven) Coldrick, W. Ewarl, R.
Attlee, Rt. Hon. C. R. Collick, P. Fernyhough, E.
Awbery, S. S. Collindridge, F Field, Capt. W. J
Ayles, W. H. Cook, T. F. Finch, H. J.
Bacon, Miss Alice Cooper, Geoffrey (Middlesbrough, W.) Fletcher, Eric (Islington, E)
Baird, J. Cooper, John (Deptford) Follick, M.
Balfour, A. Corbet, Mrs. Freda (Peckham) Foot, M. M.
Barnes, Rt. Hon. A. J Cove, W. G. Fraser, Thomas (Hamilton)
Bartley, P. Crawley, A. Freeman, John (Watford)
Benn, Wedgwood Crosland, C. A R Freeman, Peter (Newport)]
Benson, G. Crossman, R. H. S Gaitskell, fit. Hon. H. T. N
Beswick, F. Cullen, Mrs. A Ganley, Mrs. C. S.
Bevan, Rt. Han. A. (Ebbw Vale) Daines, P. Gibson, C. W.
Bing, G. H. C. Dalton, Rt. Hon. H. Gilzean, A.
Blenkinsop, A. Darling, George (Hillsborough) Glanville, James (Consett)
Blylon, W. R. Davies, A. Edward (stoke, N) Gooch, E. G.
Boardman, H. Davies Harold (Leek) Gordon-Walker, Rt. Hon. P. C
Booth, A. Davies, Ernest (Enfield, E.) Greenwood, Anthony (Rossendale)
Bottomley, A. G. Davies, Harold (Leek) Greenwood, Rt. Hon. Arthur (Wakefield)
Bowden, H. W. Davies, Stephen (Merthyr) Grenfell, Rt. Hon. D. R.
Bowles, F. G. (Nuneaton) de Freitas, Geoffrey Grey, C. F.
Braddock, Mrs. Elizabeth Deer, G. Griffiths, David (Rother Valley)
Brook, Dryden (Halifax) Delargy, H. J Griffiths, W. (Manchester Exchange)
Brooks, T. J. (Normanton) Diamond, J. Grimond, J.
Broughton, Or. A. D. D. Dodds, N. N. Gunter, R. J.
Brown, Rt. Hon. George (Belper) Donnelly, D. Haire, John E. (Wycombe)
Brown, Thomas (Ince) Driberg, T. E. N. Hale, Joseph (Rochdale)
Burke, W. A. Dugdale, Rt. Hon. John (W. Bromwich) Hale, Leslie (Oldham, W.)
Burton, Miss E. Dye, S. Hall, Rt. Hon. Glenvil (Colne Valley)
Butler, Herbert (Hackney, S.) Ede, Rt. Hon. J. C. Hall, John (Gateshead, W.)
Callaghan, L. J. Edelman, M. Hamilton, W. W
Carmichael, J. Edwards, John (Brighouse) Hannan. W
Hardman, D. R Mann, Mrs. Jean Snow, J. W
Hardy, E. A. Manuel, A. C. Sorensen, R. W.
Hargreaves, A Marquand, Rt. Hon. H. A Soskice, Rt. Hon. Sir Frank
Hastings, S Mathers, Rt. Hon. G Sparks, J. A
Hayman, F. H. Mayhew, C. P Steele, T.
Henderson, Rt. Hon. A. (Rowley Regis) Mellish, R. J Stewart, Michael (Fulham, E.)
Hewitson, Capt. M Messer, F. Stokes, Rt. Hon. R. R.
Hobson, C. R. Middleton, Mrs. L Strachey, Rt. Hon. J.
Holman, P. Mikardo, lan. Strauss, Rt. Hon. George (Vauxhall)
Holmes, Horace (Hemsworth) Mitchison, G. R Stross, Dr. Banett
Houghton, D. Moeran, E. W. Summerskill, Rt. Hon. Edith
Hoy, J. Monslow, W. Sylvester, G. O.
Hubbard, T. Moody, A. S. Taylor, Bernard (Mansfield)
Hudson, James (Ealing, N.) Morgan, Dr. H. B. Taylor, Robert (Morpeth)
Hughes, Emrys (S. Ayrshire) Morley, R. Thomas, David (Aberdare)
Hughes, Hector (Aberdeen, N.) Morris, Percy (Swansea, W) Thomas, George (Cardiff)
Hughes, Moelwyn (Islington, N.) Mort, D. L. Thomas, lorwerth (Rhondda, W.)
Hynd, H. (Accrington) Moyle, A. Thomas, lvor Owen (Wrekin)
Hynd, J. B. (Attercliffe) Mulley, F. W. Thorneycroft, Harry (Clayton)
lrvine, A. J. (Edge Hill) Murray, J. D. Thurtle, Ernest
lrving, W. J. (Wood Green) Nally, W. Timmons, J.
lsaacs, Rt. Hon. G. A. Neal, Harold (Bolsover) Tomney, F.
Janner, B. Noel-Baker, Rt. Hon. P. J. Turner-Samuels, M.
Jay, D. P. T. Oldfield, W. H. Ungoed-Thomas, Sir Lynn
Jeger, George (Goole) Oliver, G. H. Usborne, H.
Jeger, Or. Santo (St. Panoras, S.) Orbach, M. Vernon, W. F
Jenkins, R. H. Padley, W. E. Viant, S. P.
Johnson, James (Rugby) Paget, R. T. Wallace, H.W.
Johnston, Douglas (Paisley) Paling, Rt. Hon. W. (Deame Valley) Watkins, T.E
Jones, David (Hartlepool) Paling, Will T. (Dewsbury) Webb, Rt, Hon M.(Bradford,C.)
Jones, Frederick Elwyn (West Ham, S.) Pannell, T. C. Weitzman, D.
Jones, Jack (Rotherham) Pargrter, G. A. Wells, Percy(Faversham)
Jones, William Elwyn (Conway) Parker, J. Wells, William (Walsall)
Keenan, W. Paton, J. West, D. G.
Kenyon, C. Pearson, A. Wheatley, Rt. Hn John (Edmb'gh, E)
Key, Rt. Hon. C. W. Peart, T. F. White, Mrs. Eirene (E. Flint)
King, Dr. H. M. Porter, G. White, Henry (Derbyshire, N.E.)
Kinghorn, Sqn. Ur. E Price, Joseph T. (Westhoughton) Whiteley, Rt. Hon. W.
Kinley, J. Price, Philips (Gloucestershire, W.) Wigg, G.
Kirkwood, fit. Hon. D Proctor, W. T. Wilcock, Group Capt. C. A. B
Lang, Gordon Pryde, D. J. Wilkes, L.
Lee, Miss Jennie (Cannock) Pursey, Cmdr. H Wilkins, W A.
Lever, Leslie (Ardwick) Rankin, J. Wiley, Frederick (Sunderland)
Lewis, Arthur (West Ham, N.) Rees, Mrs. D. Willey, Octavius (Cleveland)
Lewis, John (Bolton, W.) Reeves, J. Williams, David (Neath)
Lindgren, G. S. Reid, Thomas (Swindon) Williams, 'Rev. Llywelyn (Abertillery)
Lipton, Lt.-Col. M Reid, William (Camlachie) Williams, Ronald (Wigan)
Logan, D. G. Rhodes, H. Williams, Rt. Hon. Thomas (Don V'lly)
Longden, Fred (Small Heath) Richards, R. Williams, W. T. (Hammersmith, S.)
McAllister, G. Roberts, Rt. Hon. A. Wilson, Rt. Hon. Harold (Huyton)
MacColl, J. E. Roberts, Goronwy (Caernarvonshire) Winterbottom, lan (Nottingham, C.)
Macdonald, A. J. F. (Roxburgh) Robertson, J. J. (Berwick) Winterbottom, Richard (Brightside)
McGhee, H. G. Rogers, George (Kensington, N.) Wise, F. J.
McGovern. J. Ross, William Woodburn, Rt. Hon. A
Mclnnes, J. Royle, C. Woods, Rev G. S
Mack, J. D. Shackleton, E. A. A. Wyatt, W. L.
McKay, John (Wallsend) Shinwell, Rt. Hon. E. Yates, V. F.
Mackay, R. W. G. (Reading, N.) Shurmer, P. L. E. Younger, Rt. Hon K
McLeavy, F. Silverman, Julius (Erdington)
MacMillan, Malcolm (Western lsles) Silverman, Sydney (Nelson)
MacPherson, Malcolm (Stirling) Simmons, C. J. TELLERS FOR THE AYES:
Mainwaring, W. H. Slater, J. Mr. Popplewell and
Mallalieu, E. L. (Brigg) Smith, Ellis (Stoke, S.) Mr. Kenneth Robinson.
Mallalieu, J. P. W. (Huddersfield E.) Smith, Norman (Nottingham, S.)
Aitken, W. T. B rsh, Nigel Butler, Rt. Hn. R. A. (Saffron Walden)
Alport, C. J. M. Bishop, F. P. Carr, Robert (Mitcham)
Amery, Julian (Preston, N.) Black, C. W. Carson, Hon. E.
Amory, Heathcoat (Tiverton) Boles, Lt.-Col. D. C. (Wells) Channon, H.
Arbuthnot, John Bossom, A. C. Churchill, Rt. Hon. W. S.
Ashton, H. (Chelmsford) Boyd-Carpenter, J. A Clarke, Col. Ralph (East Grinstead)
Assheton, Rt. Hon. R. (Blackburn, W.) Boyle, Sir Edward Clarke, Brig. Terence (Portsmouth, W.)
Astor, Hon. M. L. Bracken, Rt. Hon. B. Clyde, J. L.
Baker, P. A. D. Braine, B. R. Cooper, Son. Ldr. Albert (llford, S.)
Baldock, Lt.-Cmdr. J. M Braithwaite, Sir Albert (Harrow, W) Cooper-Key, E. M.
Baldwin, A. E. Braithwaite, Lt.-Cdr. G. (Bristol, N.W.) Corbett, Lt.-Col. Uvedale (Ludlow)
Banks, Col. C. Bromley-Davenport, Lt.-Col. W. Craddook, Beresford (Spelthorne)
Baxter, A. B. Brooke, Henry (Hampstead) Cranborne, Viscount
Beamish, Maj. Tufton Browne, Jack (Govan) Crockshank, Capt. Rt, Hon. H. F O
Bell, R M. Buchan-Hepbum, P. G. T. Crosthwaite-Eyre, Col O. E
Bennett, Sir Peter (Edgbaston) Bullock, Capt. M. Crouch, R. F.
Bennett, Dr. Reginald (Gosport) Bullus, Wing Commander E E Crowder, Capt. John (Finchley)
Bennett, William (Woodside) Burden, F. A. Crowder, Petre (Ruistip—Northwood)
Bevins, J. R. (Liverpool, Toxteth) Butcher, H. W Cundiff, F W
Duthbert, W N. Kaberry, D. Rayner, Brig. R
Darling, Sir William (Edinburgh. S) Kerr, H. W. (Cambridge) Redmayne, M.
Davidson, Viscountess Kingsmill, Lt.-Col. W. H Remnant, Hon. P
Davies, Nigel (Epping) Lambert, Hon. G. Ronton, D. L. M.
de Chair, Somerset Lancaster, Col. C. G Roberts, Maj. Peter (Heeley)
De la Bére, R. Langford-Holt, J. Robertson, Sir David (Caithness)
Deedes, W. F. Law, Rt. Hon. R. K. Robinson, Roland (Blackpool, S.)
Digby, S. Wingfield Leather, E. H. C. Robson-Brown, W.
Dodds-Parker, A. D. Legge-Bourke, Maj. E. A. H. Rodgers, John (Sevenoaks)
Dormer, P. W. Lennox-Goyd, A. T. Roper, Sir Harold
Douglas-Hamilton, Lord Malcolm Lindsay, Martin Russell, R. S.
Drayson, G. B. Linstead, H. N Ryder, Capt. R. E. D.
Dugdate, Maj. Sir Thomas (Richmond) Llewellyn, D. Salter, Rt. Hon. Sir Arthur
Dancan, Capt. J. A. L Lloyd, Rt. Hn. G. (King's Norton) Sandys, Rt. Hon. D.
Dunglass, Lord Lloyd, Maj. Guy (Renfrew, E.) Savory, Prof. D. L.
Duthie, W. S. Lloyd, Selwyn (Wirral) Scott, Donald
Eccles, D. M. Lockwood, Lt.-Col. J. C. Shepherd, William
Elliot, Rt. Hon W E. Longden, Gilbert (Herts, S.W.) Smiles, Lt.-Col. Sir Walter
Errol, F. J. Low, A. R. W. Smithers, Peter (Winchester)
Fisher, Nigel Lucas, Sir Jocelyn (Portsmouth, S.) Smyth, Brig. J. G. (Norwood)
Fletcher, Walter (Bury) Lucas, P. B. (Brentford) Snadden, W. McN.
Fort, R. Lucas-Tooth, Sir Hugh Soames Capt. C
Foster, John McAdden, S. J. Spearman, A. C, M.
Fraser, Hon. Hugh (Stone) McCorquodale, Rt. Hon. M. S. Spence, H. R. (Aberdeenshire, W.)
Fraser, Sir l. (Moreoambe & Lonsdale) Macdonakt, Sir Peter (l. of Wight) Spens, Sir Patrick (Kensington, S.)
Fyfe, Rt. Hon. Sir David Maxwell Mackeson, Brig. H. R. Stanley, Capt. Hon. Richard (N. Fylde)
Gage, C. H. McKibbin, A. Stevens, G. P.
Galbraith, Cmdr. T. D. (Pollok) McKie, J. H. (Galloway) Steward, W. A. (Woolwich, W.)
Galbraith, T. G. D. (Hillhead) Maclay, Hon. John Stewart, Henderson (Fife, E.)
Gammans, L. D. Maclean, Fitzroy Stoddart-Scott, Col. M.
Garner-.Evans, E. H. (Denbigh) MacLeod, lain (Enfield, W.) Storey, S.
Gates, Maj. E. E. MacLeod, John (Ross and Cromarty) Strauss, Henry (Norwich, S.)
Gomme-Dunean, Col. A. Macmillan, Rt. Hon. Harold (Bromley) Stuart, Rt. Hon. James (Moray)
Gridley, Sir Arnold Maitland, Cmdr. J. W. Studholme, H. G
Grimston, Hon. John (St. Albans) Manningham-Buller, R. E Summers, G. S.
Grimston, Robert (Westburv) Marlowe, A. A. H Sutcliffe, H.
Hare, Hon. J. H. (Woodbridge) Marples, A. E. Taylor, William (Bradford, N.)
Harris, Frederic (Croydon, N.) Marshall, Douglas (Bodmin) Teeling, W.
Harris, Reader (Heston) Marshall, Sidney (Sutton) Teevan, T. L.
Harvey, Air Codre. A. V. (Macclesfield) Maude, Angus (Ealing, S) Thomas, J. P. L. (Hereford)
Harvey, lan (Harrow, E.) Maude, John (Exeter) Thompson, Kenneth Pugh (Walton)
Harvie-Watt, Sir George Maudling, R. Thompson, Lt.-Cmdr. R. (Croydon, W.)
Hay, John Medlicott, Brig, F. Thorneycroft, Peter (Monmouth)
Head, Brig. A. H. Mellor, Sir John Thoronton-Kemsley, Col. C. N.
Head lam, Lt.-Col. Rt. Hn. Sir Cuthbert Molson, A. H. E. Thorp, Brig. R. A. F.
Heald, Lionel Monokton, Sir Walter Tilney, John
Henderson, John (Catheart) Moore, Lt.-Col. Sir Thomas Touche, G. C.
Hicks-Beach, Maj. W. W Morris, Hopkin (Carmarthen) Turner, H. F. L.
Higgs, J. M. C. Morrison, John (Salisbury) Turton, R. H.
Hill, Dr. Charles (Luton) Morrison, Rt. Hon. W S (Cirencester) Tweedsmuir, Lady
Hill, Mrs. E. (Wythenshawa) Moll-Radelyfle, C. E Vane, W.M.F.
Hirst, Geoffrey Nicholls, Harmar Vaughan-Morgan, J. K.
Hollis, M. G. Nicholson, G. Vesper, D. F.
Holmes, Sir Stanley (Harwich) Nugent. G. R H. Wakefield, Edward (Derbyshire, W)
Hope, Lord John Nutting, Anthony Wakefield, Sir Wavell (Marylebone)
Hopkinson Hendry Oakshott, H. D. Walker-Smith
Homsby-Smith, Miss P. Odey, G. W. Ward, Hon. George (Worcester)
Henryborugh, Rt. Hon. Florence, O'Neill, Rt. Hon. Sir Hugh Ward, Miss I. (Tynemouth)
Howard, Gerald (Cambridgeshire) Orrmby-Gore, Hon. W. D. Waterhouse, Capt. Rt. Hon.C
Howard, Greville (St. Ives) Orr, Capt. L. P. S. Watkinson, H.
Hudson, Sir Austin {Lewisham, N.) Orr-Ewing, Charles lan (Henden, N,) Webbe, Sir H. (London)
Hudson, Rt. Hon. Robert (Southport) Orr-Ewing, Ian L. (Weston-super-Mare) Wheatley, Maj. M. J. (Poole)
Hurbert, Wing Cmdr. N. J. Osborne, C. White, Baker (Canterbury)
Hudson, W. R. A. (Hull, N.) Peake, Rt. Hon. O. Williams, Charles (Torquay)
Hulbert, Wing Cmdr. N.J. Perkins, W. R. D. Williams, Gerald (Tonbrige)
Hurd, A. R. Peto, Brig. C. H. M. Williams, Sir Herbert (Croydon, E)
Hutchinson, Geoffrey (llford, N.) Pickthorn, K. Wills, G
Hutchison, Lt.-Com. Clark (E'b'rgh W.) Pitman, l, J. Wilson, Geoffrey (Truro)
Hyde, Lt.-Col. H. M. Powell, J. Enoch Winterton, Rt. Hon Earl
Hylton-Foster, H. B. Price, Henry (Lewisham, W) Wood, Hon R
Jeffreys, General Sir George Prior-Palmer, Brig. O York, C
Jennings, R
Jones, A. (Hall Green) Profumo,J.D. TELLERS FOR THE NOES:
Joynson-Hieks, Hon. L. W Raikes, H. V Mr. Drewe and Major Conant.
Bill accordingly read a Second time.
Committed to a Committee of the whole House. —[Mr. Pearson.]
Further Proceeding postponed, pursuant to the Order of the House this day.

Question put, and agreed to.